Joe borrows 10 000 from Nick. They both agree that Nick will repay the loan in five equal instalments over the following five months. At the end of the first month joe pays R2000 and refuses to pay any of the other instalments. Indicate the period of prescription in respect of this debt.
Answers
Answer:
The question is wrong.
Explanation:
The question is wrong because Joe has borrowed money, then why will Nick repay them???
Period of Prescription should be 3 years.
Explanation:
There is a slight typing mistake in the question.
In the second line,Nick should be replaced by Joe since Joe was the one who took the loan.
Now,coming back to the explanation of the answer.
Let us first understand what's the meaning of "Period of Prescription".
As per the provisions of Prescription Act 68, 1969,
Prescription is the process in which a person loses his legal rights due to failure to pay amount due to another person(Payee) .
This Act provides that "a debt are often extinguished or removed after prescription of a relevant period of time".
In the following case,the prescription period should be 3 years as there was no written contract between Joe and Nick for the payment of the debt,they had agreed on their statements only orally.
Therefore,as per the provisions of this Act,the Prescription period should be 3 years.
It would have been 6 years if both of them had entered into a written contract or agreement.