In many cases we find that our clients are asked by their bankers and financial institutions or in the ordinary course of entering into an agreement to renounce the legal exceptions non numeratae pecuniae, non causa debiti, error calculi, revision of accounts and no value received, and to waive the benefit of excussion, division et divisionis and in certain cases that of de duobus vel pluribis reis debendi.
The following is a simplified explanation of the meaning and effect of the renunciation of exceptions and benefits and is provided for information purposes in order to assist our clients to understand the effect of the legal terminology:
Renunciation of benefits
A renunciation of the following benefits entitles the financial institution to recover the full debt from the person who renounced these benefits and applies in situations where there is a debtor and a surety and/or co-or joint debtors.
Beneficium ordinis seu excussionis
A waiver of this benefit by a surety entitles the financial institution to claim payment from the surety without first exhausting the legal remedies against the principal debtor.
Beneficium de duobus vel pluribus reis debendi
A waiver of this benefit by a co-debtor or surety entitles the financial institution to recover the full debt from such co-debtor’s surety, without first requiring payment from the other debtor or the principal debtor.
A waiver of this benefit by a co-surety entitles the financial institution to recover the full debt owed by the principal debtor against that surety
Renunciation of exceptions
The renunciation of a legal exception will not preclude such exception from being raised as a defence to anyone in the event that a dispute arises or legal proceedings are instituted. However, should an exception be raised as a defence by any party after waiving such exception, then the onus of proving that such exception and the relevant facts relating thereto, will lie with that party.
Exceptio non causa debiti
The purpose of renouncing exception is to place the onus of proving the absence of a cause of debt on the debtor.
Exceptio errore calculi
This is the defence that the amount claimed has been incorrectly calculated
Exceptio non numeratae pecuniae
This is the defence that moneys claimed were in fact never advanced to, or received by or on behalf of the debtor.
NOTE: All three of the above exceptions are considered to be unlawful provisions in a Credit Agreement and cannot be included in a credit agreement to which the National Credit Act applies in terms of Regulation GN 713 of 1 June 2006 at regulation 32. This concept becomes all the more complicated when one considers that not all credit agreements are regulated by the National Credit Act (for example morgage agreements where the consumer is a juristic party are excluded from the National Credit Act). Moreover these exceptions are also likely to fall foul of the Consumer Protection Bill when that becomes enacted. If you intend to use the benefits of these exceptions within your contracts we recommend that you consult us to ensure that these exceptions will not be seen as unlawful provisions which would be severed from your agreement.