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ARTICLE · 07 JULY 2026

Acknowledgement Of Debt - Promissory Note

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A South African court examines whether an acknowledgement of debt containing specific payment terms qualifies as a promissory note under the Bills of Exchange Act, determining the applicable prescription period for debt recovery. The case turns on statutory interpretation of negotiable instruments and the distinction between mere acknowledgements and unconditional promises to pay.

South AfricaFinance and Banking
Mtho Maphumulo
Mtho Maphumulo
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FACTUAL BACKGROUND

The plaintiff issued summons against the defendant for payment of R696,002.42, together with interest and costs. The claim was founded upon an Acknowledgement of Debt (“AOD”) concluded between the parties on 21 July 2020 at Bloemfontein.

In terms of the AOD, the defendant acknowledged being truly and lawfully indebted to the plaintiff in his personal capacity in the sum of R473,778.24. Interest was to accrue at the rate of prime plus 3% per annum, calculated from 1 June 2020 to the date of payment in full. The defendant undertook to repay the debt by way of monthly instalments of R15,000.00, payable on the 1st day of each consecutive month effective from 1 June 2020, until the outstanding debt (inclusive of accrued interest) had been discharged in full.

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