An acknowledgment of debt is executed by the debtor in favour of the creditor wherein he confirms the existence of a debt of a stated amount. It is therefore a formal recognition of a debt by the debtor. It matters not that the document is not titled or worded ‘acknowledgment of debt’, if the effect of the contents is to acknowledge the existence of a debt then it is an acknowledgment of debt.
Having an acknowledgement of debt executed by the debtor has a number of advantages. First, an acknowledgement of debt has the effect of interrupting the running of prescription. Second, it is competent to sue a debtor on his admission of liability as set out in an acknowledgement of debt without founding the action on the original transaction giving rise to that acknowledgement (see Barend Van Wyk v Tarcon (Pvt) Ltd SC49/14). Third, once the authenticity of the acknowledgement of debt is proved, the onus of proving that the acknowledgement of debt was signed through duress or some other similar defence rests on the party making the allegation. Fourth, an acknowledgement of debt is a liquid document. A liquid document is one which demonstrates by its terms, an unconditional acknowledgment of indebtedness in a fixed or ascertainable amount due to the Plaintiff. Another example is a dishonoured cheque. A holder of a liquid document can expeditiously obtain judgment without necessarily going through a trial which in most cases may be time consuming. To this end he can utilise the summary judgment procedure or the provisional sentence summons.
It is necessary that an acknowledgement of debt be drafted with clarity and precision so that it indeed becomes a liquid document and will not be easily challenged in court. It is also important to put clauses in which the debtor renounces the legal exceptions non numeratae pecuniae and non causa debiti as this has the effect of shifting the onus to the debtor. There is therefore no doubt that a creditor would need a legal practitioner to draft such an important document.
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