If interest and the rate thereof has been determined in a contract, the problem does not arise. Where the rate of interest has not been agreed, or when a debt becomes due and payable, interest runs from that date at a rate determined in accordance with section 1(2) of the Prescribed Rate of Interest Act, 1975 (Act No. 55 of 1975).
The rate of interest in terms of said Act is always 3,5% above the prescribed repurchase rate ( Repo-rate) as announced from time to time. Until recently the mora rate was promulgated from time to time. It now fluctuates with the Repo-rate. This rate is referred to as the mora-rate of interest.
A summons may include a claim for interest at the rate specified in the summons, calculated from the date of the service of the summons (if damages are claimed and a letter of demand has been sent, from such date). If the claim is based on a contract, interest may be claimed from the date the defendant was obliged to pay or from the day on which he was placed in mora.
Christo Smith Attorneys Inc.