COMPARATIVE STUDY ON LAW OF UNFAIR TERMS OF CONTRACT IN MALAYSIA

 Azwina Wati Abdull Manaf¹*, Norazuan Binti Amiruddin²

¹Lecturer, Multimedia University, azwina.manaf@mmu.edu.my

²Lecturer, Multimedia University, norazuan.amiruddin@mmu.edu.my

*Corresponding Author

 

Abstract

Unfair contract terms can easily be discovered in invoices, receipts, as well as other consumer contracts and sale documents. These terms, also known as “weapons of consumer oppression”, are often applied oppressively against consumers by limiting, denying and restricting their rights as a consumer all together. In the case of a contract between a seller and a buyer, the buyer pays for certain goods or services, and accordingly, the seller should ensure that it is up to par with the money given for it. Unfortunately, businesses have sought to discard this burden by inserting exclusion clauses in consumer contracts with the intention of forcefully obtaining consent from consumers in order to disclaim them. The objective of this article is to give awareness to consumers that they have no choice but to be left without a remedy as the exclusion of liability are adopted by almost all businesses. The current contract law is insufficient to protect consumers whose rights are infringed by the use of unfair contract terms by sellers, thus the National Advisory Council for Consumer Protection has suggested that the introduction of the UK’s Unfair Contract Terms Act 1977 should be carried out in Malaysia in 1993. Hence when the Consumer Protection Act came into effect in Malaysia on 15 November 1999, it was commonly expected that there would be wide-spread provisions regarding unfair contract terms. However, the act has not successfully tackled the issue of unfair contract terms in consumer contracts, as there are no provisions in the 1999 Act which mentions unfair contract terms. It is generally remarked that although the terms against unfair contract terms contains certain defects, it is better than the Consumer Protection Act 1999 which says nothing about this. However, there is still room for improvement regarding the provisions of unfair contract terms in contracts. In this article, we will look to the consumer protection law in other countries such as the United Kingdom, Singapore and Australia, take the essence and discard the dregs in order to come out with better ideas to protect Malaysia consumers. At the end of this research, it is expected that we can find that there is still plenty of room of improvement for it. It might be better if our country could enact a specific legislation to govern the case of unfair contract terms. Not only that, the deficiencies stated above should be complemented as soon as possible. It is also suggested that we shall take those countries as a reference for us in improving our law regarding unfair contract terms to prevent the consumers being exploited by these unfair contract terms. As referring to the law in different countries, we are of the opinion that United Kingdom should be our role model in improving our law regarding unfair contract term. This is because it has a specific legislation to govern this matter and even Singapore also adopts the English law in this matter. At the same time, Malaysian court shall also learn to interpret the law broadly so it could fully come into play.

Keywords: Comparative Study; Contract Law; Law ; Unfair Term