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- Latest cases, legislation and regulation updates and commentaries
Nabila Kamarudin from Christopher & Lee Ong wrote an article titled "Consumer Rights against the Mighty Traders" in the 3 November 2014 issue of The Sun, a Malaysian newspaper of general circulation.
The Consumer Protection Act 1999 ("Act") provides protection to consumers against substandard goods and services, oppressive bargains and defective products. Under the Act, a consumer can claim losses which arise from defective goods, poor services and unfair terms of contract.
The article highlights important points that businesses need to be cautious of, in order not to fall foul of the law. They must observe the principles of substantive fairness, making sure that the terms of the contract are not harsh and onerous. The conditions imposed, if any, should not be difficult to comply with and should be reasonably necessary for the protection of the legitimate interests of the trader. Procedural fairness in entering into a contract is equally important. This entails the use of plain language which can be easily understood by the consumer. The terms of the contract must also be clearly and accurately explained to the consumer, taking into account the latter’s age, educational or linguistic disability and ignorance of business affairs of the consumer.
The Act has provided the consumers the avenue to assert their rights to quality goods and services against unscrupulous traders. As Malaysians become more sophisticated consumers, businesses must start reviewing their practices and contracts to ensure that they do not run counter to the provisions of the Act.
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John Rolan from Christopher & Lee Ong wrote an article titled "Directors' Liability and the Extent of the Protection Granted by Section 354 of the Companies Act 1965", in the 2 September 2014 issue of The Sun, a Malaysian newspaper of general circulation.
An honest and reasonable director can still be negligent, in default or in breach of a trust or duty affixed to him and there is little a director can do to circumvent the accountability attached to him. Needless to say, a director who is found to be negligent, in default or in breach of his fiduciary duty faces penalties prescribed by law.
The article discusses the extent of the protection granted by section 354 of the Companies Act 1965. Section 354 gives the court the powers to relieve a director from the consequences of his negligence, default and breach of duty or trust. In order to avail of this relief, three conditions must be satisfied: (i) the director acted honestly; (ii) he acted reasonably under the circumstances; and (iii) it is fair for the courts to excuse him, having regard to all circumstances of the case.
The writer noted that with the protection available to directors through Section 354, directors are no longer held hostage to the whims of the members of a company when the issue of liability arises. A director has an alternative recourse to the courts if the members of the company are indifferent to his genuine reasons for committing the breach. Bear in mind, however, that it is ultimately dependent on the sound discretion of the courts on whether it is fair to grant the relief prayed for. It is this “judicial discretion” that limits the extent of the protection to cases where it is just to do so.
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