On 1 March 2022, the Ministry of Commerce issued Prakas No.0067 P.N.A.KBB.PRK on Unfair Contract Clause ("Prakas"). The Prakas will be implemented within six months after the date of its issuance.
The Prakas defines "Unfair Contract Clause" as any clause that: (i) allows business operators to gain excessive consumer benefit; and (ii) creates an extreme disadvantage to the consumer. The term "unfair" under this Prakas will be determined based on certain factors. In assessing whether a clause allows business operators to gain "excessive benefit" from the consumer, the following will be considered: (i) the circumstances of the parties or either party to the Standard Form Contract such as economic or social dominance, ignorance of either party, or similar circumstances; and (ii) the criteria imposed under sectoral regulations of the relevant ministries, institutions, or regulators.
A "Standard Form Contract" refers to a contract or material clause which is pre-formulated by a business operator for the provision of goods and/or services to the consumer, the terms of which do not allow the consumer to negotiate or revise the contract or influence the business operator in whatever form to amend the contract. The Standard Form Contracts issued by business operator must comply with the requirements set out by the Prakas.
The Prakas also stipulates that consumers have certain rights under the Standard Form Contracts including (i) the right to access necessary information relating to the goods and/or services provided by the business operator, as well as the clauses of the Standard Form Contract; (ii) the right to ask for clarification before entering into the contract; and (iii) the right to rescind or ratify any clause that is unfair and give excessive benefit to business operators.
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