A Comparative Analysis of Unfair Terms in Consumer Contracts in Malaysia and Singapore

Abstract

The inclusion of welfarist ideology in the consumers’ trade derived from the ideal of paternalism is a paradigm change from the doctrine of freedom of contract. Regulatory and legislative steps must be taken to support and attract consumers to the industry. Judicial and legislative actions must be taken to correct the market flaws that create consumers’ vulnerability while trading in the global market. As one of ASEAN members’ founders, Malaysia is moving towards people-centered economic endeavours to balance both industry and consumer interests through exclusion clauses to prevent unfair practices in consumer contracts. Legal intervention is one of the ways to curbing the issues that arise from exclusion clauses. Before 2010, the non-existence of a specific regulatory framework to limit exclusion clauses usage in contracts involving consumers further increases consumers’ vulnerability. Traditional judicial approaches in the battle against coercion and unethical behaviour of traders before 2010 did not engross consumer rights and interests. This sign is, in fact, the modern age of customer contracts, the enforcement of unfair terms. This article used the content analysis technique and analysed the evolution of legislative interference and judicial approaches in interpreting exclusion clauses in contracts involving consumers in Malaysia and Singapore.