Unfair Contract Terms and Consumer Protection: Legislative and Judicial Controls in Malaysia

Abstract

This chapter examines how Malaysian contract law deals with extremely one-sided, onerous, or otherwise unfair terms, such as exclusions or limitations of liability, penalty clauses, or restraint of trade clauses. It discusses the overt judicial control of such terms under specific legislation, sometimes targeted exclusively at standard terms or consumer contracts. It also analyses how the Malaysian courts have exercised a more indirect control by employing traditional general contract law doctrines, such as contract formation, interpretation, or the rules on procedural fairness, in order to protect parties against the imposition of unfair terms. A number of hypothetical clauses are analysed to illustrate how Malaysian courts regulate unfair contract terms in practice, standard terms, consumer contracts, exemption clause