Contemporary Common Law Developments in Contract Law: Implications for Reform in Malaysia – Mary Lim | What you think

DECEMBER 9 – There is an appointment by His Majesty the King of a person known as the Law Revision Commissioner. This appointment is made under a little-known law called the Law Revision Law of 1968 or Law 1.

The Law Revision Commissioner has the primary power and function of reviewing and reprinting all laws passed by Parliament and this includes all laws prior to Merdeka.

Revision is essentially an exercise in updating our laws and keeping in our treasury only those laws that are still in force with a language in tandem with current legislation.

One would have thought that this exercise should be done by Parliament or the legislative assemblies of the respective states since all laws are promulgated by Parliament. Under Law 1, this function of reviewing our laws is left in the hands of the Law Review Commissioner.

Here is an example of the powers of the commissioner. The Commissioner may omit from any revised law, for example:

* Any provision which has ceased to have effect;

* Any preamble or part of a preamble of a law;

* Any adoption clause;

* Any part of a law which can be more conveniently included as subsidiary law.

In this revision exercise, the commissioner can even add a long or short title or modify an existing title; provide or modify tables of contents, consolidate or divide into one or more laws; transfer any provision of one statute to another statute to which that provision more correctly belongs; modify, insert or omit punctuation marks.

There is more; a total of about 24 powers. But, there is a strict prescription to all of these powers.

The Commissioner is expressly informed that the powers conferred “should not be interpreted as implying a power to make modifications or modifications to the substance of a law”.

In 2006, I was appointed Commissioner of Law Revision or CLR as the position is more commonly known. But, I wasn’t just the CLR.

Four years earlier, the CLR had taken on an additional portfolio and had become the Law Review and Reform Commissioner. The Research Unit of the Public Prosecutor’s Office is placed under the supervision of the CLR.

Thus, the task of law reform came under the auspices of the CLR. However, until that date, Act 1 and the appointment of the CLR remain unchanged; and I understand that there is yet another research unit at AGC.

Why am I referring to the office of the CLR and the powers granted under Act 1 to the CLR as we are here this morning on the cases of the Contracts Act 1950 and more specifically, the development of contemporary customary law in Malaysia?

Perhaps its relevance will become clearer when we understand the broader intent of this round of talks.

English commercial law was first introduced into the Straits Settlements through the Civil Law Ordinance of 1878. In 1899, the Contract Act, modeled on the Indian Contract Act of 1872, was adopted. then promulgated.

It applied to the four Federated Malaysian States. This law was later extended to the non-federated Malaysian states through the Contracts Ordinance of 1950.

The contracting ordinance was then revised under the powers that I explained a moment ago. With effect from July 1, 1974, the Contracts Ordinance became the Contracts Act 1950 and constitutes Act 137 of the Malaysia series of laws.

The Indian contract law is said to be in fact “a code of English law”. Our contract law should not be viewed any differently. As a Code, one should be able to find all the answers in its pages.

Yet, as you will hear, the contracting parties have repeatedly called upon our courts to the common law for assistance, for development. For example, our provisions on coercion [section 15 of the Contracts Act] are said to be archaic, disregarding commercial realities and pressures, that economic constraint must be properly recognized.

In the recent decision of Pakistan International Airline Corporation v Times Travel (UK) Ltd [2021] UKSC 40, [2021] 3 WLR 727, the English courts have even recognized the concept of a lawful act of economic coercion.

Likewise, the concepts or at least the arguments of inequity and unequal bargaining have been left out, namely that our existing article 16 on “abuse of influence” would simply be inadequate to deal with modern quarrels in law and order. conference rooms.

So in Saas Marwi vs. Chan Hwan Hua [2001] 3 CLJ 98, the Court of Appeal suggested that “we should recognize the broader doctrine of unequal bargaining power. We can adopt the English doctrine of unconsciousness in toto ”. The Court of Appeal held that this was a choice available under section 3 of the Civil Law Act 1956. [Act 67].

What about the treatment of illegality as addressed by the Supreme Court in Patel vs. Mirza [2016] UKSC 42 – is it within the scope of article 24? What about the law of restitution, of unjust enrichment?

Does this fall under the law or have we pushed its terms beyond its limits? The recent Federal Court decision in Cubic Electronics Sdn Bhd vs. Mars Telecommunications Sdn Bhd [2019] 6 MLJ 15 has satisfactorily terminated the damages position; is it in tandem with the rest of the other common law jurisdictions.

The contracting parties have repeatedly called on our courts to use the common law for assistance, for development.  - Photo by Yusof Mat Isa
The contracting parties have repeatedly called on our courts to use the common law for assistance, for development. – Photo by Yusof Mat Isa

Another example is electronic transactions. If one looked to the requirements of the law on forming a valid and concluded agreement, and by the time one arrives at it, it is more likely than not that the many parties involved in an electronic transaction or a web contract have already clicked and sent a response via the impossible algorithms.

How many of us have really gone through and read the countless terms and conditions before clicking the “I agree” or “I agree” or even “Pay” button? The fear is that this law of the last century will not be able to resolve the disputes that arise from these e-commerce transactions.

There is certainly more.

It is clear and obvious that the law on contracts needs revision, and swiftly. And the revision of the Law on Contracts, a law that regulates and underpins many fundamental aspects of our daily lives, our businesses, our industry, our government and more; cannot be left to the court. Court observations can be challenged as obiter or worse, by carelessness. There are only limits that the courts can model on the facts in order to do justice.

The revision of our law on contractual obligations to take into account and accommodate developments in Common Law must be undertaken in a responsible manner, through agreement and discourse; extensive, in-depth and refined deliberations by appropriate experts; many of whom are already attending this webinar and those to come in the coming days.

This task fits perfectly into the additional function of the CLR, that of reform. But, as I pointed out at the beginning, this task can, with respect, go beyond the powers of the CLR; certainly not as a review exercise, but as a reform project.

In the UK, reform matters are by statute the responsibility of the Law Reform Commissioner. A sitting judge of the Court of Appeal directs this appointment. Sir Nicholas Green is assisted by an independent and permanent secretariat

In fact, just last week the Law Commission “confirmed that existing law in England and Wales is capable of adapting and applying to smart legal contracts, without the need for reform statutory law. The Law Commission notes that in some contexts a progressive development of the common law is all that is needed to facilitate the use of smart legal contracts within the existing legal framework.

We need this. We need an independent legal commission to undertake all the reforms.

Its urgent work will then be able to integrate all the studies and recommendations which, it is hoped, will result from this series for greater confidence in the evolution of our law of contractual obligations; that law and common law can really be ad ditto.

* Datuk Mary Lim Thiam Suan is a judge at the Federal Court of Malaysia and here is her remarks delivered at the Faculty of Law of the University of Malaysia on December 4th.

** This is the personal opinion of the author or post and does not necessarily represent the views of Malaysian courier.

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