CAC Sabah / FT Labuan

Did you see the news about how Malaysian banks can’t rely on an “exclusion clause” to escape liability?

What this refers to is a standard line in their contracts that removes or limits their responsibility if they mess up. And therefore they cannot be sued for negligence or breach of contract.

The Federal Court ruled yesterday that CIMB was not allowed to use this clause all the time. Service providers like banks often have a “standard contract” that we customers have to accept the way it’s prepared. This was unfair and unjust according to the Federal Court, as there is “unequal bargaining”.

Contracts are usually negotiated between parties before signing, as a part of fair bargaining. Obviously, a person who can command a “take it or leave it” contract has A LOT of control over the engagement. Things will be a lot fairer now that banks will not have an automatic bulletproof argument in legal disputes.

What you probably didn’t know is that we already have a similar law on unfair contract terms within the Consumer Protection Act 1999. This doesn’t just apply to banking, but pretty much any time there is a contract involved, like with unfair no-refund policies, and when event organisers cancel without a valid excuse.

Here are some other articles for further reading:

5 ways you can (possibly) get around a no refund policy in Malaysia
http://bit.ly/2A5seSZ

If an event gets cancelled in Malaysia, can you get a refund?
http://bit.ly/2BsYDCL

If you get injured AFTER agreeing to terms and conditions in Malaysia, can you sue?
http://bit.ly/2EtQFMQ

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