LXEB 3303

COMMERCIAL TRANSACTIONS I

SEMESTER 2

SESSION 2015/2016

“Remedies under the Consumer Protection Act 1999

are not any different from the remedies under Sale of Goods Act
1967.” Discuss.

GROUP MEMBERS: SUGANYAA A/P V. RAVICHANDRAN (LEB140110)

TAN YEN THUNG (LEB140115)

TAY SUET YEE (LEB140117)

LECTURER : ENCIK AHMAD SAUFI BIN ABDUL RAHMAN

DATE : 5TH OF MAY 2016

INTRODUCTION:

The Malaysian Sale of Goods Act “SOGA” was originally enacted in 1957 and it was

the main piece of legislation serving buyers in obtaining remedy when their acquisition ‘go

wrong'. The earlier laws were largely modelled on the United Kingdom Sale of Goods Act

1893. Though, in the UK, the Sale of Goods Act 1979 has superseded the 1893 statute. The

latter Act has itself been amended on several occasions and added protection thereby given to

consumers. However, the enhanced rights conferred by the UK Sale of Goods Act 1979 and

subsequent amendments to it have not yet been included in the Malaysian Sale of Goods Act.1

The loopholes have then been covered by a more comprehensive statute called the Consumer

Protection Act 1999 (“CPA”).

The CPA, is a statute which gives a more comprehensive protection to the consumers,

who are considered to be at a disadvantage in the market place. For example, the law on product

liability was generally found in the contract laws, tort law of negligence, and “SOGA”.

However, for claims based on contractual or statutory liability, only the immediate party to the

contract can claim compensation and other affected persons such as a friend, or family member

who uses or receives the product as a gift has no right to claim. Unless privity is established,

no liability arises2. However, CPA extends its protections not just in respect of goods, but also

extended to services and products liabilities. Also, its remedies also extend to not just sellers

alone as in the SOGA, but it includes further parties such as manufacturers and even producers.

Therefore, the remedies under the CPA and SOGA are actually different. Thus, we will

now compare and contrast the respective remedies available with regards to the supply of goods

in CPA and SOGA.

1
S. Sothi Rachagan, Susheela Nair, “ Consumer Protection Law in Malaysia”, 13 Oct 2008, Law & Paneir, 27 Nov 2011,
< http://paneir.blogspot.com/2008/10/consumer-protection-law-in-malaysia.html>
2
Ibid No.1
DIFFERENCES BETWEEN IMPLIED TERMS UNDER SOGA & CPA

There are a few general differences in the terms used under SOGA & CPA, and they

are as follows:

1. “Price” under CPA is referred to as “consideration in any form”, while under

SOGA, it is called “money consideration”.

2. “Supplier” under CPA refers to a person who supplies goods to a consumer under

a contract for sale (but not applicable to private sales), whereas under SOGA,

supplier generally means “seller”.

3. The “implied terms” are also to be differentiated. Under CPA, the terms are

referred to as Implied Guarantees, whereas under SOGA, such terms are divided

into two categories, namely, a) Implied Conditions (where a breach of it will entitle

to a repudiation of the contract) and b) Implied Warranties (where a breach will

only entitle a buyer to claim damages).

Also, the implied terms under SOGA can be negative or by an express agreement

between parties as seen under Section 62. However, Section 6(1) and 71 of the

CPA on the other hand provides that implied guarantees cannot be excluded3 by the

contracting parties. So even if parties try to contract out of the CPA they will not be

excluded from their liabilities. Thus, it is clear that CPA provides a wider spectrum

of protection if compared to SOGA.

3
However, it must be noted that the contracting parties are allowed to make variation in facilitating the commercial transaction as long as
such variation does not amount to exclusion of the implied guarantees.
 The comparison of implied terms under SOGA and CPA are as follows:

No. Implied Terms/ Protections SOGA CPA

Implied Implied Implied
Conditions Warranties Guarantees/
Protections
1 Right to sell the goods Section 14(a) - Section 31(a)
2 Quiet possession to goods - Section 14(b) Section 31(c)
3 Goods free from charge or encumbrances / - Section 14(c) -
Goods free from undisclosed security - - Section 31(b)

4 Goods comply with description Section 15 - Section 34

5 Fitness of goods Section 16(1)(a) - Section 33
6 Merchantable Quality / Section 16(1)(b) - -
Acceptable Quality - - Section 32

7 Goods comply with sample Section 17 - Section 35

From here, we can see that CPA is more comprehensive as it provides more

protections for consumers against suppliers, such as the implied guarantees as to price,

repairs and spare parts that the consumers are entitled to, and a manufacturer’s express

guarantee. These implied terms are absent under the SOGA.

No. Implied Terms/ Protections SOGA CPA

1 Price - - Section 36
2 Repairs and Spare Parts - - Section 37
3 Express Guarantee by Manufacturer - - Section 38
PART 1: REMEDIES UNDER SOGA

The first difference between SOGA and CPA are the parties that are entitled to those

remedies. SOGA provides remedies for both buyer and seller whereas CPA does not provide

remedy to the sellers but only to consumers. We will first look at the remedies against the seller,

and subsequently the remedies against the buyer.

The SOGA provides a few remedies that a buyer has against the seller when there is a

breach of implied term, and they are divided into 2 categories.

A. When there is a breach of condition, a buyer has the right to treat the contract as

repudiated,

B. Whereas if it is a breach of warranty, the buyer will have the right to claim for

damages.

C. Another additional remedy would be the right to specific performance conferred

by the Specific Relief Act 1950.

A) Right to repudiate the contract

When there is a breach of condition, it is stated in Section 12 (2) of the SOGA that the

breach gives rise to a right to treat the contract as repudiated. However, because SOGA does

not provides for the manner and effects of repudiation, we will then need to rely on the Contract

Law. That is, upon That is, upon repudiation, both the seller and the buyer, are discharged from

further obligations to perform the contract. Section 76 of Contracts Act 1950 then provides

that “Party rightfully rescinding contract is entitled to compensation”. This is to say that the

injured party can claim damages he suffered for the non-fulfilment of the contract by the seller.
 Also, when the contract is repudiated, the buyer is not bound to return the rejected goods

even though he refuses to accept them, as provided under Section 43 of SOGA4. It will be

sufficient if he intimates to the seller that he refuses to accept them, or, as in Section 13(1) of

the SOGA, the buyer has the option to i) waive the condition or ii) elect to treat the breach of

condition as a breach of warranty. Thus, this will disentitle the buyer to repudiate the contract,

but to claim damages only, which will be discussed in the next remedy pertaining to the right

to claim damages.

B) Right to Claim Damages

The next remedy is the right of buyer to claim damages for the breach, but this is only

confined to a breach of warranty. As mentioned before, besides the normal breach of warranty,

the buyers can also choose to treat a breach of condition as a breach of warranty as stipulated

in Section 13 of SOGA. This is illustrated in the case of Associated Metal Smelters v Tham

Cheow Toh5. So generally, a breach of warranty will only give rise to a claim for damages, and

not a right to reject the goods or to repudiate the contract6.

The specific remedies for a breach of warranty is provided under Section 59 of SOGA.

Under Section 59(1) of SOGA, the buyer may set up against the seller the breach in:

(i) diminution or extinction of the price or

(ii) to sue the seller for damages for the breach.

4
Subject to Section 42 SOGA.
5
[1971] 1 MLJ 271
6
Section 12(3) of SOGA.
 And under Section 59(2) of SOGA provides that even though a buyer has already set

up a breach of warranty in diminution of the price, he still can claim damages for further

damage that he suffered, as in the case of Lee Heng v Melchers7.

Not only that, Section 57 of SOGA also provides an additional remedy for a buyer

where he can sue the seller for damages for non-delivery, in which the seller wrongfully

neglects, or refuses to deliver the goods to the buyer.

C) Specific Performance

This specific performance remedy available for buyer against the seller is provided

under Section 58 of SOGA. It is referred to Chapter II of the Specific Relief Act 1950, where

there is a breach of contract to deliver specific or ascertained goods, the buyer can then apply

to the court for a decree of specific performance of the contract. Consequently, the seller cannot

retain the goods on payment of damages. This is because in a normal contract of sale of goods,

there is hardly any specific performance to be executed, hence, it is only confined to the

delivery of goods.

Whereas, a seller also has certain remedies against the buyer, when the purchase price is

not paid to him. For instance, the seller has the rights to:

1) Claim for the price under Section 55 SOGA.

2) impose a lien on the goods for the price while he is in possession of them under Section
46 (1) of SOGA,
3) stop the goods in transit after he has parted with the goods in case of insolvency of the
buyer

7
[1963] MLJ 47
 4) to resell the particular goods if the price was not paid.

PART II: REMEDIES UNDER CPA

On the other hand, CPA is more comprehensive in the sense as it provides different

types of remedies for a consumer through different categories, and they are as follows:

A. Remedies against the supplier in Part VI ;

B. Remedies against the manufacturer of the goods in Part VII and ;

C. Remedies against the producer under product liability in Part X.

A) Remedies Against The Supplier

As we can see from Section 41(1) of the CPA, where the suppliers’ goods do not

comply with the implied guarantees, the consumer may exercise a few remedies. Three

remedies are available against the supplier, and they are as such:

1. supplier to remedy the failure

2. consumer can reject the goods or

3. consumer can obtain damages for loss or damage suffered.

For the above remedies, one of the issues to be determined is whether or not the failure

to comply with the implied guarantee can be remedied by the supplier. If the supplier can

remedy it, it will fall under (i), whereas if the supplier cannot remedy the failure, the consumer

has the option to go for (ii) or (iii).

Or, under Section 41(3) of the CPA, it also provides that if the supplier refuses or

neglects to remedy the failure, or failed to remedy within a reasonable time, the consumer then
may i) have the failure remedied somewhere and obtain the costs from supplier or to ii) reject

the goods in accordance with Section 45. This is not provided under SOGA.

1. Supplier to remedy failure – Repair or Replacement

A supplier may remedy the failure by virtue of section 42(1) of the CPA, which is by

(i) repairing the goods if the failure does not relate to the title, (ii) curing any defect in title

where the failure relates to title, (iii) replacing the goods of identical type or (iv) refund the

money paid if the goods can’t be repaired or replaced.

2. Consumer can reject the goods or claim damages in the reduction of value of the goods.

In normal circumstances, when it comes to repudiation of contract, both parties would

have been discharged from the obligations to perform the contract. And as mentioned, in

SOGA, under Section 43, unless otherwise agreed, a buyer is not bound to return the

rejected goods, as long as he intimates to the seller that he refuses to accept the goods.

However, as shown under Section 45 of the CPA, consumers are bound to notify the

rejection to the supplier and return the goods. Subsequently, as in Section 45(3), ownership

of the goods will then re-vest in the supplier upon the notification of the rejection.

According to Section 45(1), the consumer can reject the goods, with notifying the

supplier grounds for the rejection, and the consumer shall return the rejected goods to the

supplier by virtue of Section 45(2) unless it falls within any of the 3 exceptions which are:

(i) Due to the nature of the failure to comply with the guarantee, or, due to the size

or height or method of attachment in which the goods cannot be returned

without significant cost to the consumer, the supplier will then have to collect

the goods at its own expense;

 (ii) Due to the method of attachment, in which the removal of the goods would result

in serious damage to the property, then the supplier has to compensate such

damage; or

(iii) When goods have been returned to or retrieved by the supplier.

Also, upon rejection of goods, CPA also provides options for consumers to claim for a

refund or replacement which is not provided under SOGA. This can be seen under Section

46(1) CPA, where consumers can claim for (i) refund of the money paid or other sorts of

consideration given, or (ii) to have the rejected goods replaced with other goods of same type

and of similar value. However, the obligation of refund cannot be satisfied if the supplier

permits the consumer to acquire other goods from them by virtue of Section 46(3) CPA.

As far as CPA provides the option for consumers to reject the goods, there are

limitations to it as well, and it is subject to Section 43(1), whereby the right to reject goods

shall not apply if :

(a) the right is not exercised within a reasonable time;

(b) the goods have been disposed of by the consumer;

(c) the goods have been lost or destroyed while in the possession of a person other than the

supplier;

(d) the goods were damaged after delivery;

(e) the goods cannot be detached/isolated without damaging them.

3. Claim Damages for Other Losses or Damage Suffered

Referring to Section 41(2) of the CPA, the consumer may also obtain damages for losses

other than the loss or damage suffered through a reduction in the value of the goods, which is

proved to be a result or consequence of the failure to comply with implied guarantees.

 In this aspect of remedies against supplier, it could be concluded that the remedies

provided by CPA are definitely more detailed and comprehensive compared to SOGA. It also

gives a balance between two parties, as it emphasises on the suppliers’ obligations to remedy

the goods if it is remediable, and while giving a right to reject to goods to the consumers, or to

claim for refunds or damages, they are subject to limitations.

B) Remedies Against The Manufacturer

As we can infer from SOGA, remedies provided only cover rights against the seller, but

not a manufacturer. A claim against a manufacturer would be too remote in a contract of sales

of good, due to the doctrine of privity of contract. That is to say, unless the person is directly

affected by the manufacturer, he or she will not be entitled to a claim. Another alternative in

the claim for damages against the manufacturer would be under tort of negligence, as in the

case of Donoghue v Stevenson 8 . However, CPA has also extended a consumer’s right to

manufacturers as well, whether in relation to the supply of goods or services. This can be found

in Part VII & VIII of the act respectively.

For example, Section 50 of the CPA provides consumer rights of redress against

manufacturer of goods where the goods fail to comply with implied guarantee as to:

(a) Acceptable quality under Section 32 ;

(b) Correspondence with description under Section 34 ;

(c) Repairs and spare parts under Section 37 ;

(d) Express guarantee given by the manufacturer in accordance with Section 38.

8
[1932] AC 562
 However this rights of redress are subjected to certain exceptions in which the failure is

due to (a) an act, default or omission of, or any representation made by, a person other than the

manufacturer or (b) a cause independent of human control, occurring after the goods have left

the control of the manufacturer. These are provided under Section 51.

1. Consumer to Claim for damages from Manufacturer

Similar to Section 41(2) of the CPA, in which the consumer may obtain damages from the

supplier through a reduction in the value of the goods, which is proved to be a result or

consequence of the failure to comply with implied guarantee, over here, Section 52(1) of the

CPA also provides that the consumer may obtain damages from the manufacturer:

a) for reduction in the value of the goods resulting from the manufacturer’s failure, for
instance :
i. the reduction below the price paid or
ii. reduction below the average retail price, or
b) for damages for any loss/damage suffered by the consumer, other than loss/damage

through a reduction, which proved to be consequence of the failure.

2. Require Manufacturer to Remedy Failure (Repair/Replace)

Besides claiming for damages, in circumstances where the consumer is entitled by an

express guarantee given by the manufacturer, the manufacturer has to remedy the failure by

either repairing the goods or replacing the goods of identical type by virtue of Section 52(2)

of the CPA.

It is also to be noted that, the actions above can only be commenced only if the consumer

has required the manufacturer to remedy the failure, but the manufacturer has refused or

neglected to remedy, or has not succeeded in remedying within a reasonable time. Or else, a
consumer will not be entitled to any remedy against the manufacturer. This whole part of

protection of the consumers against manufacturer which is absent in SOGA shows how far the

consumerism law has developed, that we no longer need to depend on law of contract or law

of tort to have any claims against a manufacturer.

C) Remedies Against The Producer - Product Liability

As mentioned, the 3rd party that a consumer can have protection against under CPA

would be the producers, besides the suppliers and the manufacturers, when it comes to

defective products. This comes under “Product liability” in Part X of the CPA, where it

provides consumers a remedy for damages suffered against the producers of product. “Producer”

is defined under the interpretation of Section 66(1) of the CPA, as a person who a)

manufactured the product, b) a person who won or abstracted the product, and c) the person

who carried out the industrial process. Whereas, a “product” means any goods, subject to sub-

section (2), to include product in another product, by virtue of being a component part, raw

material or otherwise.

This product liability provision under CPA gives the public an extra option for a claim

of damages against producers, when it comes to “defective products. It is no longer confined

to claims with regards to breach of implied guarantees as to acceptable quality of the goods9,

or implied guarantees that the goods comply with description.10 Section 67 CPA then explains

“defective product” as a product in which its safety is not what a person is generally entitled to

expect. In other words, there are defects in the product which make it unsafe to be used. What

9
Section 32 CPA
10
Section 34 CPA
constitutes “safety” can also be seen in sub-section 4, be it safety with respect to the products,

in the context of risk of damage to property, or even a risk of death or personal injury.

Summarily, this provision is clearly also an additional remedy provided under the CPA,

but not under SOGA. Previously, be it the buyers or consumers, they have always needed to

invoke the law of tort or contract when it comes to loss or damages sustained due to the

defective product. However, this is no longer an issue as this is now covered under CPA. The

consumers only need to prove the damage, the defect in the product and the causal link between

the two without the need to prove the existence of any fault or negligent on the part of the

producer or manufacturer.

CONCLUSION:

In conclusion, remedies provided by the SOGA and CPA are in fact, very different in

terms of the types of remedies and the liability of different parties. CPA definitely provides a

larger scope of protection to not just buyers but to consumers who use the goods, compared to

SOGA. Remedies provided by SOGA and CPA can be claimed together or separately.

Remedies provided by both Acts are summarised as follow:

For remedies under SOGA, it’s confined to only seller and buyer. As for seller, there

are two types of breach namely breach of implied conditions and breach of implied warranties.

For the first breach, the seller can repudiate the contract under Section 12(2) of SOGA or treat

the contract as breach of warranties as stated in Section 13 of SOGA. For the latter, the seller

may claim for damages under Section 12(3) of SOGA. As for remedies for buyer under SOGA,

there are 3 types which are firstly, a lien on the goods for price under Section 45(1)(a) of

SOGA, secondly, right of stoppage in transit stated in Section 45(1)(b) of SOGA and lastly

right of resale under Section 45(1)(c) of SOGA.

 For remedies under CPA, it’s wider and covered supplier, manufacturer and also

producer. When the goods supplied by the supplier did not comply with the guarantees, there

are three types of remedies available firstly, to remedy the failure within reasonable time under

Section 41(1) (a) of the CPA. Secondly, reject the goods or ask for reduction in value as stated

in Section 41 (1) (b) (i) and (ii) of the CPA and lastly, obtain from the supplier damages for

any loss or damage suffered as stated in Section 42 (2) of CPA. For the category of

manufacturer, the related section is Section 52 of the CPA. Under this Section, there are two

types of remedies available. Firstly, reduction in values under Section 52(1) (a) or damages

under Section 52 (1) (b). Secondly, the consumer may require the manufacturer to remedy the

failure by repairing replacing the goods as stated in Section 52(2) of CPA. As for the producer

category, the available section is Section 68 of the CPA.

BIBLIOGRAPHY

BOOKS
1. Wu, Min Aun, Consumer Protection Act 1999: Supply of Goods and Services, (Malaysia:
Pearson Education Malaysia Sdn. Bhd., 2000).

LEGISLATIONS
1. Sale of Goods Act 1967, Malaysia
2. Consumer Protection Act 1999
3. Contract Act 1950
4. Sale of Goods Act 1893, 1979, UK
5. Specific Relief Act 1950

CASES
1. Accosiated Metal Smelters v Tham Cheow Toh [1971] 1 MLJ 271
2. Lee Heng v Melchers [1963] MLJ 47
3. Donoghue v Stevenson [1932] AC 562

ARTICLES
1. S. Sothi Rachagan, Susheela Nair, “ Consumer Protection Law in Malaysia”, Online Posting,
12 Oct 2008, Law & Paneir, 27 Nov 2011.

< http://paneir.blogspot.com/2008/10/consumer-protection-law-in-malaysia.html>

2. Sakina Shaik, Shamsuddin Suhor, Rahman Ismail, et al., “Consumer’s Right to Redress against
Traders under the Law of Supply of Goods: A comparative study of Selected Jurisdictions”, 2 nd
International Conference On Business And Economic Research proceeding at Kedah Malaysia,
March 14-16, 2011. (Selangor: Conference Master Resources, 2011), 2106- 2123. 27 Nov 2011

<http://www.internationalconference.com.my/proceeding/2ndicber2011_proceeding/384-
2nd%20ICBER%202011%20PG%202106-2123%20Consumers%20Right.pdf>