CONSUMER

LAW

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 INTRODUCTION
 In 1962, J.F. Kennedy, (US President) had announced
that there are 4 basic rights of a consumer – right to
safety, right to be informed, right to choose and right to
express ideas.
 International Organization of Consumer Unions (IOCU)
has added another 4 rights of consumer – right to basic
needs, right to redress, right to consumer education and
right a healthy environment.

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 Thus, there are 8 basic rights of
consumer:-
1. right to basic needs
2. right to choose
3. right to be informed
4. right to safety
5. right to redress
6. right a healthy environment
7. right to consumer education
8. right to express ideas
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 In Malaysia, two statutes of great
significance in consumer purchases are
the Contract Act 1950 and the Sale of
Goods Act 1957.
 The Sale of Goods Act 1957 is based
on market individualisme ideology.
 This situation remained until the
adoption of the Consumer Protection
Act 1999 which is more consumer
welfarisme.
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 CONSUMER PROTECTION ACT
 After ten years of discussion and five years
after its drafting, a more comprehensive
statute entitled CPA 1999 became law on the
15th November 1999.
 Main objective – to provide greater protection
for consumers.
 Provides simple, inexpensive redressal to the
customer’s grievance and relief of a specific
nature.

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 May refer dispute or claim less than
RM10,000 to established Customer
Redressal Tribunal (before latest
amendment).
 After amendment – amount claim up to
RM25,000.00

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• The Act comprising 14 parts and a total
of 150 sections deals with selected
areas of law not yet provided for in other
statutes.
• It does not seek to repeal or replace
existing law.

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WHO IS A CONSUMER?
 S. 3 Consumer Protection Act -
Consumer means a person who
acquire or use goods or services of a
kind ordinarily acquired for personal,
domestic or household purpose, use or
consumption…
A service or product recipient
A person who needs, current using or
has used a particular service or product.
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One who buys or agree to buy any
products for a consideration or makes
use of pay for any services which has
been paid or promised or partly paid
and partly promised or under any
system of deferred payment

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RIGHTS AS A CONSUMER
 1. Rights to Basic Needs
 Right to all the products and services of
a daily basic needs that guarantee
survival (adequate food, clothing,
shelter, health care, education and
sanitation)

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 2. Rights to Choose
 Right to access to a variety of products
and services at competitive prices and
in the case of monopolies, to have an
assurance of satisfactorily quality and
services at a fair price.

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 3. Right to Be Informed
 Right to obtain adequate, accurate and
precise information and facts about the
product services that customer want to
consume in order to act wisely and
responsibly to make the right choice or
decision.
 Right to be protected form misleading or
inaccurate publicity material, whether
included in advertising, labeling, packaging or
other means. (Prohibition Activities by Act)

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 Among prohibited activities by Act
S 9 – Misleading Conduct
S 10 - False and Misleading
Representation
S 12 - Misleading indication as to price
S 13 - Bait advertising

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S 14 – Gift, prizes, free offers without
intent to provide or charge higher price or
reduce quality or quantity
S 15 – Claim that goods are limited

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 4. Right to Safety
 Right to be protected against product,
services and manufacturing processes
that may expose health and in life
danger.
 S 23 – Goods or services unsafe and
injurious to the public are prohibited.

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 S 24 – Goods or services that do not
comply with the safety provisions should
not be imported.

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 5. Right to redress
 Right to a fair settlement of just claims
which includes the right to receive
compensation for misrepresentation of
shoddy goods or unsatisfactorily
services and the availability of legal aid
or redress for small claims.

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• Freedom to buy or to be assured that the
product or services is contain through right
channel based on the right price.

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 6. Right to A Healthy Environment
 Right to a physical environment that will
enhance the quality of life which
includes the need to protect and
improve the environment for present
and future generations.

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Consumers should:-
Recycle-reuse the product-paper
No open burning
Use less water and electricity
Plant more tress.

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 Companies should:-
Follow the law
Reduce the waste
Introduce an effective ways to reduce
waste
o Note:
 3 R:-
Reduce
Re use
Re cycle
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 7. Right to Consumer Education
 Right to acquire the knowledge and
skills needed for taking action to
influence factors which affect customer
decisions in order to be informed
consumer throughout life.

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 8. Right to Express Ideas
 Right to express ideas individually or
representatively.
 Thus, consumer’s interest will be
considered in underlining not only the
government policies but also private
companies product policies.

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THE CONSUMER’S CONTRACTUAL
RIGHT
 The statutory rights – in respect of
defect in title and defective goods the
consumer has certain inalienable
rights/statutory rights.
Eg – under Sale of Goods Act.
 These rights available to the consumer
against the seller alone, arise by virtue
of the doctrine of privities of contract.

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 PRIVITY OF CONTRACT
 According to the doctrine of privity of contract
only a party to a contract can take rights or
obligations under it.
 Therefore, only a party to contract can sue or
be sued on it. (buyer v. seller)
 In practical terms, this means that in respect
of a breach of the statutory rights, the
consumer can sue the seller , and even this
action is not open to the customer unless he
is also the buyer.

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 It is not possible for a non-contracting
party, such as a member of the
consumer’s family or a friend, or the
recipient of the goods as a gift, or a
subsequent private purchaser from the
consumer, to sue the original seller
unless the beer can be construed as
acting as the agent for the non
contracting party (eg where a wife acts
as agent for her husband)

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 The doctrine of privities is thus a severe
limitation on the efficacy of the
consumer’s statutory rights.
 The consequence is that an action by
the consumer against the manufacturer
will have to be based on the
manufacturer’s guarantee (if any) in tort.

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 CASE: DANIELS V WHITE AND TARBARD (1938)
 Facts: Mr Daniels purchased some lemonade from
Mrs. Tarbard.
 The lemonade, manufactured and bottled by [Link]
& Sons Ltd. has somehow been contaminated by
carbolic acid, which made both Mr. and Mrs. Daniel
ill.
 Held: Mr. Daniel could succeed on a claim against
Mrs. Tarbard.
 But note that Mrs. Daniels had no claim against Mrs.
Tarbard as she has nor bought the lemonade and
was not a party to the contract.

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 THE CONSUMER RIGHTS IN TORT
 An action by consumer against the
manufacturer is to sue in tort – the tort of
negligence.
 In order to succeed in negligence action, the
plaintiff must prove more than the mere
existence of carelessness.

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 He must prove:
i. That the def was under a duty of care to
him; and
ii. That there has been a breach of that
duty;
iii. That as result the ptf has suffered
damage which is not too remote.

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 THE DUTY OF CARE
 The leading case is:
 DONOGHUE V STEVENSON
 Facts: Mrs. Donoghue visited a café and there drank
from a bottle of ginger beer which had been bought
for her by a friend.
 Among the contents of the bottle Mrs. Donoghue then
discovered a decomposing snail, previously hidden
by the opaque glass of the bottle.
 Mrs. Donoghue became ill and claimed damages
from the manufacturer.

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 Held: the manufacturer of goods sold by him
to a retailer or other distributor in
circumstances which prevent the retailer or
ultimate consumer from discovering by
inspection any defect, is under a legal duty of
care to the ultimate consumer to take
reasonable care that goods are free from any
defect likely to cause injury or damage.

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 The ‘ultimate customer’ need not
necessarily be a purchaser but could
not be anyone forespeak injured by a
dangerous product.
 The defect need not necessarily be a
defect in the actual manufacturing
process, it may equally be in design, or
in the container, or even in the labeling
of the goods.

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 DONOGHUE V. STEVENSON is an authority for the
much wider proposition underlying the development
of the whole concept of the duty of care in
negligence, namely that…’ You must take reasonable
care to avoid acts or omission which you can
reasonably foresee would be likely to injure your
‘neighbor's i.e ‘…persons who are so closely and
directly affected by my act that 1 ought reasonably
foresee to have them in contemplation as being so
affected when I am directing my mind to the acts or
omissions which are called in question’. (Lord Atkins).

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 This case is in essence a product
liability case – a negligent manufacturer
is liable to an ultimate consumer who
suffers damage.

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PRODUCT LIABILITY UNDER
CONSUMER ACT 1999
 S 66(1) – means any goods and subject
to subsection(2), includes a product in
which is comprised in another product,
whether by virtue of being a component
part, raw materials or otherwise.

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• S 67(1) – there is a defect in product if the
safety of the product is not such as a
person is generally entitled to expect.

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 LIABILITY FOR DEFECTIVE PRODUCT
 S 68(1) – the following persons shall be
liable:
 (a) the producer of the product
 (b) the person by putting his name on the
product or using a trade mark in relation to
the product has held himself out to be the
producer of the product
 (c) the person who has imported the product
into Malaysia in order to supply it to another
person

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PROHIBITION ON EXCLUSION FROM
LIABILITY
 S 71 – the liability of a person under this
Part to a person who has suffered
damage caused wholly or partly be a
defect in a product, or to a dependant of
such a person, shall not be limited or
excluded by any contract term, notice or
other provision.

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 E.G Cases by Consumer
Claims Tribunal
• Case 1 – complainant seek treatment from a
beauty centre to remove tattoo at her arm.
Additional fee was later imposed & the treatment
was not even half of the arm been done.
• Complainant claimed from respondent.
• Tribunal ordered respondent to pay RM800
within 14 days.

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 Case 2
• Complainant paid deposit RM1,000 for
Inokom Atos but there was no stock for colour
of her choice. She was instead was offered
another color which she refused and decided
to cancel her booking. Respondent refused to
return the booking fee, because she already
‘trade in’ her old car with respondent.
• The ruling was in favour of the complainant
and she was awarded RM700.

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 Case 3
• Complainant ordered built in display cabinet
with a deposit of RM7,000 & requested the
cabinet to be installed before Hari Raya. The
cabinet was not installed as promised &
respondent argued that complainant
requested to change certain design & did not
response/complaint during delivery of the
cabinet.
• Tribunal awarded complainant RM500 and
ordered respondent to alter the design.

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