• About
  • Advertise
  • Write For Us
  • Privacy Policy
  • Contact Us
Subscribe
Smart Investor Malaysia
Advertisement
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia
No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia
No Result
View All Result
Smart Investor Malaysia
No Result
View All Result
Advertise with Smart Investor Advertise with Smart Investor Advertise with Smart Investor
Home Enterprise

No Such Thing As A Standard Contract

3 years ago
0
contract
76
SHARES
149
VIEWS
Share on FacebookShare on Twitter

As a lawyer who has had the opportunity to represent and defend different types of clientele; from medium to large scale businesses, corporations and high net worth individuals, I am occasionally confronted with the odd client who would retort, “This is a pretty standard contract, right? So why do we need to review it? Just sign!” or “Why do we need to take so long to look into this joint venture agreement? Isn’t this pretty much a standard contract?” or worst still “Can you give me a discount since it’s a standard contract!”

In my 15 years of legal experience, I have never come across two contracts that are exactly the same. I have never given any of my clients “standard” contracts because no such thing exists in my books.

Contracts should be crafted according to the particular and specific requirements, needs and requests of the parties involved.

It is always good to remember that contracts once entered into and signed are binding on the signatories. You can’t plead ignorance nor can you say that you did not understand the terms of the contract or that you did not foresee the consequences of breach or non-compliance.

Unless of course you were coerced, forced or unduly influenced into signing the said contract. However, do take note that the threshold of proof for coercion and undue influence is one that is high and onerous.

contract

Oftentimes clients, in a bid to save on legal cost, use “standard” contract templates that they obtain from the Internet. You are forewarned here that doing so and not reviewing the specific terms can lead to devastating legal repercussions.

Let me give you some examples of matters that are not covered in these template contracts that you find on the Internet.

“Jurisdiction” Clauses

The laws applicable in any other country will not be applicable here in Malaysia. This clause is extremely important if you are contracting with a foreign party.

For example, if you are entering into a contract with a party from Singapore but the subject matter of the contract, for example the sale of a factory in Malaysia and the governing laws are Singapore, you will be faced with difficulty in the event litigation arises.

If you have an incompatible or inconsistent clause in your agreement, it will make the litigation process rather cumbersome and costly for you. The issue of jurisdiction will have to be dealt with before the substantive issues of fact and law can be addressed.

This is an unduly protracted and costly affair.

The Appropriate “Governing Laws”

contract law

Oftentimes when you use a standard contract, no one looks at the ‘Governing Laws’ clause.

There is a huge difference between the arbitration process and laws as compared to the Court process. Arbitration is an excellent alternative to litigation but if the value of your contract is small and the subject matter of the dispute is straightforward, then the cost of the arbitration process may exceed the value of your claim in itself. 

Do not attempt to deal with governing laws and jurisdiction in the same wording. The two concepts are different and the contract should address them separately.

Conflicting Clauses

contract

Let’s assume two people enter into a contract which contains Clause (1) and Clause (2). Further let’s suppose that the two clauses do not contradict one another yet come into conflict with each other. For example:

This contract shall only be terminated upon mutual agreement by both parties

Clause (1)

This contract may be terminated at any time upon written notice to the other party

Clause (2)

Clearly both these clauses can be in conflict with one another. Conflicting clauses are one of the most commonly litigated contractual disputes in Malaysia. 

Once there are conflicting clauses, the Courts will then have to resolve the conflict by interpreting and “making sense” of the contract by reading all of the contractual documents in context and also consider parties’ commercial intentions by way of oral evidence in Court.

It is worthy to remember that not all standard contracts are advantageous. A standard contract may not capture the specific needs and circumstances of your business, and therefore not protect you from risks. On the contrary a badly drafted standard contract that you glean off the internet can cause more damage than benefit to you.

Always remember that there is no such thing as a standard contract. You are entitled to negotiate the terms of a contract you wish to enter into based on your own circumstances and facts. Investing in good legal and professional advice will reduce risk and save you a lot of legal cost in the long run.

Lawyer’s fees may seem expensive when you voluntarily decide to hire them initially but it is wise to remember that lawyers become more expensive when you have no choice but to hire them just because you decided not to in the first place.

This article was written by Sharmila Ravindran

Previous Post

Should I Take Out My EPF To Settle My Housing Loan?

Next Post

3 Important Steps For Your Mortgage Application

Next Post
mortgage

3 Important Steps For Your Mortgage Application

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Morningstar Awards 2024 Morningstar Awards 2024 Morningstar Awards 2024
  • Trending
  • Comments
  • Latest

Robo Advisor In Malaysia, 8 Robo Advisor Platforms To Choose From

17/08/2022
A calculator on financial chart, financial concept

Tax For The 6 Common Investments In Malaysia

19/09/2023

MRTT VS MRTA, What’s The Difference?

11/10/2023

How To Open A CDS And Share Trading Account?

02/05/2023

Digital Fundraising Platforms in Malaysia

Retirement Plans for the Self-Employed

SC Guidelines On Digital Assets

Retirement planning advise from the experts

Retirement Planning: Best Practices and Advice From Experts

「澳門銀河」再與騰訊音樂娛樂集團攜手呈獻 2025 TMEA騰訊音樂娛樂盛典 8月於銀河綜藝館頒發各大獎項

18/07/2025

F88 earns Gold Level Certification for Client Protection

18/07/2025

趨勢科技連續20次獲 Gartner® Magic Quadrant™ 確認為領導者

18/07/2025

Trend Micro Celebrates 20th Consecutive Recognition as a Leader in Gartner® Magic Quadrant™ Endpoint Protection Platforms

18/07/2025

「澳門銀河」再與騰訊音樂娛樂集團攜手呈獻 2025 TMEA騰訊音樂娛樂盛典 8月於銀河綜藝館頒發各大獎項

12 hours ago

F88 earns Gold Level Certification for Client Protection

12 hours ago

趨勢科技連續20次獲 Gartner® Magic Quadrant™ 確認為領導者

13 hours ago

Trend Micro Celebrates 20th Consecutive Recognition as a Leader in Gartner® Magic Quadrant™ Endpoint Protection Platforms

13 hours ago
The Smart Investor

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

Category

  • About
  • Subscribe
  • Write For Us
  • Payment Policy
  • Shipping Policy
  • Privacy Policy
  • Contact Us

Sign up to read our newsletter

  • About
  • Contact Us
  • Home
  • Home (Bahasa Malayu)
  • Newsletter
  • Payment Policy
  • Privacy Policy
  • Shipping Policy
  • Subscribe
  • Write For Us

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.