When we start working in near future, one unavoidable thing that we must pay is income tax. The term of “income tax” is common among us but how many of us actually know how income tax works??
It is abide by law that we are compulsory to pay income tax. Generally, income tax is imposed based on a territorial basis in that only income accruing in or derived from Malaysia is liable to tax. However, resident individuals and other non-corporate entities are also taxed on foreign-sourced income remitted into Malaysia. Foreign-sourced incomes received by resident companies are not subject to tax even if such income is remitted to Malaysia.
Under world income scope basis, only income derived by tax residents from businesses of banking, insurance and air/sea transport operations is assessable.
Relief from double taxation of foreign-sourced income is available by means of bilateral credit if there is a tax treaty or unilateral relief if there is no tax treaty. The relief is restricted to the lower of Malaysian tax payable on the foreign-sourced income or foreign tax paid if there is a treaty or one-half of the foreign tax paid there is no treaty.
Sunday, April 25, 2010
Merchantable quality
One interesting law regarding Sale of Goods is Section 16(1)(b) of the Malaysian Sale of Goods Act 1957 where it reads:
“Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be of merchantable quality.”
However, the fact is that the word of “merchantable quality” is not defined neither in Malaysia Sale of Goods Act 1957 not English Sale of Goods Act 1893. Still, the English Supply of Goods (Implied Terms) Act 1973 introduced a definition of merchantable quality based on the recommendations of the Law Commission.
Merchantable quality is a question of fact, in answering that question, the tribunal of fact must be sure that it is applying its mind to the correct meaning of that word.
It is first rose when Lord Roskill has observed that 'the complications regarding the meaning of the word since 1893. They would seem to have arisen because of the gloss that lawyers in this country repeatedly sought to impose on this single and simple word by seeking to redefine it by the use of phrases which, as the cases show, raise as many if not more problems than they solve'.
Cases related to merchantable quality was discussed in Cehave’s Case by Lord Denning. To have a better view on what is merchantable quality, the statement of Lord Denning would surely provide further assistance in determining the merchantability of goods.
“Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be of merchantable quality.”
However, the fact is that the word of “merchantable quality” is not defined neither in Malaysia Sale of Goods Act 1957 not English Sale of Goods Act 1893. Still, the English Supply of Goods (Implied Terms) Act 1973 introduced a definition of merchantable quality based on the recommendations of the Law Commission.
Merchantable quality is a question of fact, in answering that question, the tribunal of fact must be sure that it is applying its mind to the correct meaning of that word.
It is first rose when Lord Roskill has observed that 'the complications regarding the meaning of the word since 1893. They would seem to have arisen because of the gloss that lawyers in this country repeatedly sought to impose on this single and simple word by seeking to redefine it by the use of phrases which, as the cases show, raise as many if not more problems than they solve'.
Cases related to merchantable quality was discussed in Cehave’s Case by Lord Denning. To have a better view on what is merchantable quality, the statement of Lord Denning would surely provide further assistance in determining the merchantability of goods.
Doctrine of Utmost Good Faith
The meaning of Doctrine of utmost most good faith is “each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract, whether such information is requested or not”. In simpler terms, it is mean that the both the parties must reveal all information that would manipulate the decision related to the contract.
Failure to disclose material information gives the other party the right to avoid the contract
In Insurance contract, the insured has the greater responsibility to disclose related information compared to the insurer because the insured have more knowledge regarding the subject matter of the insurance.
Insurance contract is based upon mutual trust and confidence between the insured and the insurer. That’s why insurance contract is said to be uberrimae fidei, or “the utmost good faith”. The case related to the utmost good faith is discussed in Goh Chooi Leng v. Public Life Co. Ltd. [1964]. In this case, the contract is said to be voidable because material information was not disclosed.
Failure to disclose material information gives the other party the right to avoid the contract
In Insurance contract, the insured has the greater responsibility to disclose related information compared to the insurer because the insured have more knowledge regarding the subject matter of the insurance.
Insurance contract is based upon mutual trust and confidence between the insured and the insurer. That’s why insurance contract is said to be uberrimae fidei, or “the utmost good faith”. The case related to the utmost good faith is discussed in Goh Chooi Leng v. Public Life Co. Ltd. [1964]. In this case, the contract is said to be voidable because material information was not disclosed.
The difference between warranty and condition
When we engaged in a sale of goods contract, there are two types of terms of contract which are ‘condition’ or ‘warranty’ [Section 12(1), Sale of Goods Contract].
So, what distinguish between a condition and warranty?? As stated in Section 12(2), condition is a stipulation which is essential to the main purpose of the contract, the breach of condition will leads to repudiation of a contract. In contrast, warranty is a stipulation which is collateral to the main purpose of the contract and its breach only leads to a claim for damages. [Section 12(3)]
Although the breach of condition will terminate the contract, the injured party can only claim for damages under some circumstances which are;
1) where the buyer waives the condition;
2) where the buyer elects to treat the breach of condition as a breach of warranty and claims damages only;
3) where the contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract; and
4) where the contract is for specific goods the property in which has passed to the buyer, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract.
There are certain guidelines to determine which term are condition or warranty, thus, if there is any breach of terms of contract and the matter is brought to the court, the decision to decide the matter argued is a condition or warranty is lie in the hand of the court.
(Source: Lee Mei Pheng, "General Principles of Malaysian Law" 5th Edition)
So, what distinguish between a condition and warranty?? As stated in Section 12(2), condition is a stipulation which is essential to the main purpose of the contract, the breach of condition will leads to repudiation of a contract. In contrast, warranty is a stipulation which is collateral to the main purpose of the contract and its breach only leads to a claim for damages. [Section 12(3)]
Although the breach of condition will terminate the contract, the injured party can only claim for damages under some circumstances which are;
1) where the buyer waives the condition;
2) where the buyer elects to treat the breach of condition as a breach of warranty and claims damages only;
3) where the contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract; and
4) where the contract is for specific goods the property in which has passed to the buyer, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract.
There are certain guidelines to determine which term are condition or warranty, thus, if there is any breach of terms of contract and the matter is brought to the court, the decision to decide the matter argued is a condition or warranty is lie in the hand of the court.
(Source: Lee Mei Pheng, "General Principles of Malaysian Law" 5th Edition)
Tuesday, April 20, 2010
Defamation
Generally speaking, defamation is the issuance of a false statement about another person, which causes that person to suffer harm. Slander involves the making of defamatory statements by a transitory (non-fixed) representation, usually an oral (spoken) representation. Libel involves the making of defamatory statements in a printed or fixed medium, such as a magazine or newspaper. Typically, the elements of a cause of action for defamation include:
1. A false and defamatory statement concerning another;
2. The unprivileged publication of the statement to a third party (that is, somebody other than the person defamed by the statement);
3. If the defamatory matter is of public concern, fault amounting at least to negligence on the part of the publisher; and
4. Damage to the plaintiff.
In the context of defamation law, a statement is "published" when it is made to the third party. That term does not mean that the statement has to be in print.
Damages are typically to the reputation of the plaintiff, but depending upon the laws of the jurisdiction it may be enough to establish mental anguish.
Most jurisdictions also recognize "per se" defamation, where the allegations are presumed to cause damage to the plaintiff. Typically, the following may consititute defamation per se:
• Attacks on a person's professional character or standing;
• Allegations that an unmarried person is unchaste;
• Allegations that a person is infected with a sexually transmitted disease;
• Allegations that the person has committed a crime of moral turpitude;
While actions for defamation have their roots in common law, most jurisdictions have now enacted statutes which modify the common law. They may change the elements of the cause of action, limit when an action may be filed, or modify the defenses to an action for defamation. Some may even require that the defendant be given an opportunity to apologize before the plaintiff can seek non-economic damages.
1. A false and defamatory statement concerning another;
2. The unprivileged publication of the statement to a third party (that is, somebody other than the person defamed by the statement);
3. If the defamatory matter is of public concern, fault amounting at least to negligence on the part of the publisher; and
4. Damage to the plaintiff.
In the context of defamation law, a statement is "published" when it is made to the third party. That term does not mean that the statement has to be in print.
Damages are typically to the reputation of the plaintiff, but depending upon the laws of the jurisdiction it may be enough to establish mental anguish.
Most jurisdictions also recognize "per se" defamation, where the allegations are presumed to cause damage to the plaintiff. Typically, the following may consititute defamation per se:
• Attacks on a person's professional character or standing;
• Allegations that an unmarried person is unchaste;
• Allegations that a person is infected with a sexually transmitted disease;
• Allegations that the person has committed a crime of moral turpitude;
While actions for defamation have their roots in common law, most jurisdictions have now enacted statutes which modify the common law. They may change the elements of the cause of action, limit when an action may be filed, or modify the defenses to an action for defamation. Some may even require that the defendant be given an opportunity to apologize before the plaintiff can seek non-economic damages.
Medical Malpractice Law and Litigation
Medical malpractice occurs where a medical practitioner acts in a negligent manner when treating a medical condition. Malpractice can occur from an action taken by the medical practitioner, or by the failure to take a medically appropriate action. Examples of medical malpractice include:
• Failure to diagnose, or misdiagnosis of a disease or medical condition;
• Failure to provide appropriate treatment for a medical condition;
• Unreasonable delay in treating a diagnosed medical condition;
The laws and rules governing malpractice lawsuits in each state can vary significantly.
A medical practitioner may also be legally liable if a patient does not give "informed consent" to a medical procedure that results in a harm to the patient, even if the procedure is performed properly.
For example, if a doctor does not tell a patient that a surgical procedure has a 50% chance of causing paralysis, the patient does not have the necessary information to make an informed choice to either have or refuse the operation.
If the patient has the operation, and is paralyzed as a result, the doctor may be liable even if the operation was performed flawlessly, as the patient might have refused the surgery if the risks were known.
If the patient is not harmed by the physician's error, the patient cannot recover damages as the result of the error. For example, if a doctor misdiagnoses stomach pain as caused by appendicitis, and surgery discloses that it resulted from a perforated ulcer, if the patient would have required the surgery to repair the ulcer the patient will probably be unable to bring a lawsuit - the surgery was necessary even with the correct diagnosis. However, if the patient was only suffering from indigestion, the unnecessary surgical procedure most likely would support a malpractice action.
Medical malpractice actions have been significantly affected by "tort reform." Malpractice cases are very expensive to litigate, and your recovery of damages may be limited by statute. It is necessary to seek advice from medical experts, who can be very costly to hire. Due to the highly technical nature of medical malpractice litigation, it is usually best to go to an attorney who specializes in medical malpractice law, and who has the resources necessary to develop your case, hire appropriate experts and, if necessary, to take your case to trial.
Sometimes, even when there is a clear case of medical negligence, a suit may not be appropriate. Due to the high costs of litigating medical malpractice cases, some injured people will find that the cost of litigation will exceed the amount of any damages award, and they are forced to choose between abandoning their claim or pursuing it at a financial loss "as a matter of principle."
• Failure to diagnose, or misdiagnosis of a disease or medical condition;
• Failure to provide appropriate treatment for a medical condition;
• Unreasonable delay in treating a diagnosed medical condition;
The laws and rules governing malpractice lawsuits in each state can vary significantly.
A medical practitioner may also be legally liable if a patient does not give "informed consent" to a medical procedure that results in a harm to the patient, even if the procedure is performed properly.
For example, if a doctor does not tell a patient that a surgical procedure has a 50% chance of causing paralysis, the patient does not have the necessary information to make an informed choice to either have or refuse the operation.
If the patient has the operation, and is paralyzed as a result, the doctor may be liable even if the operation was performed flawlessly, as the patient might have refused the surgery if the risks were known.
If the patient is not harmed by the physician's error, the patient cannot recover damages as the result of the error. For example, if a doctor misdiagnoses stomach pain as caused by appendicitis, and surgery discloses that it resulted from a perforated ulcer, if the patient would have required the surgery to repair the ulcer the patient will probably be unable to bring a lawsuit - the surgery was necessary even with the correct diagnosis. However, if the patient was only suffering from indigestion, the unnecessary surgical procedure most likely would support a malpractice action.
Medical malpractice actions have been significantly affected by "tort reform." Malpractice cases are very expensive to litigate, and your recovery of damages may be limited by statute. It is necessary to seek advice from medical experts, who can be very costly to hire. Due to the highly technical nature of medical malpractice litigation, it is usually best to go to an attorney who specializes in medical malpractice law, and who has the resources necessary to develop your case, hire appropriate experts and, if necessary, to take your case to trial.
Sometimes, even when there is a clear case of medical negligence, a suit may not be appropriate. Due to the high costs of litigating medical malpractice cases, some injured people will find that the cost of litigation will exceed the amount of any damages award, and they are forced to choose between abandoning their claim or pursuing it at a financial loss "as a matter of principle."
Saturday, April 3, 2010
Free Consent
Under Section 10 of Contracts Act 1950, it is stated that all agreement are contracts if they are made by free consent of parties. What is free consent?? By definition, consent means that the parties must have agreed upon the same sense. Free consents must happen in an agreement or else it is invalid. A contract without free consent is said to be void or happened to be a voidable contract depending on the situation of the cases. A contract is said without free consent when the following happened;
1) Coercion
Committing or threatening to commit any act forbidden by Penal Code or unlawful act done with intention of causing the person to enter the agreement
2) Undue Influence
Use ‘particular’ relationship to dominant or pressure the person to enter into an agreement
3) Fraud
Certain acts committed with intent to persuade another party to enter into a contract
4) Misrepresentation
Similar as fraud. The difference between fraud and misrepresentation is in case of misrepresentation, the person making representation believes the representation is true and in fraud, he does not believe the representation is true
5) Mistake
If parties enter into agreement by mistake, the contract is said to be void.
When consent to an agreement is caused by coercion, fraud, misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused [Section 19 (1)]
1) Coercion
Committing or threatening to commit any act forbidden by Penal Code or unlawful act done with intention of causing the person to enter the agreement
2) Undue Influence
Use ‘particular’ relationship to dominant or pressure the person to enter into an agreement
3) Fraud
Certain acts committed with intent to persuade another party to enter into a contract
4) Misrepresentation
Similar as fraud. The difference between fraud and misrepresentation is in case of misrepresentation, the person making representation believes the representation is true and in fraud, he does not believe the representation is true
5) Mistake
If parties enter into agreement by mistake, the contract is said to be void.
When consent to an agreement is caused by coercion, fraud, misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused [Section 19 (1)]
Tuesday, March 30, 2010
Breach of Contract
When related parties engaged in an agreement or contract, it is an obligation for both parties to follow the rules and regulations stated in the contract or agreement. However, things are not that perfect and in some cases, one party may revoke or breach the terms and conditions of the contract. In this case, another party can choose to sue and claim compensation for their damages. The Sales of Goods Act 1957 protects the rights of both parties in an agreement. There are several conditions of breach of contract which include;
Situation A (Price of goods)
When goods has passed to the buyer under a contract, if the buyer wrongfully neglects or refuses to pay for the goods according to the terms and conditions of the contract, the seller allow to sue the buyer for the price of the goods. So, the buyer has to pay the seller the amount said in the contract if the terms and conditions of contract are met.
Situation B (damages for non-acceptance)
The seller can to sue the buyer not only at the price of the goods, but damages for non-acceptance. According to Sales of Good Act 1957, if the buyer wrongfully neglects or refuses to accept and make payment to the goods, sellers have the right to sue buyers for the damages for non-acceptance.
Situation C (damages for non delivery)
On the buyer side, buyers have the rights to sue seller if the breach of contract is met. This means that if the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer stand a right to sue the seller about the damages for non-delivery.
Situation A (Price of goods)
When goods has passed to the buyer under a contract, if the buyer wrongfully neglects or refuses to pay for the goods according to the terms and conditions of the contract, the seller allow to sue the buyer for the price of the goods. So, the buyer has to pay the seller the amount said in the contract if the terms and conditions of contract are met.
Situation B (damages for non-acceptance)
The seller can to sue the buyer not only at the price of the goods, but damages for non-acceptance. According to Sales of Good Act 1957, if the buyer wrongfully neglects or refuses to accept and make payment to the goods, sellers have the right to sue buyers for the damages for non-acceptance.
Situation C (damages for non delivery)
On the buyer side, buyers have the rights to sue seller if the breach of contract is met. This means that if the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer stand a right to sue the seller about the damages for non-delivery.
Sunday, March 21, 2010
Ultra Vires Doctrine
Ultra Vires means “beyond the power of” in Latin. The Ultra Vires Doctrine is a policy in which the memorandum of Association must state the objects of the company. The purpose of the objects clause is to define and limit the activities which the company is permitted to undertake.
The effects of Section 20(1) are that the company is estopped from claiming a contract ultra vires when the ultra vires contract is fully performed. Thus, the creditors are protected by the said section.
Company may by special resultions alter the provision of its memorandum with respect to the objects of the company in order to authorize acts which otherwise would be ultra vires. [ection 28(1) Companies Act 1965]
The effects of Section 20(1) are that the company is estopped from claiming a contract ultra vires when the ultra vires contract is fully performed. Thus, the creditors are protected by the said section.
Company may by special resultions alter the provision of its memorandum with respect to the objects of the company in order to authorize acts which otherwise would be ultra vires. [ection 28(1) Companies Act 1965]
Thursday, March 11, 2010
Let’s Brain Storm
Let assumed that the case following happened.
“KK Storage is a supplier that runs in Puchong Housing Area. The nature of the business is to sells and provides grocery items to small mini mart and acts as a supplier. One of its clients, ABC Mart engaged into contract with KK Storage to get supply of grocery items such as food and beverages, household items from KK Storage. However, ABC Mart has breach the contract.”
What are the remedies available for KK Storage?
There are few remedies available for KK Storage. If ABC Mart haven’t pay for the goods they ordered and the goods is still in possession with KK Storage, the company has a lien on the goods for the price [section 46(1) (a), sale of goods act 1957]
If KK Storage only has a part of the possession of the goods, it has right to stop the goods in transit if the buyer is insolvent. [Section 46(1) (b), sale of goods act 1957]
Besides that, KK Storage can sue ABC Mart for the price of the goods where th buyer wrongfully neglects or refuses to accept and pay for the goods [Section 55, Sale of Goods Contract 1957]
“KK Storage is a supplier that runs in Puchong Housing Area. The nature of the business is to sells and provides grocery items to small mini mart and acts as a supplier. One of its clients, ABC Mart engaged into contract with KK Storage to get supply of grocery items such as food and beverages, household items from KK Storage. However, ABC Mart has breach the contract.”
What are the remedies available for KK Storage?
There are few remedies available for KK Storage. If ABC Mart haven’t pay for the goods they ordered and the goods is still in possession with KK Storage, the company has a lien on the goods for the price [section 46(1) (a), sale of goods act 1957]
If KK Storage only has a part of the possession of the goods, it has right to stop the goods in transit if the buyer is insolvent. [Section 46(1) (b), sale of goods act 1957]
Besides that, KK Storage can sue ABC Mart for the price of the goods where th buyer wrongfully neglects or refuses to accept and pay for the goods [Section 55, Sale of Goods Contract 1957]
Sunday, March 7, 2010
Nemo dat quod non habet
By definition, nemo dat quod non habet means where goods are sold by person who is not owner and without the consent of original owner, the buyer acquires no better title than the seller had. It means that the seller will still owned the goods if the goods is sold by third party and the sale of goods is not acknowledged by the seller.
But, there are some exceptions to the rule such as;
- Estoppel
- Sale by merchantile agent in the ordinary course of business, the buyer will obtain good title
- Sale by joint owner
- Sale under voidable title
- Sale by seller in possession after sale
- Sale by buyer in possession
But, there are some exceptions to the rule such as;
- Estoppel
- Sale by merchantile agent in the ordinary course of business, the buyer will obtain good title
- Sale by joint owner
- Sale under voidable title
- Sale by seller in possession after sale
- Sale by buyer in possession
Wednesday, February 24, 2010
Dissolving of company
When a company is starting up, company needs to go through a lot of procedures that are abide by law. So, the concept is also the same when a company wanted to dissolve. Another term to dissolve the company is called ‘liquidation’. The dissolving of company must follow proper legal procedure in following ways;
- Registrar of Companies
Will striking off the register summarily a company which appears to be defunct [Section 308, Companies Act 1965]
- Court
Aproving a scheme of arrangement,may order the immediate dissolution of company [Section 178, Companies Act 1965]
- Voluntary Liquidation
Member voluntarily pass resolution by winding up
- Compulsory liquidation (Court order)
- Registrar of Companies
Will striking off the register summarily a company which appears to be defunct [Section 308, Companies Act 1965]
- Court
Aproving a scheme of arrangement,may order the immediate dissolution of company [Section 178, Companies Act 1965]
- Voluntary Liquidation
Member voluntarily pass resolution by winding up
- Compulsory liquidation (Court order)
Wednesday, February 10, 2010
Tutorial 1
Case 2:
Geena runs an unregistered online investment portal from her home in KL where she managed to get people deposit money to her account. It was discovered that the investment was a scam and she attempted to flee with the money, only to be arrested in the airport by immigration officers because she held a fake passport.
Case 1:
Ryan called and talked on the phone with his wife without using the use of hands-free device while driving his car back home in Georgetown. While talking, he lost control over his car and eventually hit a walking pedestrian.
Is Ryan liable under civil or criminal law? What should the pedestrian do to recover his injuries/loss? Should this case go to court, what will be Ryan’s right?
Is Ryan liable under civil or criminal law? What should the pedestrian do to recover his injuries/loss? Should this case go to court, what will be Ryan’s right?
In my opinion, Ryan is liable under civil law because no people is dead in the accident. Civil law is more like a private law that involved 2 people, it covers areas such as contract,tort and trust. But if anyone died in this accident, Ryan is liable under criminal law where criminal law is involved with the government and the people.This case should not bring into the court. This is because Ryan will be charged by the government for dangerous driving. Besides this, if the pedestrian doesnt hurt much, things can be settle without touching the law. If the pedestrian injured badly as a result of negligence of Ryan, he can take legal action against Ryan, he can recover the damages to compensate for his harm.
Case 2:
Determine Geena’s liability: civil or criminal? What law(s) and statutes you think Geena has violated?
Geena is liable under criminal law, fraudulent act. This is because she is running away with the money, fraudulent of making scam, identity fraud and so on. She is holding a fake passport, therefore is violated with immigration act and fraudulent act.
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