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COMMERCIAL LAW LAW 243

Introduction

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

WHAT IS COMMERCIAL LAW?

Commercial law (also known as business law) provides a comprehensive coverage of the law relating to business.

Source: Wu Min Aun & Beatrix Vohrah, Commercial law of Malaysia, Longman Publisher, 2008. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

OBJECTIVE OF THE SUBJECT


Understand the basic principles of law and regulations affecting business transactions. Understand the term used in the legal environment of business. Apply conceptual knowledge to real problems.

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

CONTENTS

Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: Chapter 6:

Malaysian legal system Law of contract Negotiable instruments Law of agency Law on hire purchase Law of partnership

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

COMMERCIAL LAW
Chapter 1: Malaysian legal system

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

LEARNING OBJECTIVE
By the end of this chapter, students should be able to define the word law and understand the concept of law in Malaysia.

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

SUBTOPICS
1. 2. 3. 4. What is law? Classification of law Sources of Malaysian law Judicial system in Malaysia

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

CHAPTER 1: MALAYSIAN LEGAL SYSTEM


Subtopic 1: What is law?
Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

1.
Activity: Brainstorm

WHAT IS LAW?

What comes to your mind when you heard the word Law?

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

Cont.
> Oxford Dictionary: The system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition penalties.

Source: Oxford dictionary. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.

> Sir John Salmond


(1862-1924):
The body of principles recognized and applied by the state in the administration of justice.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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CHAPTER 1: MALAYSIAN LEGAL SYSTEM


Subtopic 2: Classification of law
Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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2.

CLASSIFICATION OF LAW

LAW

Public law (individual+state)

International law (state+state)

Private law (individual+individual)

Constitutional law

Criminal law

Public international law

Private International law

e.g. Law of contract

e.g. Law Of trust

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
Public law: The law which governs the relationship between individuals and the state. Public law may be further subdivided into two categories i.e. constitutional law and criminal law. Constitutional law lays down the rights of individuals in the state. It deals with questions such as supremacy of Parliament and rights of citizens. It also covers areas dealing with state and federal powers. Criminal law codifies the various offences committed by individuals against the state. A crime is a wrong against the state for which punishment is inflicted by the state.
Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
International law: The law which governs the relationship between state and state. It may be subdivided into two categories: 1. Public international law 2. Private international law.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
Private law: Private law concerned with matters that affect the rights and duties of individuals amongst themselves.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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CHAPTER 1: MALAYSIAN LEGAL SYSTEM


Subtopic 3: Sources of Malaysian law
Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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3.

SOURCES OF MALAYSIAN LAW

> The main sources of Malaysian law are: A. Written law (also referred to as statute law): 1. Federal Constitution 2. State Constitution 3. Legislation 4. Subsidiary legislation Unwritten law: 1. English law 2. Judicial decision 3. Customary law Islamic law

B.

C.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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A.
1.

WRITTEN LAW

Federal Constitution: - Supreme law of Malaysia - Provides the powers of the Federal & State Governments - Provides fundamental rights of individual

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
2. State Constitution: - Regulates State Governments - Contains provisions derived from 8th schedule of the Federal Constitution
Legislation: - enacted by Parliament and the state assemblies Act: laws made after 1957 Ordinances: - laws made 1946-1957 - laws in Sarawak

3.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
4. Subsidiary legislation: - Laws made under any Acts, Enactments or Ordinances - Very important because specify the laws in more detail and for everyday matters - Example: Parent Act (main law) : Hire-Purchase Act 1957 Subsidiary Legislation : Hire-Purchase (Repossession) Regulation - Subsidiary legislation made in contravention of either a parent Act or the Constitution is void.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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B.
1.

UNWRITTEN LAW

English law: - Applicable in the absence of local laws - Suitable to local circumstances English Commercial Law?

Section 5(2) of the Civil Law Act 1956, English commercial law applies to Penang, Malacca, Sabah & Sarawak If no local laws applicable Today, many local laws dealing with commercial matters e.g. Contracts Act 1950, Partnership Act 1961, Companies Act 1965
Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
2. Judicial decisions: - Judges decision - Doctrine of binding precedent : Not decide cases arbitrarily- must follow precedents (previous decisions of similar situations). Each court is bound by the decisions of courts of the same level or higher than it in the same hierarchy of courts, whether or not it believes a decision is correct.

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
3. Customary law: - Customs practiced by local people - Generally, customs relating to family law are given legal force by courts in Malaysia-marriage, divorce, inheritance - Sabah and Sarawak: native customary laws apply - Peninsular Malaysia: Adat Perpatih - Malays in NS & Naning in Melaka - land, lineage, election of rulers Adat Temenggung - many states - from Palembang, Sumatra
Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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C.

ISLAMIC LAW

applicable to Muslims only, does not apply to non Muslims - family matters (marriage and divorce) - estate matters (inheritance, wasiat)

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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CHAPTER 1: MALAYSIAN LEGAL SYSTEM


Subtopic 4: Judicial system in Malaysia
Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Assignment

4.

JUDICIAL SYSTEM IN MALAYSIA


FEDERAL COURT COURT OF APPEAL

High Court in Malaya Syariah Court Native Court Sessions Court Juvenile Court Magistrates Court Penghulus Court

High Court in Sabah & Swak

Syariah Court Session Court Juvenile Court Magistrates Court

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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QUESTIONS
1. The main sources of Malaysian law comprise: statute law, unwritten law and Islamic law (True / False)

2.

The following are written law except: a. Legislation enacted by Parliament and State Assemblies b. Judicial decisions of the superior courts c. Subsidiary legislation d. State Constitutions

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
3. Unwritten law also referred to as statute law (True / False)
In Perak, Malacca, Sabah and Sarawak, English commercial law at the date on which the matter has to be decided is applicable in the absence of local legislation (True / False)

4.

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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Cont.
5. 6. Judge decides cases arbitrarily without refer to decided cases (True / False) The following statements are true except: a. Federal Constitution provides fundamental rights of individual b. Judge must follow precedents (previous decisions of similar situations) c. English law applicable in the absence of local laws eventhough not suitable with local circumstances d. State Constitutions contains provisions derived from 8th schedule of the Federal Constitution
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Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

Cont.
7.
8.

Subsidiary legislation made in contravention of either a parent Act or the Constitution is voidable (True / False)
Private law is the law which governs the relationship between individuals and state (True / False) Define the word law? ___________________________________________ ___________________________________________

10. What is meant by judicial precedent? ___________________________________________ ___________________________________________


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Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

THANK YOU!

Copyright lecture notes prepared by Miss Fadhilah binti Abdul Ghani

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