Consumer Protection Act 1999

1. Introduction

a) The use of CPA is very important because:

Contracts Act 1950 is too wide as it applies to all types of contracts based on the
principle of freedom of contract. SOGA 1957 does not provide specific protection for
consumers as the terms regarding condition and warranty under this act can be
excluded by certain parties especially the seller. Freedom of contract means that
parties are free to set the terms of the contract. However, in the case of consumer-
seller relationship, the seller will usually set the terms beforehand, leaving the
consumer at a lesser advantage.

b) Scope of CPA

Applies to all types of transaction including sales of goods, hire purchase etc.
Includes service offered although no goods are offered (wider than the scope of
SOGA). Only applicable to consumers as defined under section 3 of CPA.

Section 3: a person who

(a) Acquires or uses goods or services of a kind ordinarily acquired for personal,
domestic or household purpose, use or consumption; and

(b) Does not acquire the goods… primarily for the purpose of

(i) Resupplying them in trade

(ii) Consuming them in the course of manufacturing process

(iii) In the case of goods, repairing or treating, in trade, other goods or fixtures on
land.

Under section 3 of CPA, price is defined to include any form of consideration (SOGA
only includes monetary value as price). Under section 3 CPA, the term used is
supplier (SOGA uses the term seller. Seller = supplier, and buyer = consumer).
Hence, a consumer under CPA can bring an action against the supplier (CPA
doesn’t care about contract per se) whereas this is not allowed under SOGA. Part 6
uses the term guarantee (SOGA uses the term warranty and condition).
Section 6(1) CPA provides that the provisions in this Act shall have effect
notwithstanding anything contrary in any agreement (Section 62 allows for exclusion
of implied terms and conditions).

2. Guarantee in respect of the supply of goods under the CPA 1999

a) The guarantees are set out in sections 31 – 38 CPA.

b) Section 31(1), the following guarantees shall be implied if the goods are
supplied to a consumer;

(a) That the supplier has the right to sell the goods

(b) That the goods are free from any hidden charge

(c) That the consumer has the right to quiet possession of the goods except for
situations in proviso under the same paragraph.

i. Section 31(1)(a)

Section 31(6), right to sell - a right to dispose of the ownership of the goods to the
consumer at the time when that ownership is to pass. This right is similar to section
14(a) of SOGA (implied condition on the part of the seller). Hence, the consumer
does not need to ask the supplier whether he has such right. If the seller does not
have such right, then the consumer will not have the right to such goods. Since the
provisions in SOGA and CPA are the same, the common law cases for SOGA can
also be used for CPA (Rowland Divall case). Both sections can be used concurrently
or separately.

ii. Section 31(1)(b)

Almost similar with section 14(c) SOGA but under SOGA, the remedy is in the form
of warranty (limited to damages only). Under section 31 CPA, it is implied guarantee.
Section 31(6): definition of undisclosed security.

iii. Section 31(1)(c)

The consumer has a right to quiet possession of the goods, except in so far as that
right is varied by

i. A term of agreement for supply where that agreement is a hire-purchase

agreement within the meaning of the Hire Purchase Act 1976;
 ii. A disclosed security;
iii. A term of the agreement for supply

Subsection (2): the supplier shall first orally advise the consumer as to the way in
which his right to quiet possession of the goods may be varied.

Subsection (3): the advice must be sufficient to enable a reasonable consumer to

understand the general nature and effect of the variation. However, it must be noted
that although it may be varied, it will not exclude the implied guarantee to the
contract. This variation is only made to allow commercial transaction to flow
smoothly since if it is followed strictly, it will cause hardship in such commercial
transaction.

c) Section 32 (1): if the goods are supplied to a consumer, there shall be

implied guarantee that goods are of acceptable quality.

Almost similar to section 16(1)(b) SOGA.

To determine the acceptable quality - section 32(2)(a),

Goods shall be deemed to be of acceptable quality if they are

(i) fit for all the purposes for which goods of the type in question are
commonly supplied
(ii) acceptable in appearance and finish
(iii) free from minor defects
(iv) safe; and
(v) durable

Section 32(2)(b): a reasonable consumer fully acquinted with the state and
conditions of the goods, including any hidden defects, would regard the goods as
acceptable having regard to

i. The nature of the goods

ii. The price
iii. Any statements made about the goods on any packaging or label on the
goods
iv. Any representation made about the goods by the supplier or the
manufacturer; and
 v. All other relevant circumstances of the supply of the goods.

Meaning that even if there are some hidden defects, the goods can be considered as
acceptable quality by looking at the stated factors above.

*** Must be careful when using S32(2)(a). If fulfil all of the above, there would be a
presumption that it is of acceptable quality. But even if one is not fulfil, for example
the product is not safe due to its own design and function, this does not straight
away mean that it is not of acceptable quality *** *** S32(2)(b) is similar to
acceptability test ***

S32(3) Where any defects in the goods have been specifically drawn to the
consumer's attention before he agrees to the supply, then, the goods shall not be
deemed to have failed to comply with the implied guarantee as to acceptable quality
by reason only of those defects.

S32(4) Where goods are displayed for sale or hire, the defects that are to be treated
as having been specifically drawn to the consumer's attention for the purposes of
subsection (3) shall be defects disclosed on a written notice displayed with the
goods. (Oral notice is insufficient)

S32(5) Goods shall not be deemed to have failed to comply with the implied
guarantee as to acceptable quality if the goods have been used in a manner or to an
extent which is inconsistent with the manner or extent of use that a reasonable
consumer would expect to obtain from the goods.

d) Section 33: creates an implied guarantee of fitness for a particular purpose

Almost similar with section 16(1)(a) SOGA. Section 33(1): it is an implied guarantee
that the goods are reasonably fit for the purpose that consumer makes known to the
supplier of the reason it is being acquired AND for the purpose that the supplier
represents them to be.

Section 33(2): However, these circumstances are not applicable when the consumer
does not rely on the supplier’s skill or judgement OR it is unreasonable for the
consumer to rely on the supplier’s skill or judgement. This shows that the element of
reliance is important for the application of this section. (For example, you are a
mechanic, and you want to buy a car, it is unreasonable for you to rely on a person
who is less experience than you in terms of cars)

Section 33(3): This section is applicable regardless if the purpose is a purpose as to

which the goods are commonly supplied. (Specific purpose is accepted, as long as it
is communicated to the supplier).

e) Section 34: Implied guarantee that goods comply with descriptions

Similar to section 15 SOGA.

Section 34(1): when the goods are supplied by description, there shall be an implied
guarantee that the goods will correspond with the description.

Section 34(2): A supply of goods is not prevented from being a supply by description
by reason only that, being exposed for sale or hire, they are selected by a consumer.
This means that regardless by how the goods are selected, as long as it is a sale by
description, this section shall be applicable.

Section 34(3): If the goods are supplied by reference to a sample or demonstration

model as well as by description, the implied guarantees in this section and section
35 shall apply.

f) Section 35: Implied guarantee that goods comply with sample

Similar with section 17 SOGA.

Provides an implied guarantee that the goods supplied to a consumer complies with
sample or demonstration model.

Section 35(1): the guarantee that will be applicable is that the goods correspond with
the sample AND that the consumer will have a reasonable opportunity to compare
the goods with the sample or demonstration model.

g) Section 36: Implied guarantee as to price.

Section 36(1): if the goods are supplied to a consumer, there shall be implied a
guarantee that the consumer does not have to pay the supplier more than the
reasonable price of the goods if the price is not

(a) determined by the contract; (Even if higher price is fixed in a contract, still this
does not apply)
(b) left to be determined in a manner agreed to by contract; or (Determined by third
party or market price) or

(c) left to be determined by the course of business between the parties.

*** Reasonable price is a question of fact. For example, price for 2nd hand goods is
different from new goods ***

Section 36(4): reasonable price is a question of fact and if it has been fixed under
any written law, the reasonable price shall be as specified under that law. (applicable
in ceiling or roof price)

Section 36(2): Failure to comply with this implied guarantee, the consumer’s only
right of redress shall be that he can refuse to pay more than what he should pay.
(Consumer can’t reject goods)

h) Section 37: Implied guarantee as to repairs and spare parts

Section 37(1): If the goods are imported or locally made and are supplied to a
consumer, there shall be implied a guarantee that the manufacturers and suppliers
take reasonable action to ensure that facilities for the repair of the goods and the
supply of spare parts for the goods available for a reasonable period within a
reasonable time after the goods are so supplied. (For imported goods must have
approve permit to sell in Malaysia, and therefore shall have spare parts for consumer
in Malaysia)

Section 37(2): This implied guarantee does not apply if reasonable action had been
taken to inform consumers, on or before the time the goods imported or locally
supplied, that the manufacturer or supplier, or both does not undertake that repair
facilities and spare parts will be available for the goods.

Section 37(3): If reasonable action had been taken to inform consumers, on or

before the time the goods supplied, that the manufacturer or supplier, or both does
not undertake that repair facilities and spare parts will be available for the goods
after a certain period of time, then the implied guarantee will not apply in relation to
goods imported or locally made after the expiration of that period.
Example: When you buy an imported car from Japan, the supplier must ensure that
that facilities for the repair of the car and the supply of spare parts are available until
the end of reasonable time (10 or 15 years).

(for example car can be driven for 30 years, but reasonable expiration time would be
10-15 years, so spare parts available will also be 10-15 years)

i) Section 38: 8 Express guarantee by manufacturer of the goods supplied to a

consumer.

Relates to matters connected to an express guarantee given by the manufacturer of

the goods supplied to a consumer. The express guarantee shall be binding upon the
manufacturer as specified in section 38(2), (3) and (4).

Example: A buys detergent and the manufacturer provided a guarantee that it will
remove stains on the box. Then, the manufacturer is bound by the guarantee unless
it has other evidence like the supplier faked the statements etc.

The express guarantee should not be given by the seller, must be given by
manufacturer. Example: Car manufacturer Proton gives 5 years warranty through
warranty card. Manufacturer need to prove otherwise if it is not what he intended.
CPA no need to base on contract, but SOGA based on contract. Therefore, under
SOGA, buyer can only sue seller because contract is between buyer and seller,
except you buy directly from manufacturer; whereas under CPA, consumer can sue
manufacturer even though consumer didn’t enter into contract with manufacturer.

3. The rights of consumers against suppliers and manufacturers in respect of

guarantees in the supply of goods

Section 40: Exception in respect of implied guarantee as to acceptable quality. No

right of redress against the supplier in respect of the failure of the goods to comply
with the implied guarantee as to acceptable quality where:

a. The manufacturer makes a representation in respect of the goods different from

the statement on the packaging or label

b. The goods would have complied with the implied guarantee as to acceptable
quality if that representation had not been made.
a) Consumer can ask the supplier to remedy the defect within a reasonable
time as according to section 42.

Section 42: A supplier may satisfy the requirement under section 41 to remedy the
defect by:

a. Repairing the goods (if failure does not relate to title)

b. Curing any defects (if failure relates to title)

c. Replace the goods with the similar goods

d. Providing a refund (when it cannot be repaired or replaced or cured)

b) If the failure cannot be remedied or that it is a failure of substantial

character (section 44), then consumer can, depending on section 43, reject the
goods as according to section 45 OR gain compensation from the supplier for
any reduction of value of the goods if compared with the price paid by the
consumer during the supplying of goods.

Section 44: failure to comply with a guarantee is of substantial character when

a. A reasonable consumer would not have acquired the goods

b. Goods are not the same (significantly) with the description, sample or
demonstration model

c. Goods are substantially unfit and cannot be remedied within a reasonable time.
Goods are unsafe

c) Section 45 manners of rejecting goods

Under SOGA, manner of rejecting goods is to rescind contract.

Section 45(1): Goods can be rejected by notifying the supplier of the decision to
reject the goods and the ground for rejection.

Section 45(2): Goods cannot be returned if:

a. The goods cannot be returned or removed without causing a significant cost. In

such case, the supplier shall collect it himself. (S45(2) of CPA, to reject goods a
person must return goods to supplier unless the return cost is too big, then the
supplier shall collect the goods at its own expenses)
b. Due to its method of attachment (where if removed, can cause significant
damage), the supplier need to compensate the consumer for any loss or damage
resulting from the such removal

c. Goods have already been returned to or retrieved by supplier.

Section 45(3): Upon rejection, the ownership returns back to the supplier. (S45(3)
Where the ownership in the goods has passed to the consumer before the consumer
exercises the right of rejection, the ownership in the goods re-vests in the supplier
upon notification of rejection. (This section is important as it relates to bearing of risk.
CPA mentioned nothing about risk, so to determine who bear the risk, refer to S26 of
SOGA. Under S45(3), once notification of rejection is given, ownership re-vest in
supplier, so if supplier collect the goods late and anything happen in between,
supplier is responsible for the risk, although goods is in the hand of consumer)

d) Section 46: Consumer's option of refund or replacement

Section 46(1): -Where the consumer exercises the right to reject goods conferred
under this Act, the consumer may choose to have:

(a) a refund of any money paid or other consideration provided by the consumer in
respect of the rejected goods; or

(b) goods of the same type and of similar value to replace the rejected goods where
such goods are reasonably available to the supplier as part of the stock of the
supplier, and the supplier shall make provision accordingly

Section 46(3): The obligation to refund cannot be satisfied by permitting the

consumer to acquire other goods from the supplier.

e) Section 43: Loss of rights to reject goods

Section 43(1): Right is lost when

i. Not exercised within a reasonable time. The right is not exercised within a
reasonable time (S43(2) provides definition of “reasonable time”; Under SOGA, it is
not provided clearly, it is a question of facts) *** Call supplier to request for return,
but only return after a month shows that consumer has no intention to return within
reasonable time ***
ii. Goods have been disposed by consumer (Eaten or half eaten, can only claim for
compensation)

iii. Goods lost or destroyed while in the possession of a person other than the
supplier

iv. Goods were damaged after delivery due to reasons nothing to do with the
condition (Goods is okay at first, only have problem after delivery, so consumer can’t
blame supplier for this because it is not caused by supplier)

v. The goods have been attached and cannot be isolated (the goods have been
attached to or incorporated in any real or personal property and the goods cannot be
detached or isolated without damaging them. *** When falls under this provision,
only mean that you can’t reject goods, doesn’t mean you don’t have any right against
supplier, you can still claim compensation *** - Similar to S42 of SOGA: Acceptance

f) Section 41(2): In addition to the remedies under subsection (1)

The consumer may obtain from the supplier damages for any loss or damage
suffered by the consumer, other than loss or damage through a reduction in the
value of the goods, which is proved to be a result or consequence of the failure.
(Example: Food poisoning or car accident which resulted in medical expenses, so
even you compensate for the goods provided still unable to cover losses suffered by
consumer) This provision is similar to S74 of Contracts Act 1950. So the illustration
for S74 Contracts Act can be used to illustrate position under CPA, to determine the
damage covered, to see which damage is too remote (also case of Hadley
Baxendale)

4. Consumer can obtain a right of redress against a manufacturer

Section 50: this part gives a consumer a right of redress against a manufacturer of
goods where the goods fail to comply.

a. Goods fail to comply with the implied guarantee as to acceptable quality under
section 32.

b. Goods fail to comply with the implied guarantee under description via section 34.
(description by manufacturer, not by supplier)
c. Goods fail to comply with the implied guarantee under repairs and spare parts via
section 37

d. express guarantee given by the manufacturer that is binding on the manufacturer

in accordance with section 38

Section 51: Exceptions to right of redress against manufacturers

No right of redress against the manufacturer under this Act in respect of goods which
fail to comply with the implied guarantee under section 32 or 34 where 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.

*** Consumer has to prove that the goods is defect when it is manufactured ***

Section 52: Options against manufacturers where goods do not comply with
guarantees

Section 52(1): Consumer may obtain damages from the manufacturer

a. For the reduction in the value of goods resulting from the manufacturer’s failure

b. For any loss or damage to the consumer resulting from the manufacturer’s failure.

Section 52(2): When the consumer can ask the manufacturer to repair or replace the
goods, he cannot claim for damages unless the manufacturer refused to do so or
that the remedying effort failed.