Commercial & Business Advisory-UAT – GLT Law

GENERAL LAW TRANSFORMED

Running a business isn’t always as straightfoward as many would have you believe, there are many instances when laws and regulations can be overcomplicated to the point of being overwhelming.

At GLT Law, we guide you through the tangled web of employment law, franchising, intellectual property and contracts as well as obtaining specific government licenses.

OUR KEY AREAS OF PRACTICE INCLUDE:

Commercial contract drafting and negotiation
Foreign investment
Franchising, licensing, advertising, marketing and sponsorship
Labour and employment contract
Joint venture agreements
Tenancy and leases
Service level arrangements
Workplace health and safety
Employee handbook and HR policy
Contracts for independent contractors and freelancers
FinTech, crowdfunding, P2P lending
Regulatory compliance (anti-corruption, anti-money laundering, personal data protection, insider trading, whistle-blowing)
Licensing and regulatory approvals
Consumer protection
Product liability
Government incentives (MSC status, MDEC, MaGiC, Cradle)

OUR KEY AREAS OF PRACTICE INCLUDE:

Commercial contract drafting and negotiation
Foreign investment
Franchising, licensing, advertising, marketing and sponsorship
Labour and employment contract
Joint venture agreements
Tenancy and leases
Service level arrangements
Workplace health and safety
Employee handbook and HR policy
Contracts for independent contractors and freelancers
FinTech, crowdfunding, P2P lending
Regulatory compliance (anti-corruption, anti-money laundering, personal data protection, insider trading, whistle-blowing)
Licensing and regulatory approvals
Consumer protection
Product liability
Government incentives (MSC status, MDEC, MaGiC, Cradle)

FREQUENTLY ASKED QUESTIONS

Should a commercial contract be in writing?

While an oral contract is valid and legally enforceable (provided you can find witness to prove such), we highly encourage you to put commercial contracts in writing. A written contract allows each party the opportunity to fully understand his or her obligations and rights under the contract. In the event of a law suit, the court will just have to interpret and analyse wording used in a written contract, as opposed to rely on oral testimonials from both parties to find out the real intention and truth of their contractual arrangement.

What is a breach of contract?

As a purchaser, you would need to consider the residual liabilities that you would be taking with you upon completion of the sale and purchase transaction. This may be ascertained by way of undertaking a due diligence exercise on the target’s business. Due diligence is an investigation or audit exercise carried out by your advisors (legal, tax, financial etc) on the target company. Due diligence on the target company would cover the following areas, namely, corporate information, financial position, contracts, properties, regulatory compliance, intellectual property, insurance, litigation as well as employment. Further to the above, it advisable that you should appoint a lawyer to negotiate your share purchase agreement/ asset purchase agreement/ business purchase agreement. A well negotiated share purchase agreement/ asset purchase agreement/ business purchase agreement should include a set of warranties and indemnities to protect your interests and rights (as a seller) and to minimise your liabilities and risks (as a purchaser).

What remedies can I get in the event of a breach?

Date of commencement
Details of each party (full names, addresses, entity numbers)
Definitions and interpretation
Background leading to the contract
Conditions precedent (if applicable)
Performance and payment obligations
Limitations and exclusions
Termination
Confidentiality
Intellectual property
Boilerplate standard clauses
Execution

What are “unfair terms” in a contract?

In Malaysia, the law recognises the concept of “freedom to contract” so long as the terms are not illegal or against public policy or law. Malaysia does not have a general unfair contract terms law. That said, for consumer contracts, the Consumer Protection Act 1999 states that if a contract contains terms that are harsh, oppressive, unconscionable, limit liability for own mistakes or negligence or breach of contract, such terms will be considered “unfair terms” and will be unenforceable under the law. Also, if a seller sells goods that are different from their description, or unfit goods, buyer has the right to return the goods and cancel the contract. Other than this, we also have the Competition Act and Price Control and Anti-Profiteering Act to protect consumers from unfair business practices.

Can I still amend a contract after it is signed and stamped?

Yes, it is still possible to amend or update a contract after it is signed and stamped, provided both parties agree to such amendment or update. You will usually find a variation/ amendment clause in the contract that provides this option. The process usually involves both parties agreeing to sign a supplementary agreement to replace certain clauses in the original contract.

Under what circumstances can a contract be terminated?

There are mainly two types of termination grounds, namely, termination with cause and termination without cause. Termination with cause means that either party can terminate the contract when a specified event occurs. It is advisable to spell out the triggering events in the contract. Examples of such events include:

breach of contract (usually comes with an option that parties will allow a reasonable time to rectify/remedy the breach if it can be rectified/remedied)
non-payment
insolvency or bankruptcy
change of ownership or control of either party

Even if the contract does not give express right to terminate in a particular scenario, if one party breaches the contract substantially (known as “repudiatory breach”), the non-breaching party may be entitled to accept the repudiatory breach and terminate the contract and sue for damages against the breaching party. Termination without cause means that either party can terminate the contract by giving notice according to the notice period stated in the contract, even when there is no breach or default on either party.

What advice can I get from a lawyer on commercial contracts?

A competent lawyer will be able to advise you on:

1. the process of entering into commercial contracts

2. negotiating and drafting commercial contracts

3. interpreting clauses in the commercial contracts

4. reviewing commercial contracts to give an opinion on their impact

5. amending commercial contracts

6. terminating commercial contracts

7. resolving disputes about commercial contracts

Are all contracts standard and lawyers just cut and paste from their templates?

How we wish lawyering life can be so easy! If there are standard contracts, it means just that – standard, and they don’t reflect the individual circumstance of every commercial arrangement. There is a great temptation to just google a sample and use it without proper legal advice, which often results in the contract being vague, ambiguous and open to different interpretation. While lawyers sometimes do draft a contract based off a template, it serves as a base document and lawyers still need to spend a huge amount of time and efforts to edit, customise and draft out new clauses that cater to clients’ specific needs and arrangements. It is therefore incorrect to say we just “cut-and-paste”.