Saturday, September 26, 2009

applicability of the existing law to e-commerce:Sales of Goods Act 1957

One more relating Act to the electronic commerce transaction is the Sales of Goods Act 1957. This act generally governs matters regarding contracts in selling and buying goods in Malaysia. Consumers may always rely on this act if they are not satisfied with things they have bought. They can take actions against other party by referring either to the tribunal or to the court itself.

Although that, online transactions between consumers or ecommerce has not yet been established in Malaysia when the act was enacted. So, this act only governs conventional transactions. So, the issue here is:does this act also governs online transactions or ecommerce?
But, principles of law that can be used here is as long as this Act does not overtly prohibit the usage to an activity, thus it can be used. Based on this argument, obviously e-commerce is also protected under this Act.

Furthermore, this Act only protect “goods” like those which had been defined by this Act. The issue here is either “goods” in internet transactions or ecommerce can also be defined the same as “goods” which had been defined by this Act. Section 2 of Sales of Goods Act 1957 defined goods as, “every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”. Goods as had been defined by this Act is mainly about movable and more to physical things except those pronounced clearly in the said section. Although that, most of the goods sold in online transactions are usually the same goods which were sold in conventional transactions. Hence, it can be stated that this Act is also applicable for consumers in online transactions.

However, there is also items which does not exist when the Act was enacted for example computer software or music/songs over the Internet. So, does that kind of items for example purchasing songs by downloading them can be considered as “goods”as mention in Section 2 of this Act? It has not been decided in Malaysia in this kind of situation and the law is still silent about it. But, in United Kingdom, the court had decide that software cannot be considered as goods and it is merely an information. However in United States, court decided that software is not just an information but if it is recorded into physical form such as tape, diskette or compact disc, thus it should be viewed as goods. But, how if the songs was downloaded and does not used any other medium such as tape, diskette or compact disc, can it still be considered as “goods” under the definition of the Act?

As a conclusion, it can be said that this Act still has loopholes and need to be reviewed as it does not cover all kinds of transactions in Malaysia especially on online transactions or ecommerce.

You can also refer to the Sales of Goods Act 1957:on the side bar (bahasa melayu) and here (english version).

Monday, September 7, 2009

applicability of the existing law to e-commerc: Trade Description Act 1972

Issue that has arose since the electronic commerce first introduce is does our law fully protect the consumer in the e-commerce transaction like how the law protect them in other method of business?

Government of Malaysia has enacted few act in order to protect the consumer in business transaction in Malaysia. The laws are

• Trade Description Act 1972
• Copyright Act 1987
• Consumer Protection Act 1999
and some others.

In this entry, we will be focusing on the first part which is to what extend does the Trade Description Act applicable in transaction made in electronic commerce.

The Trade Description Act was enacted to protect the buyers or consumers in business transaction. This act gives protection as to trade practices or unhealthy business for example prohibition to use false description on products, prices and services. Other than that, the act also gives power to the minister to acquire information needed before the product distributed. There were also provisions on offences and penalty offender will faces and also powers relating to the offences.

Prohibition of false description on products, prices and services for example false advertisement or having the element to deceive on the business transaction. As commonly known, advertisement is an important element in any form of business. In electronic commerce, advertisements play role to promote products or services provided to attract users to certain websites.

Advertisement that advertised must follow the guideline laid under this Act. According to this Act, the advertisement must not confuse the customer and the products on sale must be in line with the descriptions on its labeling or brochure or any document relating to it or comes with it in the promotion. The same rule also applies in the transaction by electronic transaction.
By virtue of section 2 of the Act, advertisement is included any advertisement in form of written form, sound, picture, film or in any other way for the purpose of price listing, circular and any other.

Question arise here is that, there is no word ‘internet’ mentioned in this provision. Does it mean that advertisement in e-commerce transaction is also included under this definition of advertisement?

The solution to this problem is, the court must interpret this widely when dealings with cases involving electronic commerce. For example, the word ‘internet does not mentioned in this provision but does it mean that all the advertisement in the internet is not an advertisement?

Therefore even though the term internet does not specifically mentioned in the provision, we could assume it to be included under the term ‘any other way’ and also refers to commercial transaction via internet. Therefore, we can conclude that this Act is applicable to the electronic commerce transaction or e-commerce.

On our next discussion, we will be discussing on other relating Act to the electronic commerce transaction.

readers may refer to the Malaysian Trade Description Act 1972 [click here]

Sunday, September 6, 2009

Scope of e-commerce

Scope of E-Commerce to be Extended

Thursday, 12 October 2000 00:00

Source: New Straits Times (page 10)

Kuala Lumpur, Wed - The Department of Survey and Mapping Malaysia will extend the scope of its electronic commerce to include the use of e-wallets and credit cards, said Land and Co-operative Development Minister Tan Sri Kasitah Gaddam today.

To be launched by Prime Minister Datuk Seri Dr Mahathir Mohamad on Oct 24, the move would allow licensed surveyors and land developers to purchase the department's survey data more conveniently.

Products such as digital cadastral survey data and certified plan images could be speedily provided to those involved in planning and implementing land development projects, Kasitah told reporters.

An exhibition will be held on other information technology projects by the Ministry's agencies.

Visitors will be able to witness the intricacies of marking and measuring the international borders of Malaysia with neighbours Thailand and Indonesia, he added.

Besides displaying a CD-ROM version of an interactive map, the exhibition will also feature, the technology used for accurate global positioning, computerised land registration and allocation of land to children of a deceased Muslim.

*This news article is mainly about government is trying to improve the development of e-commerce or online transactions in Malaysia especially in selling and purchasing land development projects.



Generally, e-commerce transactions covers six areas which is advertising, education, finance, professional fields, retail and tourism. These six areas shows positive growth in this online transactions. According to studies conducted, in 1998 total advertising revenue through the Internet has reached up to U.S. $ 1.3 billion and total assets managed by brokers traded in line had reached up to U.S. $ 420 billion.

In addition, e-commerce is also used in education system. Total amount on distance students has increased from 120 thousand students in 1997 to 710 thousand in 1998 and this number is expected to increase to 2.2 million students by the year 2000.

Moreover, this online transactions were also used in professional fields such as in medical treatment such as in the use of telemedicine. Telemedicine had change a new dimension on modern medicine. With the help of telemedicine, surgery can be done from far away. Medical experts who are in other places can give instructions for an operation or surgery to be done.

The use of telemedicine has increased 30 percent worldwide and more than 3 million people have received benefits from it since 1998. In Malaysia, two hospitals had been using the non-paper method, as all information regarding patients and their disease had been recorded in computer systems. It is easier for delivering any specimens through the net. With that, human life expectancy and also increased the quality of life. Therefore, e-commerce can be done successfully in this medical arena especially in telemedicine.

In tourism, the activity in selling and buying tickets through the Internet had increased from US $ 100 million in 1997 to US 3.1 billion in the year of 2002.

Saturday, September 5, 2009

The introduction: what is e-commerce?

Basically, e-commerce (electronic commerce) is the online transaction of business,where it features a link between computer systems of the vendor, host and buyer or in other words it also can be refer as the buying and selling of goods and services on the Internet.

A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.(Emmanuel Lallana, Rudy Quimbo, Zorayda RuthAndam, ePrimer: An Introduction to eCommerce (Philippines: DAI-AGILE, 2000), 2.)

There are different types of e0commerce. The major types of e-commerce are business-to-business (B2B); business-to-consumer (B2C); and consumer-to-consumer (C2C).

B2B e-commerce is defined as e-commerce between the companies. this type of e-commerce deals with relationships between and among businesses. Most B2B applications are in the areas of supplier management (especially purchase order processing), inventory management (managing order-ship-bill cycles), distribution management (especially in the transmission of shipping documents), channel management (information dissemination on changes in operational conditions), and payment management (electronic payment systems or EPS).(Kalakota and Whinston, 18-19)

B2C e-commerce is commerce between companies and consumers. For example purchasing goods such as consumer products or information goods like software. These are the common applications of B2C commerce which pertains to the management of personal investments and finances with the use of online banking tools.

Another type of e-commerce is C2C e-commerce (consumer to consumer). It is a kind of commerce between private individuals or consumers. eBay is a most popular example of C2C e-commerce. it allows online bidding on items being sold in the web.

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