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).