Signed a contract in Malaysia? Can you get out?

It`s that time of the year where everything that you signed up for in the new year no longer seems like a good idea. Like your new year resolution, that gym you signed up because new year new me, that water filter or that new phone contract you got. Some things happened where you end up unable to commit to these contracts. 

How do you get out of them? There are still complains surging online on how hard it is to quit any sort of memberships or contracts these days. 

When you quit them there will be penalties but are these penalties lawful? Is there any law to protect you from these penalties?

Here`s what you should know, 

1.  What are the common things to know about contracts? 

Their terms and conditions count as law for you and the respective party to abide by since you signed the contract. Contracts are bindings based on Contracts Act 1950 Section 10(1). As soon as you signed it, you are practically saying, “Yes!” to all the terms and conditions they gave to you. 

2.  If you can`t pay and have valid reasons you can try to appeal.

An appeal can be made via letters and depends on the company, merely by verbally informing them. It can be for complete cancellation of the contract or delaying payment (PTPTN lol or loan). 

Why do I have to do this? Cannot just let it be ah? 

Aside from that, they can consider to give you some reprieve during your tough time, your credit score or your name can be saved from being added to CCRIS. This includes getting blacklisted not only via travel but also from using whichever service that your payment has been delayed (Such as TM). It will also make it easier for you to apply for a loan. 

For example, you have a gym membership but unexpectedly meet with an accident that injured you and needed a long term physical recovery. You can send a letter to them to appeal, detailing why you can`t pay or no longer able to continue using their service. Other valid reasons, like job loss, are also acceptable for you to appeal.

3.  Can you get out of a contract?

The answer is yes.

This is because in the end, every contract must have a termination clause to protect both parties. Either by Termination of Cause, where one of the parties contracted failed to perform what they agreed to. If its between companies then it can be from both sides, with penalties involved but the one in daily life and the most common is between a company and its consumer. For common folks, the example would be a false advertisement. You are advertised that a new burger is available, you go for a burger but then you were given a hot dog under what was advertised instead. 
 

Another type of termination clauses is called Termination of Convenience where either party or one party can terminate the contract by sending sufficient notice based on the contract. This will depend on the conditions listed. You might have to send the letter a month or sometimes a few months before your next payment date, or pay past a certain period to terminate a contract. 

To explain it, its that you cannot have an unfair contract and bind to it. Even with contracts that carters for Business to People, they are contracts that you cannot negotiate because the conditions laid out. However, there might be exceptions between businesses (A term called unfair bargaining power, first established in the UK)

Another way to come out of any contract is if they did something that is against their terms and services, causing the contract to be void or voidable (Might be void but not yet determined). Hence why it's not only important that you can read a contract but also to understand it. 

What else cover for a contract to be completely canceled? Usually by what we would call as ‘Force Majeure’ It`s the unforeseeable circumstances that prevent someone from fulfilling a contract. Usually an act of God such as natural disaster or accidents (Debatable) 

Take Cuckoo water filter, for example, one of their employees explained that if you have an outstanding of more than 4 months and did not inform them of your reason for not paying, your account will be blacklisted and they will send your name to CCRIS. 

But what if you signed up for a phone package with a telco service?

Digi for example, any variations in the fees, penalties may vary based on your selected package and it will be stated in the contract. Any failure to be on time on your payment, your number will be barred, even if you are late just for a month. If you can`t make a payment for 3 months? Your line will either suspended or terminated depending on the system, and you will be a blacklist of course. If you try to switch to another telco, you will have to settle your outstanding bill with them first. You can`t send them a letter like other services that your payment will be late because they operate by a computer system. But, there are things that can help if you wish to unbar your line, you just have to at least pay half of what you owe them plus a penalty charge.  

So, the lesson is always to read carefully and make sure you are ready to commit before you signed up any contract.