Data of Malaysians born between 1940 and 2004 allegedly being sold for over RM40,000

I was asked by The Star to comment on the recent news about an alleged data leak containing the information of 22.5 million Malaysians born between 1940 and 2004, purportedly stolen from the National Registration Department (NRD).

I said-

Lawyer Foong Cheng Leong said the lack of transparency on investigations related to data leaks in Malaysia has been frustrating.

“There needs to be an account of how the matter is being investigated and what steps are being taken to ensure that the data is secure.

“The information could serve as a deterrent to others and show that there will be consequences for those leaking private information,” he said in a phone interview.

Foong urged fresh investigations to be conducted by the relevant agencies, including the Department of Personal Data Protection (JPDP) to discover if the leak was genuine.

When contacted, JPDP declined to comment at this point.

Foong said the data from the alleged leak could be used by scammers to dupe victims.

“For example, they could pose as an authority figure and present information such as your MyKad number or address to gain your trust.

“They will use this to convince you to give out more details or perform financial transactions,” he said.

Government Says Not Liable For Damages Over MySejahtera Data Use

I was asked by CodeBlue, a health care news portal, to comment on the recent debacle about MySejahtera App, particularly, on the disclaimer of MySejahtera’s terms and conditions. The term states-

DISCLAIMER
Government of Malaysia shall not be liable for any loss or damage caused by the usage of any information obtained from this Application.

https://mysejahtera.malaysia.gov.my/penafian_en/

Here is an extract from the article-

Intellectual property (IP) and information technology (IT) lawyer Foong Cheng Leong said the MySejahtera disclaimer does not allow the government to disclaim liability for negligence.

“This clause has no legal effect for damages and losses due to negligence claims,” Foong told CodeBlue. “Data breach is a form of negligence.”

He explained that the MySejahtera disclaimer means that the government cannot be held liable for loss or damages in incidents that do not involve negligence, such as wrongly reporting Covid-19 cases.

When asked if the government could be held liable, despite its disclaimer, if a private company somehow manages to get access to MySejahtera users’ personal data and uses it for marketing purposes, Foong replied in the affirmative, but said a data breach must first be proven.

He also pointed out that MySejahtera’s privacy policy merely states how the government treats one’s personal data on the app, but omits specifying its data retention policy, security measures, or government contractors handling the app. The only retention period mentioned by the app’s privacy policy relates to check-in data, which is 90 days, but nothing for other user data like personal details and medical and health information like Covid-19 diagnostics, close contact status, and blood pressure and heart rate readings.

“The privacy policy is scarcely explained.”

….

Foong said although the government may claim that MySejahtera data protection is in compliance with PDPA requirements (which the government is not legally subject to), the lawyer said the law just sets out the basics.

“Under the PDPA, the privacy policy has to be in a certain format, for example, describe what is collected, the purposes of collection, whether it’s obligatory to collect and if so, consequences for not providing those obligatory data. But no requirement to state what kind of security is provided, what is the retention time etc.”

In the intellectual property section of the App Store review guidelines for app developers, Apple requires app developers to ensure that their app “only includes content that you created or that you have a licence to use.”

This includes avoiding use of protected “third-party material such as trademarks, copyrighted works, or patented ideas” in the app. “Apps should be submitted by the person or legal entity that owns or has licensed the intellectual property and other relevant rights.”

Foong said this does not indicate that the Malaysian government, which is described on Apple’s App Store as the MySejahtera developer, owns the app and its IP.

“The app and content are different,” the lawyer said, adding that MySejahtera content includes things like user data, images, write-ups, charts, or source codes of the app.

BFM Podcast: THE MYSEJAHTERA APP: WHO OWNS WHAT?



The MySejahtera saga continues with uncertainty over the ownership of the app. Foong Cheng Leong, Intellectual property and information technology lawyer helps us untangle this complex web, reminding us of the importance of contracts.

Produced by: Moh Heng Ying
Presented by: Wong Shou Ning, Tan Chen Li, Philip See

Enforceability of Hyperlinked Electronic Contracts in Malaysia

I am happy to share this article I co-authored with my former interns Mira Marie Wong and Nur Faiqah Nadhra Mohamad Faithal. This article was initially published as one of my Bread & Kaya articles on Digital News Asia. I have updated it for it to be published by Thomson Reuters in their The Law Review 2021.

Singapore’s First Action against Unknown Persons on Cyberspace

I am happy to announce that my book “Foong’s Malaysia Cyber, Electronic Evidence and Information Technology Law” was recently featured in the Singapore High Court case of CLM v CLN and others [2022] SGHC 46.

The case had referred to our High Court case of Zschimmer & Schwarz GmbH & Co KG Chemische Fabriken v Persons Unknown & Anor which had quoted my commentary in para [8.098] to [8.100] of my book (reproduced below) regarding actions against persons unknown.

CLM v CLN and others [2022] SGHC 46

The Singapore High Court dealt with two (2) interesting and novel points of law.

First, can stolen cryptocurrency assets be the subject of a proprietary injunction?

Second, does the court have jurisdiction to grant interim orders against persons whose identities are presently unknown?

Brief Facts

The plaintiff had commenced an action to trace and recover 109.83 Bitcoin (“BTC”) and 1497.54 Ethereum (“ETH”) (collectively, the “Stolen Cryptocurrency Assets”) that were allegedly misappropriated from him by unidentified persons (ie, the first defendants), a portion of which has been traced to digital wallets that were controlled by cryptocurrency exchanges with operations in Singapore (ie, the second and third defendants).

The Court granted the plaintiff an ex parte proprietary injunction against the first defendant from, among others, dealing with the Stolen Cryptocurrency Assets, and a worldwide freezing injunction.

Action against persons unknown

The Singapore High Court held that there is nothing in their Rules of Court (Cap 322, R5, 2014 Rev Ed) (“ROC”) that requires a defendant to be specifically named. O 2 r 1 of the ROC expressly provides that even if the commencement of proceedings against persons unknown contravenes the ROC, such a contravention is treated as a mere irregularity, and will not result in the nullification of proceedings unless the court exercises its discretion to order the same.

Like how our Court had relied on O. 89 of the Malaysian Rules of Court 2012, the Singapore High Court held that O. 81 of the ROC allows for a reference to persons unknown in summary proceedings for possession of land.

Hence, the Court held that it has the jurisdiction to grant interim orders against the first defendants, who are persons unknown.

Further, the Singapore High Court held that the description of the first defendant must be sufficiently certain as to identify both those who are included and those who are not. In the present case, the plaintiff has sufficiently defined the first defendant as “any person or entity who carried out, participated in or assisted in the theft of the Plaintiff’s Cryptocurrency Assets on or around 8 January 2021, save for the provision of cryptocurrency hosting or trading facilities“.

Stolen cryptocurrency assets as subject matter of a proprietary injunction

The Singapore High Court held that there is a serious arguable case that the plaintiff has a proprietary interest. Cryptocurrencies are a form of property. The Court adopted the test from the English case of National Provincial Bank Ltd v Ainsworth [1965] AC 1175, which defined the term property rights, and held that-

  1. The first requirement is that the right must be “definable” – the asset must hence be capable of being isolated from other assets whether of the same type or of other types and thereby identified. To this end, cryptocurrencies are computer-readable strings of characters which are recorded on networks of computers established for the purpose of recording those strings, and are sufficiently distinct to be capable of then being allocated to an account holder on that particular network.
  2. The second requirement is that the right must be “identifiable by third parties”, which requires that the asset must have an owner being capable of being recognised as such by third parties. An important indicator is whether the owner has the power to exclude others from using or benefiting from the asset. In this vein, excludability is achieved in respect of cryptocurrencies by the computer software allocating the owner with a private key, which is required to record a transfer of the cryptocurrency from one account to another.
  3. The third requirement is that the right must be “capable of assumption by third parties”, which in turn involves two aspects: that third parties must respect the rights of the owner in that asset, and that the asset must be potentially desirable. The fact that these two aspects are met by cryptocurrencies, is evidenced by the fact that many cryptocurrencies, certainly BTC and ETH, are the subject of active trading markets.
  4. The fourth requirement is that the right and in turn, the asset, must have “some degree of permanence or stability”, although this is a low threshold since a “ticket to a football match which can have a very short life yet unquestionably it is regarded as property”. In this respect, the blockchain methodology which cryptocurrency systems deploy provides stability to cryptocurrencies, and a particular cryptocurrency token stays fully recognised, in existence and stable unless and until it is spent through the use of the private key, which may never happen.

The Singapore High Court held that the balance of convenience lay in favour of granting the proprietary injunction. If it were not granted, there would be a real risk that the first defendants would dissipate the Stolen Cryptocurrency Assets, which would prevent the plaintiff from recovering those assets even if he successfully obtained a judgment in his favour. Conversely, even if the plaintiff’s case were later refuted, the first defendants would only suffer losses arising from their inability to deal with the Stolen Cryptocurrency Assets, which could be compensated by way of damages.

Worldwide freezing injunction

The Singapore High Court also granted the worldwide freezing injunction to restrain the first defendants from dealing with, disposing of, or diminishing the value of, their assets up to the value of the Stolen Cryptocurrency Assets.

The learned Judge was of the view that the first defendants dissipated the stolen assets through a series of digital wallets that appear to have been created solely for the purpose of frustrating the plaintiff’s tracing and recovery efforts, and which had either no or negligible transactions other than the deposit and withdrawal of the Stolen Cryptocurrency Assets.

Moreover, the risk of dissipation in the present case is heightened by the nature of the cryptocurrency: the Stolen Cryptocurrency Assets are susceptible to being transferred by the click of a button, through digital wallets that may be completely anonymous and untraceable to the owner, and can be easily dissipated and hidden in cyberspace.

Ancillary disclosure orders

Ancillary disclosure orders were also made against the second and third defendants to disclose to the plaintiff the current balances of the second and third defendants’ accounts that were credited with BTC and ETC that are traceable to the Stolen Cryptocurrency Assets, and information and documents collected by the second and third defendants in relation to the owners of the relevant accounts in the second and third defendants and details of all transactions involving the relevant accounts in the second and third defendants from the dates on which the stolen assets were credited against the accounts.

Does Malaysia have laws to nix ‘offensive’ brand names or ones that cause ‘public anxiety’? Lawyers explain

I was asked by The Malay Mail to give my thoughts on the issue of the word TIMAH by a local whisky brand. The Government has asked the brand owner to consider to change its brand name in view of the alleged public outcry over the use of a Malay word for an alcoholic product. I said-

How companies could navigate the use of brand names

Foong Cheng Leong, who is also a co-chair of the Bar Council’s Intellectual Property Committee, told Malay Mail: “Businesses in Malaysia are generally free to use whatever brand name they want on their goods and services so long that, among others, it is not a brand name of another person or a confusingly or deceptively similar one, or a false trade description.

“For certain industries, prior approval is required from local government/agencies. For example, a name of a property development would need approval from the local council,” he said, adding that he is not aware of any name approval requirement for alcoholic products.

Foong also noted that a trademark could still be used even if it is not registered, noting that the registration of a brand name with MyIPO “is merely a process to protect the mark from being infringed by a third party”.

“MyIPO has the right to object to the registration of a mark that is offensive or scandalous, or against morality, among others. However, the non-registration of a trademark does not prohibit the use of a trademark. The effect is only that they do not get protection under the Trademarks Act 2019,” he said.

“When it comes to using a name that could cause fear or alarm to the public or against public tranquility, Section 505(b) of the Penal Code may be relevant. However, I am not aware of this section being used against anyone using a brand name that has caused public anxiety.

“A use of a brand name is a commercial decision. One would use a name that would attract customers and certainly not a name to cause public anxiety,” he added.

Section 505(b) covers the crime of making, publishing, circulating any statement, rumour or report with intention to cause or which is likely to cause fear or alarm to the public or to any section of the public where any person may be induced to commit an offence against the state, or with such statements being against public tranquility.

When asked if companies should avoid using the Malay language altogether for brand names to avoid possibly causing public anxiety in Malaysia (including in the context of race and religion), Foong replied: “There is no issue in the use of Malay words as a brand name. Many Malaysians are proud to use Malay words as their brand name to show that their goods and services are from Malaysia.”

“However, the Timah case has shown us that there is a limitation to such use. It seems to me that it is not so much on Muslims being confused but rather the use of Malay words on products prohibited by religion e.g. alcoholic products. I do not think that there is an express prohibition by law on this.

“But historically, there had always been a prohibition on use of religious words or words which connotes religious meaning on all forms of publication.

“Nevertheless, I think brands would now need to rethink their strategy, especially when using local names on products which are prohibited for consumption by religion or custom,” he said.

BFM Podcast: SONG CATALOGUES UP FOR SALE



Once upon a time, it was considered totally unacceptable for musicians to even consider selling their song catalogues, but now, we see a trend of musicians, especially the senior ones, doing so. Some have cited estate planning as one of the reasons for doing this, but surely, these songs have value too and can be kept and passed on to their family members? Lawyer Foong Cheng Leong joins us on the show to share his take on this trend.

Produced by: Daryl Ong, Haniff Baharudin
Presented by: Daryl Ong, Haniff Baharudin

Bread & Kaya: Practical tips to ensure your electronic contracts are enforceable

By Foong Cheng Leong and Mira Marie Wong and Nur Faiqah Nadhra

– Court decisions on thorny issues of hyperlinked agreements’ enforceability
– Heavy price to pay for not reading online terms of any commercial agreement
– 8 practical tips to ensure that your electronic contracts are enforceable
– Tracking mechanism to track if counterparty accessed terms and condition

These days, many businesses no longer print or provide their entire contract to their customers or suppliers. It is relatively commonplace for businesses to point their contracting partners to the terms contained on a website, i.e. through a hyperlink.

We can see these in application forms, emails, and even in physical or electronic contracts. With the advent of the Covid-19 pandemic, it would be beneficial for businesses to adopt electronic contracts, particularly using hyperlinked contracts or terms, rather than physical contracts.

It creates convenience, not only are they great for easy drafting but it makes editing documents a breeze, it is an attempt to achieve a much more friendly and acceptable clientele experience within business.

However, there are certain issues to be looked at when adopting the use of hyperlinked contracts or terms. One of such situations would be where the contracting parties each have their own terms of engagement with reference to their own hyperlinked contracts or terms. Without a signed contract, this poses a dilemma which contract or terms would apply.

This article addresses the measures businesses may use to incorporate a hyperlink successfully and the current state of law in disputes involving contracts or terms incorporated by reference by way of a hyperlink. Therefore, we will look into the cases below to see how the courts deal with such a dilemma.

English Law Position

In tackling the enforceability of whether the electronics terms and conditions form part of the agreement, the English courts critically analyzed whether a party had taken reasonable steps to ensure that its terms and conditions had been brought to the attention of the other side. The two following courts had based their focus on the conspicuousness of the terms.

In Impala Warehousing v Wanxiang Resources [2015] EWHC 25, Impala issued a warehousing certificate in respect of Wanxiang’s goods pledged to a bank as security. The warehouse certificate was then endorsed to Wanxiang after the sum advance by the bank had been paid off. A dispute arose thereof and parties disagreed where the matter ought to be adjudicated. The back of the warehousing certificate contains a term stating that its latest version of its terms and conditions is posted on its official website. The website contains an agreement stating that, among others, the governing law of the matter is English law and the English court shall have exclusive jurisdiction to adjudicate the matter.

In deciding whether the English court has exclusive jurisdiction, the English High Court held that as a matter of English law where terms are incorporated it must be shown that the party seeking to rely on the conditions has done what is reasonably sufficient to give the other party notice of the conditions. The learned Judge found that the first page of the warehouse certificate contains a clause stating that all disputes shall be subject to Impala’s terms and conditions. At the base of the page the reader is invited to refer to the reverse of the page for additional conditions. On the reverse, the reader is referred to Impala’s website for its terms and conditions.

Thus, the holder of the warehouse certificate knows that the certificate is subject to Impala’s terms and conditions. The High Court held that these steps taken by Impala were reasonably sufficient to give the holder notice of condition. In this day and age when standard terms are frequently to be found on websites, the High Court considered that reference to the website is a sufficient incorporation of the warehousing terms to be found on the website.

Cockett Marine Oil DMCC v Ing Bank NV & Anor [2019] EWHC 1533, on the other hand, involves a challenge of two arbitration awards on the ground that the arbitral tribunal had no jurisdiction. The tribunal held that it had jurisdiction because the terms of the contract between the parties included a London arbitration clause. The claimants had agreed to purchase bunkers from the defendants in two separate transactions. The defendants, being the sellers, had earlier sent a mass email to their customers enclosing their terms and conditions which contained the London arbitration clause which provides for the jurisdiction of the arbitral tribunal in London in the event of a dispute. The parties had a dispute and the defendants brought the matter to arbitration.

In one of the two transactions, it was done through an exchange of email. The defendant sent a copy of its sales order confirmation which contained the particulars of the sale and purchase. The email also stated that “…The fixed terms and conditions are well known to you and remain in your possession. If this is not the case, the terms can be found under the web address [to the defendant’s terms and conditions]”.

The English High Court held that the defendants’ terms and conditions apply to the contract for the supply of bunkers and therefore the arbitral tribunal has jurisdiction. The High Court found that the claimants were aware of the defendants’ terms and conditions since the defendants had taken steps to inform their customers, including the claimants, regarding the defendants’ terms and conditions by way of the said mass email. In respect of the transaction involving the email exchange and sales confirmation order, the High Court further held that the claimant could access the defendants’ terms and conditions by clicking on the hyperlink in the sales order confirmation.

Malaysian Court’s position

Our Court’s approach in assessing whether the hyperlinked contract or terms is similar to the English court’s position. Essentially, there must be a clear and concise notice informing the reader that their hyperlinked contract or terms apply. Therefore, parties who wish their hyperlinked contract or terms to be incorporated must ensure that they provide an avenue for the user to read the terms of the agreement. Simply inserting a hyperlink to the terms and conditions may not be effective in making them form part of the overall contract. The following recent court decisions highlighted the thorny issues of hyperlinked agreements’ enforceability in businesses in whether or not it could be incorporated by reference.

In Able Food Sdn Bhd v Open Country Dairy Ltd [2021] 7 CLJ 716, the plaintiff, a Malaysian company, sued the defendant, a New Zealand company, for alleged breach of contract(s) in, among others, supplying instant whole milk powder of unmerchantable quality. The plaintiff demanded, among others, special damages and general damages for loss of profit and loss of market.

The defendant challenged the jurisdiction of the High Court in Malaysia to hear the dispute on the ground that the parties had submitted to the exclusive jurisdiction of the courts in New Zealand. In this regard, the parties had entered into seven (7) sales contracts. Each of the sales contracts (except for one) contains an endorsement with a hyperlink to its terms of trade (“Terms of Trade”) and it reads as follows: “http://opencountry.co.nz/termsoftrade

The Terms of Trade form part of this contract for sale and the parties agree to comply with the Terms of Trade in performing their obligation under this contract. Please be advised that OCD has modified its Terms of Trade please consult the attached terms.”`

The defendant argued that their “Terms of Trade” were incorporated by reference in each of the sales contracts wherein the parties had agreed that New Zealand law would apply and the parties are subject to the exclusive jurisdiction of the courts in New Zealand (hereinafter referred as the “choice of law and jurisdiction clauses”).

The High Court ([2021] 4 CLJ 614) held that the choice of law and jurisdiction clauses were not incorporated in the contracts because the Terms of Trade were not attached to the sales contracts, among others.

However, on appeal the Court of Appeal overturned the High Court’s decision and held that the choice of law and jurisdiction clause was, in fact, incorporated into the sales contracts.

In regard to whether the Terms of Trade were incorporated by reference, the Court reiterated the following basic principles of the law of contract:-

  1. To incorporate a binding term, reasonable notice must be given either before or at the time the contract was made (Olley v Marlborough Court Hotel [1949] 1 KB 532 CA).
  2. The terms incorporated should be located in a document where terms are expected to be printed (Chapelton v Barry Urban District Council [1940] 1 KB 532 CA).
  3. Whether or not the parties had read the terms, contractual documents signed by the parties would automatically be considered as binding (L’Estrange v F Graucob Ltd [1934] 2 KB 394).
  4. Reasonable steps must be taken by the party who inserted the term to bring it to the attention of the other party (Parker v South Eastern Railway Company [1877] 2 CPD 416).

The Court of Appeal found that the parties had a course of dealings. In all the sales contracts (issued by the defendant and duly accepted/signed by the plaintiff without any comment, modification, or qualification), it was clearly stated that the Terms of Trade formed part of the contract and that parties agreed to comply with the Terms of Trade in performing their obligations under the contracts. The endorsement in each of the sales contracts referred to a hyperlink, to wit, http://opencountry.co.nz/termsoftrade. The Terms of Trade could be found in the hyperlink. The plaintiff, for whatever reason, did not click on or look up the hyperlink. But that does not mean that the Terms of Trade, which are contained in the hyperlink, do not apply.

The Court of Appeal held that the burden was on the plaintiff to look up the Terms of Trade via the hyperlink. The failure on the plaintiff’s part to do so is akin to a contracting party not bothering to avail themselves of the terms, and to read and understand the same, with the benefit of legal advice or otherwise.

The plaintiff argued that the defendant was under a duty or obligation to furnish them with a copy of the Terms of Trade. The Court of Appeal was of the view that there was no such duty or obligation as the Terms of Trade were, as the defendant put it, just a “click away”.

The Court of Appeal found that notice of the Terms of Trade was given at the time when the contract was formed, and it was referred to in a document (Sales Contract) that one would reasonably expect to contain contractual terms. The express notice was given to the plaintiff that the Sales Contracts were subject to the Terms of Trade, which was accessible via a hyperlink provided. There was no ambiguity whatsoever as to where the Terms of Trade were located. Thus, the Court of Appeal was satisfied that the defendant had fulfilled the requirement of having taken reasonable steps to bring the Terms of Trade to the plaintiff’s attention and incorporating it in the Sales Contracts.

Additionally, during product purchase by the plaintiff, it is apparent that there is an exclusive jurisdiction clause. Therefore, the Malaysian Court is obliged to give effect to the exclusive jurisdiction clause unless the plaintiff, as the party sought to avoid the application of the clause, is able to establish that there are exceptional circumstances to justify the contrary. Since there was no convincing evidence to show that the plaintiff has an exceptional circumstance to exclude the express choice of jurisdiction, the most appropriate jurisdiction to hear the dispute would be in New Zealand.

The Court of Appeal further stated that although it would seem unfair in the plaintiff’s perspective to file the action in New Zealand, however, it is what they had agreed upon when they had signed the contract, and so if any inconvenience were to be faced by the plaintiff, it would merely amount to the consequences of their agreement.

In MISC Berhad v Cockett Marine Oil (Asia) Pte Ltd [2021] MLJU 563, the plaintiff had invited tenders for the supply of bunkers via email and in the email, the plaintiff had attached their proposal form and terms and conditions (“the Plaintiff’s Terms”).

In the body of the said email under the heading “Important Note”, the plaintiff set out terms and conditions of the purchase attached to the email. The Plaintiff’s Terms stated that the provisions of the agreement shall be subject to, construed, and interpreted in accordance with the laws of Malaysia, and the parties hereto submit to the exclusive jurisdiction of Malaysian courts.

In addition, the Plaintiff’s Terms stated that the Plaintiff’s Terms constitute the entire agreement between the parties and no modification would be effective unless in writing and signed by both parties.

After a series of emails were exchanged between the parties, the tender was awarded to the defendant. The plaintiff contended that the contract was concluded on the Plaintiff’s Terms when the parties agreed on the price. The defendant, on the other hand, contended that the contract was made on its terms as the defendant’s emails carries a hyperlink to the defendant’s website containing the Fuel Supply Terms & Conditions (“the Defendant’s Terms”) at its footer.

The parties made the necessary arrangements to perform the contract to supply bunkers to the plaintiff by the defendant (“Supply Contract”). The supply went into trouble when the bunkers were detained by the Malaysian Maritime Enforcement Agency for potential offences. The plaintiff then terminated the Supply Contract on the grounds that the defendant was in breach of its obligation to deliver the bunkers free of claims and encumbrances.

After the bunkers were released by the Malaysian Maritime Enforcement Agency, the parties’ solicitors had commenced negotiation with reference to the Plaintiff’s Terms. The negotiation failed and the plaintiff initiated proceedings against the defendant in the High Court of Malaysia for damages arising from the defendant’s alleged breach of contract. The defendant, however, commenced arbitration proceedings in London and consequently sought a stay order pursuant to section 10 of the Arbitration Act 2005 and challenged the jurisdiction of Malaysia’s High Court. In response, the plaintiff applied for an anti-arbitration injunction on the grounds that the English courts have no jurisdiction over the proceedings based on the terms agreed between both parties in the Supply Contract.

On the issue of whose terms apply, the High Court held that the parties are contracted on the Plaintiff’s Terms and therefore, the Malaysian court has jurisdiction to adjudicate the matter. Judicial Commissioner Atan Mustaffa held that the plaintiff had attached their terms during their invitation to tender whereby it clearly states the recipients were invited to tender using the form provided and on the basis that it was the Plaintiff’s Terms that were to apply as found under the heading of “IMPORTANT NOTE”. Although the defendant’s hyperlink to the Defendant’s Terms was stated in the footer of its emails to the plaintiff during negotiation, there was no indication that the defendant’s offer made pursuant to the plaintiff’s invitation was a counter-offer on the Plaintiff’s terms.

In addition, the learned Judicial Commissioner held that the invitation to tender issued by the plaintiff via email was an offer and capable of immediate acceptance and should not be regarded as a mere invitation to treat apart from the specific price made on the forms. The forms included specified time and place of supply, fuel specifications, and terms and conditions therewith, which were already present in the invitation to tender and was not left open for any further discussion.

The learned Judicial Commissioner held that the hyperlink to the Defendant’s Terms was not sufficient to be incorporated into the Supply Contract. There was no step taken by the defendant to draw the attention of the plaintiff to the application of the hyperlink which only appeared in the foot of the defendant’s emails.

The defendant did not make it plain that the Defendant’s Terms were to govern the Supply Contract by giving reasonable notice of the conditions in a visually prominent way. A reference to an inconspicuous hyperlink at the bottom of someone’s signature at the footer of the email does not constitute sufficient notice of intention to contract on different terms.

Tips when incorporating hyperlinked terms

Here are some tips that businesses may use when incorporating these hyperlinked terms during the course of negotiations-

1. Clarity is the key. You should expressly inform your counterparty that your terms apply and are available on a website. For example, the link is accompanied with a notice stating, “Please click here for our terms and conditions of trade”. Do consider placing your hyperlink at the body of the email. Avoid placing the hyperlink anywhere inconspicuous, such as the footer of the email using very small font size. Also, do ensure that the hyperlink is valid and not broken.
2. Insert a date on all your contracts. This is so that you know which version of the terms and conditions you were dealing with in the future.
3. Keep your terms and conditions up to date.
4. Keep a record of your previous contracts. As disputes may arise any time in the future, you may not know which contract is applicable if you have various versions of the contract. Such previous contracts may be recorded by way of a print screen.
5. Employ a tracking mechanism in the system. This could keep track of whether the counterparty had accessed the terms and conditions.
6. Verify whether the terms reflect what have been agreed by the parties. In other words, ensure the terms are parallel to what have been discussed or negotiated with the counterparty.
7. Check the terms thoroughly. Be extremely attentive to the accuracy and the detail of the terms. Staff should be trained to identify any ambiguous terms that may knock back any rights that you may wish to protect, especially when it involves any onerous provision. The court may hold against you for not examining the provisions stated in the terms and conditions.
8. Consider Response Procedure. This is even if you do not have any enquiries regarding the hyperlinked terms provided by the other party. Such response procedure can be in the following manner-
a. Open discussion regarding the contract or terms;
b. Investigate any problems which may affect your rights;
c. Review the terms and decide whether the contracted terms should apply.

First published on Digital News Asia on 20 and 21 September 2021.

Virtual Conference on Corporate and Commercial Law (6 to 10 Sept 2021)

I will be speaking in the 4th session on the topic “Digital/Electronic Signature Legislation and Developments” together with Satish Ramachandran and Azrul Abdul Hamid on 7 September 2021. In this session, we will share the history and current development of digital or electronic signature in Malaysia.

Do check out the other sessions by the other speakers!

To register, please visit this link.

1 2 3 35  Scroll to top