NAME OF MODULE COMMERCIAL LAW

MODULE CODE
LAW 102
ACADEMIC STAFF
AMARLINA BINTI CHE ABDUL HALIM
RATIONALE The rationale to include this module in the academic programme is because this
module is the core and major module in the academic programme.
SEMESTER & YEAR
SEMESTER 6 YEAR 2

FACE TO FACE (HOURS) OTHERS (HOURS)

STUDENT LEARNING TIME (SLT) LECTURE TUTORIAL PRACTICAL OTHERS TOTAL INDEPENDENT
GUIDED LEARNING
TOTAL SLT 42 0 0 0 42 78

CREDIT VALUE 3.00 Credit Hours

NOTATIONAL HRS 120 Hours/Semester

PREREQUISITE None

OBJECTIVES 1. To provide an overview of the Malaysian legal system.

2. To equip the students with a basic understanding of the commercial laws in
Malaysia.
3. To expose to the students on how to refer and apply the laws when they are
involved in the commercial transactions.
4. To study the Shari'ah principles regulating commercial transactions and
compare to that of conventional dealings.

LEARNING Upon successful completion of the Module, the student will be able:-
OUTCOMES
1. Discuss the Malaysian legal system and the application of laws in some
commercial sectors.
2. Explain principles of contract as the core of commercial transactions.
3. Identify the pertinent sources of law (statutes orland case laws) applicable to
specific commercial problem.
4. Compare the principles of commercial laws from both Shari'ah and
conventional perspectives.

TRANSFERABLE Knowledge, skills and attitudes develop through class room teaching and
SKILLS discussion through assignments.

TEACHING-
The focus of lectures is to impart knowledge that stimulates learning and critical
LEARNING
thinking. In tutorials, the emphasis is on the application of knowledge in the real
STRATEGY
world of business and accounting practices.
ASSESSMENT  Continuous Assessment – 60%
METHODS & TYPES o Quizzes
o Assignment
o Case review
o Mid-term examination
 Final Examination – 40%
MAPPING MODULE
TO PROGRAM AIMS This course is one of the compulsory courses that provide knowledge, skills and
attitude enabling student to attain academic award.

MAPPING MODULE
TO PROGRAM LEARNING OUTCOME DOMAINS
LEARNING Knowledge 
OUTCOMES Practical skills
Social skills and responsibilities
Ethics, professionalism and humanities 
Communication, leadership and team skills
Scientific methods, critical thinking & problem solving skills 
Lifelong learning and information management skills 
Entrepreneurship and managerial skills

MODE OF DELIVERY
The mode of delivery for this module is on a full time basis and if there is a
demand, the module may be delivered on a part-time basis.

SYNOPSIS This course is meant to expose to the students the general overview on the
commercial legal environment in Malaysia. Firstly, it will discuss the Malaysian
legal system covering the sources or laws, separation or powers, administration or
justice,' application of English law and the position of Shari'ah law.
Secondly, this course will inculcate the- basic understanding in the law
or .contract as the governing principles in all commercial transactions. This topic
comprises the nature and legal consequences of contract, formation of contract,
_Iegal capacity, performance of contract, breach of contract and remedies. The
Shartah principles of contract are also discussed in order to instil an analytical
understanding in this important topic.

The third part of the course will specifically discuss relevant laws regulating
commercial activities encompassing the sale of goods, hire-purchase; agency,
employment and consumer protection. The law on monetary instruments, banking
and insurance are also included since such commercial activities are also
commonly practiced in. Malaysia. The coverage of these topics however will be
very minimal since the course aims to provide the students with general guidelines
to these commercial transactions.

CONTENT OUTLINE OF THE MODULE AND THE STUDENT LEARNING TIME PER TOPIC

CONTENT OUTLINE LECTURE TUTORIA PRACTICA OTHERS

L L

Introduction to the Malaysian Legal System

• What is law
• Classification of law
• Sources of law
• Separation of powers 3 0 0 0
• Administration of Justice
• Application of English Law
• Introduction to Shari’ah Law
Law of Contract
• Introduction
 Definition & Elements of contract
 The law applicable-Contract Act 1950
• Formation of contract 3 0 0 0
 Offer & Invitation to Treat
 Acceptance
 Intention to create Legal relation
 Consideration

Parties to the Contract

• Capacity to Contract
• Factors that may affect free consent 3 0 0 0
• Valid, void and voidable contract

Discharge of Contract
• Performance of Contract
• Breach of Contract 3 0 0 0
• Remedies for Breach of Contract

Law of Contract in Shari’ah

• Definition of ‘Aqd
• Legality of ‘Aqd
• Elements of ‘Aqd
Offer (Ijab)
o Acceptance (Qabul)
3 0 0 0
o Session of contract (majlis ‘Aqd)
o Subject matter (ma’qud ‘alaih)
• Termination of ‘Aqd

Sale of Goods
• Nature & Elements of Sale of Goods contract
• The law applicable
• Scope of Sale of Goods Act 1957 (SOGA)
• Formation of Contract of sale
 Formalities
 Parties to Contract of Sale
 Offer & Acceptance
 Price
 Subject matter
• Implied Terms under SOGA 6 0 0 0
• Passing of Property
 Specific & uncertain goods
 When risk passes
 Furstration
• Passing of Title: Nome Dat Rule
 General rule
 Exceptions to “Nemo dat quod non habet” Rule
• Remedies for breach of contract of sale

Sale of Goods in Shari’ah (Bay’)

• Nature & Legality of Bay’
• Elements & Conditions of Bay’
3 0 0 0
Hire-Purchase
• The Law applicable- Hire-Purchase Act 1967 (HPA)
• Definition of hire-purchase agreement
• Goods under the First Schedule of HPA
• Goods under the First Schedule of HPA
 Hirer 3 0 0 0
 Owner
 Dealer
 Guarantor
• Repossession

Islamic Hire-Purchase (Al-Ijarah Thumma Al-Bay’)

• Definition & Legality
• Islamic hire-purchase (AITAB) as a mode of financing
Consumer Protection Law
• Manufacturer’s Liability
• Comsumer’ Rights 3 0 0 0
• The Consumer Protection Act 1999
• Exemption Clauses
• Consumer Lawa form Shari’ah perspection-Doctrine of
Khiyar al-Ayb

Law of Agency
• Creation of Agency
• Rights and Duties of an Agent
• Agent and the Third Party 3 0 0 0
• Termination of an Agency
• Agency from Shari'ah Perspectives- Concept of 01Wakalah

Monetary Instruments
• The law applicable- Bills of Exchange Act 19_49 (BOE)
• Definition and Types of monetary instruments
3 0 0 0
• Characteristics and function of monetary instruments

Islamic Banking & Finance

• Development and Principles of Islamic banking
• Islamic banking products
• Types of Takaful Business
• Differences between Islamic banking and conventional
3 0 0 0
banking system
• Some selected legal issues

Islamic Insurance (Takaful)

• Nature and Development of Takaful
• Principles of Takaful
• Types of Takaful
• The Shari’ah Supervisory Council
3 0 0 0
• Differences between Takaful and conventional insurance
• Some selected legal issues in Takaful

42 0 0 0
TOTAL CONTACT HOURS
MAIN REFERENCES 1. Bills of Exchange Act 1949
BOOKS 2. Consumer Protection Act 1999
3. Contracts Act 1 950
4. Hire-Purchase Act 1967
5. Islamic Banking Act 1983
6. Sale of Goods Act 1957
7. Takaful Act 1984

ADDITIONAL
REFERENCE BOOKS 1. Abdullah Alwi Hassan (1992), Sales and Contracts in Early Islamic
Commercial Law, Islamic Research Institute, International Islamic University,
Islamabad. International Islamic University, Islamabad.

2. Ahmad Hidayat Buang (2000), Studies in Islamic Law of Contracts: The

Prohibition of Gharar, International Law Book Services, Kuala Lumpur.

3. Ala' Eddin Kharofa (1997), Transaction in Islamic Law, AS Nordeen.

4. Beatrix Vohrah, Wu Mih Aun (2000), The Commercial La-w of Malaysia,

Longman, Kuala Lumpur.

5. Islamic Banking Practice from the Practitioner's Perspective (1994), Bank

Islam Malaysia Berhad, Kuala Lumpur.
6. Lee Mei Pheng (2005), General Principles of Malaysian Law. 5th Edition,
Penerbit Fajar Bakti Sdn. Bhd. Kuala Lumpur.

7. Syed Ahmad S A Alsagoff (1996), Principles of the Law of Contract in

Malaysia, tv1a.layan Law Journal, Kuala Lumpur.

8. Takaful (ls:amic Insurance): Concept and Operational System from the

Practitioners' Perspective (1996), BIMB Institute of Research and Training, Kuala
Lumpur.

9. Wan Arfah Hamzah, Ramy Bulan (2003), An Introduction to The Malaysian

Legal System, Fajar Bakti, Kuala Lumpur.

10. Ahmad Mohamed Ibrahim (2000), The Administration of Islamic Law in

Malaysia, Institute of Islamic Understanding Malaysia, Kuala Lumpur.

11. Lam Sinn Hui (1006), Commercial Law (students’ Companion Law Series),
International Law Book Services, Kuala Lumpur.
12. Lee Mei Pheng, Detta Samen (1997), Commercial Law in Malaysia, Malayan
Law Journal, Kuala Lumpur.

13. Liaquat Ali Khan Niazi (1991), Islamic Law of Contract, Research Cell, Dyal
Sing Trust Library, Lahore.

14. Shaik Mohd. Noor Alam (2000), Undang-undang Komersil Malaysia, Dewan
Bahasa dan Pustaka, Kuala Lumpur.

OTHER ADDITIONAL Articles:

INFORMATION 1. Mohd. Daud Bakar (1996), “Contract of Exchange in Islamic Law of
Transactions as Applied in Interest-Free Banking System”, paper presented at
Seminar on Shari’ah and Legal Aspect of Islamic Banking Practice, Kuala
Lumpur, 29-30th May 1996, pp. 1-34.

2. Affifuddin Omar (1995), “Development of Islamic Banking in Malaysia”, New

Horizon, February 1995, p. 12-13.

3. Mohd. Daud Bakar (2000). “The Problem of Risk and Insurable Interest in
Islamic Takaful: A Jurispridential Analysis”, paper presented at the 4th
International Conference on Islamic Economics and Banking, Loughborough
University, United Kingdom, 13-15 August 2000, pp. 179-192.

4. Mohd. Ma’sum Billah (1997), “A Model of Life Insurance in the Contemporary

Islamic Economy”, Arab Law Quarterly Volume 12, Number 3, March 1997,
Pages: 287 – 306 Brill Academic Publishers.
5. Rustam Idris (1994), “Towards Islamic Banking: The Malaysian Experience-
Ill”, New Horizon, September 1994, p.9.