TOPIC 4 & 5:

PRODUCT QUALITY AND SAFETY

UNDER CIVIL LAW & CRIMINAL
LAW
CONSUMER LAW (DIL2236)
 CPA 1999
• Section 66, "product" means any goods and, includes a product which is comprised in
another product, whether by virtue of being a component part, raw material or otherwise.
• Section 67(4), For the purposes of this section, "safety", in relation to a product, shall
include-
(a)safety with respect to products comprised therein;
(b)safety in the context of risk of damage to property; and
(c)safety in the context of risk of death or personal injury.
A. PRODUCT QUALITY AND
PRODUCT SAFETY
• In Malaysia, standards are applied as minimum requirements to ensure safety across
products and services.
• Most of the national standards development activities are outsourced by Standards Malaysia
to SIRIM Bhd, which is a corporate standards development agency.
• SIRIM Bhd, through its subsidiary, SIRIM QAS International Sdn Bhd, is a nationally and
internationally-accredited product testing and certification agency that supports the
promotion of Malaysian and international standards for the industries.
• The concerns related to safety of consumers in Malaysia stem from various reasons
especially related to exposure to a multitude of hazardous chemicals at varying levels and
duration in various consumer products such as:
• Food
• Drugs
• Cosmetics
• Household Chemicals (such as insect or aerosol sprays)
• Detergent
• Pesticides
• Building and construction (materials and structures)
• Perfumery – air fresheners,
• Household paints /varnishes
• Motor vehicles (safety features, parts, maintenance, etc)
 1. PRODUCT QUALITY
• The common law rule is ‘Let the buyer aware’, i.e. a buyer must exercise care when he makes purchases. If he
does not, he must bear the consequences. This rule is restated in section 16 of the SOGA 1957.
• The two exceptions to this rule are:
1. Goods must be reasonably fit for purposes for which the buyer wants them; and
2. Goods must be merchantable quality.
• Where the buyer, expressly or impliedly, makes known to the seller the particular purpose for which the goods
are required so as to show that he relies on the seller’s skill or judgement, and the goods are of a description
which is in the course of the seller’s business to supply, there is an implied condition that the goods shall be
reasonably fit for such purpose.
• Where goods are bought by description from a seller who deals in goods of that
description, there is an implied condition that the goods shall be of merchantable
quality provided that if the buyer has examined the goods, there shall be no implied
condition as regards defects which such examination ought to reveal.
• As in the case of fitness for purpose, the implied condition that goods must be of
merchantable quality only applies where the sale is by description from a dealer in
goods of that description.
 JO1934] 52 CLR 110
• Facts: Willis went to the shoe department of David Jones and told the saleswoman that she wanted a
comfortable pair of shoes because she had a bunion on her feet. After trying on a number of pairs she
bought a pair which was recommended by the saleswoman.
• The third time that she wore the shoes the heel broke off one of them, causing her to fall and break the
leg. The evidence showed that the shoes were not well made and that the heels had not been properly
attached to the shoes
• Held: As the shoe had been bought by description, there had been a breach of the implied condition of
merchantable quality.
• Quality of goods refers to their state or condition. For example, in a sale of lorry it is an implied condition
that the lorry will not overheat easily.
• This implied condition as to merchantable quality applies even where goods are sold under their patent or
trade name.
• For instance, if Amin buys a pair of Levi’s jean, it is an implied condition that he will not get rashes when
wearing it due to the chemicals which might have been used during the manufacture of the jeans.

Willson v Ricket, Cockerall & Co. Ltd [1954] 1 All E.R. 868
• Facts: A lady ordered fuel by its trade name ‘Coalite’ from a fuel merchant. The consignment included a
piece of coal which a detonator was embedded, resulting in an explosion in the fireplace.
• Held: The consignment is a whole was unmerchantable.
• It had defects making it unfit for burning.
• There is no need for the buyer to make known to the seller the purpose for which the goods are required.
• ‘Merchantable quality’ has been taken to mean that they must be reasonable for the purpose described.
• This requirement must be satisfied even where the article is sold under its trade or patent name.

• Factors to be taken into account to determine ‘merchantability’ include:

1. Price;
2. The description applied to the goods;
3. Whether the purpose for the goods had been made known to the seller; and
4. Any other circumstances relevant to the sale.

• It is to be noted that if the description in the contract is so general that goods sold under it can normally
be used for several purposes, then goods would be merchantable under that description if they were fit
for any one of those purposes.
HENRY KENDALL & SONS V WILLIAM LILLICO & SONS LTD
[1968] 2 ALL E.R 444

• Facts: Brazilian extract was sold to manufacturers of cattle and poultry foods all
over England. The ultimate buyers of a large quantity of meal containing the
extract lost a large number of young poultry.
• It was discover that this was due to a high concentration of a poisonous substance
in the extract which, while suitable for cattle and older poultry, was deadly to
young poultry.
• The suppliers had known from their previous dealings with the manufacturers of a
meals in question that they only made poultry foods and for this purpose the extract
was obviously unsuitable.
• Held: As the extract was suitable for compounding into meal for cattle and older
poultry, there was not breach of an implied condition or merchantable quality.
• However, if the description is so limited that the goods sold under the contract could only be
used for one purpose, then the goods would be unmerchantable if they were of no use for
that purpose

Wren v Holt [1903] 1 K.B 610

• Facts: Wren went into a hotel and asked for a beer. The beer contained arsenic as a result of the
keg not being properly washed out.
• As a result of drinking it, Wren fell ill.
• Held: There was an implied condition that the beer would be of
‘merchantable quality’. That is, that it would be fit to drink.
• But because of arsenic, it is unmerchantable.
 2. PRODUCT SAFETY
• Section 19, on the safety standard,
(1) the Minister of Ministry of Domestic Trade, Co-operatives and Consumerism, may
prescribed the safety standard for goods and services.
(6) This standard is not apply to healthcare goods and food.

• Section 20 provides that no person shall supply, or offer to or advertise for supply any goods
which do not comply with the safety standards determined under section 19(1).
• In the situation where no safety standard has been determined, section 19(4) provides that
the person supplies or offers to supply the goods shall adopt and observe a reasonable
standard of safety to be expected by a reasonable consumer, due regard being had to the
nature of the goods concerned.
• Section 21 imposes general safety requirement for goods.
• It provides that, in addition and without prejudice to section 20, no person shall
supply, or offer to or advertise for supply any goods which are not reasonably safe
having regard to all the circumstances, including:-
the manner in which, and the purpose for which, the goods are being or will be marketed;
the get-up of the goods;
the use of any mark in relation to the goods; and
the instructions or warnings in respect of the keeping, use or consumption of the goods.
• This general safety requirement will impose on the supplier a duty to trade safely.
• It does not impose a duty to supply goods which are absolutely safe as the cost of achieving
this will be very costly and this will make consumer goods to be so expensive that they fall
out of the reach of poorer consumers.
 3. PENALTY
• The penalty for contravening the provisions in Part III is provided in Part IV of the
Consumer Protection Act 1999, particularly section 25.
• Section 25 provides that any person who contravenes Part II and III commits an offence.
(a) if such person is a body corporate, to a fine not exceeding RM250,000, and for a second or
subsequent offence, to a fine not exceeding RM500,000;
(b) if such person is not a body corporate, to a fine not exceeding 100,000 or to imprisonment
for a term not exceeding three years or to both, and for a second or subsequent offence, to a
fine not exceeding RM250,000 or to imprisonment for a term not exceeding six years or to
both.
 4. DEFENCE UPON INNOCENCE
• However, the supplier/manufacturer/seller may defend himself as stipulated under section 27, whereas,
in any proceedings for an offence under section 25, it shall be a defence for the person charged to prove-

(a)that his guilty was due to-

(ii)a reasonable mistake on his part;
(ii)reasonable reliance on information supplied to him;
(iii)the act or default of another person;
(iv)an accident; or
(v)a cause beyond his control; and

(b)that he took reasonable precautions and exercised all due diligence to avoid such contravention by
himself or by any person under his control.
B. ADR IN RESOLUTION OF
CONSUMER DISPUTES
• Alternative dispute resolution (ADR) is proposed to overcome the weaknesses of the court
system.
• The establishment of ADR is to fill up the lacuna that exists in the consumer protection regime
which is considered as shortcomings due to failure to provide efficient access to justice.
• The Tribunal for Consumer Claims (TTC) is an ADR mechanism.
• ADR has gained a place in society in relation to dispute resolutions.
• The difference between ADR and the court system is that, in court, a judge will determine a
dispute before him. In ADR, a middle person, such as mediator or arbitrator will discuss with
the parties involved in a dispute to find a solution, which is just for both parties.
• The objective of TCC establishment is to provide an alternative channel to consumers who
seek redress against the trader/supplier of goods and services by a simple, inexpensive and
quick manner.
• The establishment of the TCC is one of the best alternatives to consumers to get remedy
from the dealers/manufacturers/suppliers of services or goods.
• The main features of this quasi-judicial body are that consumers to file their claims without
going through a lengthy and complicated legal process, with a reasonable fees of RM5.00 to
file their claims and the claims will be heard and adjudicated within 60 days from the date of
commencement of the hearing.
 1. DISPUTE SETTLEMENT PROCESS IN TTC
• One of the elements of ADR is informal.
• However, the TCC proceedings are bound by the Consumer Protection (Tribunal for
Consumer Claims) Regulations 1999 (CPR 1999) that provide for the manner of the
proceedings that should be conducted.
• At present, all claims will be heard in open court and the proceeding is bound by the
regulations.
• No legal representations allowed.
• The consumers and dealers/manufacturers/suppliers of services or goods are barred to be
represented by any legal practitioners except for full-time in-house lawyer of
dealers/manufacturers/suppliers of services or goods.
• Nevertheless, according to section 107(1) of the CPA 1999, the TCC can assist the parties to
negotiate an agreed settlement in relation to the claims.
• Where the parties have reached an agreed settlement, the TTC shall approve and record the
settlement and the settlement shall then take effect as if it is an award of the TCC (section
107(3) of the CPA 1999).
• However, if it appears to the TCC that it would not be appropriate for it to assist the parties
to negotiate an agreed settlement in relation to the claim, or the parties are unable to reach an
agreed settlement in relation to the claim, the TCC shall proceed to determine the dispute.
• During the hearing of the claim at the TCC, the President will assist the parties on the
subject-matter of the disputes raised by the claimant.
• Although the parties are given the opportunity to submit their respective arguments, the
parties would still be bound by the TCC procedures and no element of confidentiality
adopted in existing proceedings.
 2. NEGOTIATION
• One of the significant features of the TCC is where the President has been given the power to begin an
ADR process with negotiation.
• Negotiation is a discussion and mutual understanding of the requirements of the transaction or agreement.
• The negotiation process adopted at the TCC is part of the TCC proceeding process (section 107(1) of the
CPA 1999).

• The advantages of negotiation among others are;

i) Parties are in the best position in assessing the impact of any proposed solution;
ii) Parties “owned” the negotiation process and can interpret the terms in any way at the option of the parties;
iii) Parties created a proposed settlement between them and they will be more committed to ensuring
consensus; and
iv) Parties have the opportunity to participate for any purpose to be achieved.
 FIGURE1:
DISPUTE
SETTLEMENT
PROCESS IN
TTC
 WEAKNESS OF NEGOTIATION

1. The Difficulty to Reach Settlement by the Parties

2. Imbalance of Bargaining Power
3. No Supervision in the Process of Negotiation