YOURSAY | 'If there is fraud in the scheme, then the agreement is void.'

M'sia cannot be tied down by bad contracts

Causerie: When China's 'One Road One Belt' (Obor) initiative was launched around 2013, they had to deal with BN, which had been ruling Malaysia for 61 years.

Traditionally China does not get involved with the local politics of other countries and these projects comprise only a few out of the thousands that are being implemented by China.

When one reads such a contract with frivolous terms and conditions, this might partly, if not entirely, be due to special requests from one party.

We will need our best diplomats, like tycoon Robert Kuok, to renegotiate with China to come to a compromise.

Since it is known that such contracts are already in place, any further airing of 'dirty laundry' will not help with the situation.

Pakcik Am: Contracts cannot be breached, but they can be renegotiated. In this way, both parties remain friends. This requires diplomatic skills.

Hplooi: It's Contract 101. Voidable contracts are defined as follows -

1) Contract signed under duress or false pretence.

2) Person signing does not have legal capacity, e.g. minors, insanity, not in possession of full awareness (e.g. drunk, or thumbprint was affixed when the signer was asleep, etc.).

3) Clauses/conditions are illegal, i.e., against any current laws (e.g. if corruption related to the project is proven).

4) Considerations must move with the promise. Meaning payment (considerations) for the project delivery (the promise) must relate. So if payment made is unrelated to the promise, it may reasonably be construed as corruption.

I believe no contract will explicitly state considerations to be made for unrelated activities. If unrelated payment can be proven (which is difficult, given the opacity of the Chinese financial system) then the contract can be voidable.

In civil contract law, compensation and damages that can be ascertained is the norm, not penalty. Penalty is only applicable in statutory laws, e.g., the Penal Code.

Penalty under statutory laws are meant to be a deterrent under the principle of "the penalty fits the crime" and may be subject to limits.

Compensatory norms under civil laws, e.g. contract law, civil law (e.g., defamation, breach of trusts, termination clauses in contracts, etc) require ascertaining damages.

So, those screaming for Malaysia to pay huge penalties for terminating contracts are simply ignorant.

Bravemalaysian: I fully agree. Even laws that are unfair can be challenged in court, and it can also be changed.

Unfair contracts cannot be unilaterally terminated but can be renegotiated and by mutual consent be altered.

Any party looking to do long-term business must certainly consider renegotiating any unfair contracts.

Eagle: If there is fraud in the scheme, then the agreement is void. Otherwise, any corrupt leader can sign all sorts of agreements and make us pay for it.

If the project is completed, they ‘untung’ (profit), if the project is abandoned, they also ‘untung’ from the penalty.

If leaders have been bribed, sorry, the agreement is void. If you buy stolen goods without knowing they were stolen, the goods are still deemed not yours and you can still go to jail.

In the case of the East Coast Rail Line (ECRL), the estimated cost was RM27 billion but the project was cost at RM55 billion. Well, don't we have a case?

Anonymous#007: This is a well-written article by Bersatu strategist Rais Hussin.

In common law, a court can decide not to enforce a valid contract if it is deemed extremely unfair to one or more party. This power given to the court is designed to protect innocent people from unfairness in the bargaining or negotiation process.

Anyone with room-temperature IQ can see how lopsided the contracts are, not to mention the glaring signs of corruption involved.

Given the mountain of credible evidence of alleged corruption and misappropriation against former prime minister Najib Abdul Razak and his regime, we should consider requesting our 'friendly neighbours in the region' to renegotiate the contracts or take the cases to the international courts to declare them void.

China does not need this negative publicity to mar their colossal and much more important Obor initiative, and is certainly in a financial position to 'forgive' the payments and penalties imposed under those unfair contracts.

I hope Singapore would also be willing to come to an amicable solution with the High-Speed Rail (HSR) project.

I hope China and Singapore would put aside sovereignty and do this as a support for the Malaysian people who have bravely voted for change in their beloved country.

Khalid Gibran: Bad contracts have always been the way to do business in Malaysia. This has been happening for years.

Talking of bad contracts, the China deal is just one instance. What about the toll contracts? The rakyat will continue to pay tolls for years and years and years. Those contracts will just bleed us to death.

The taxpayers were all taken as suckers. So just don’t harp on China's deals, on the whole, we do business like clowns.

Fyddeep: Bad and corrupt contracts must be terminated even though they had been signed by both parties. These parties signed agreements purportedly to steal money from Malaysians.

They have to be terminated. This is God's law.

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