Thank you note!

Taking the opportunity from my blog, I would like to thank my lecturer, Dr. Sonny Zulhuda for his guidance and assistance in our assignment of making this blog a great one, apart from having given lots of inspirational lectures and information tutorials sessions. I hope that in future, we will be working on something big together or, simply, just to sit down and see him do great things and be proud that I'm one of his student.

As for that, my hats are down and my hands are off the keyboard (impossible, as I'm still typing) to express my wholehearted thankfulness and gratefulness for the time of us sharing the understanding and knowledge of Business Law.

Truly enjoy the class and hope to excel in the finals! (Dr. Sonny, keep note of my ID, I need the good grades from you)

Thank you very much again and again and hope to see you soon!

Regards,
Let's Speculate More!

Internet Marketing and the Source of Income

As many of you all know the current trend of doing online business, or earning money through online. But as simple as both statements sounds, it differs a lot, especially on the second one. The reason behind of me stating this is because online business simply means doing business online and with the such of having a bidding online, online auction, selling stuffs through online.


But earning money through online has the other form of generating the income streams. Why can I tell you this, is because I have tried it before and I know what is it all around. Earning money through online is in fact, like Marketing Communication companies do, but instead of approaching people or doing events elsewhere, their main focus is on online platform. But on the online platform, how to earn money? Some may post up ads, and for people to write post, such as PayPerPost or even KennySia.com, Malaysia's Famous Blogger that write post for companies who want to advertise. Still this is not that complicated.

The complications starts when a different method and many of them were used. With the likes of advertisement through Google Adsense, a subsidiary of Google that placed ads on people's website but without the discretion of the owner of the site. Yes of course, the owner will have to signed and agreed on the T&C, but what I mean is that, the owner will not know what type of ads will be generated as it is randomly generated but with an mechanism to focus on your post. Let's say you post on Golf, and the ads will have golf ads on your website. Thus, the earning streams comes from clicks known as PayPerClick, or PayPerImpressions and many more.

And with that, many of us will put that, and Google will only pay you if you reaches USD$100. And that will be darn freaking long, I can tell you, so some took advantage and started having lots of blogs with no details but with high intention to earn money, before Adsense have this blockage to stop this people for making it worse for the companies (as Google have to be responsible to the companies that placed the ads). And with that, the Earning Money Through Online Saga continues, as people even write up E-book for sale to people and teaching people how to earn money through online. Some established companies and method like Stuart Tan from Singapore had proven some of the theory and it did worked. But as usual, the pie of a pot of gold will be exhausted as well, thus many started trying this stuffs again and again.

Alright, let me tell you something, from what I believe is that, if earning money through online is that important, earned it with conscience. Do not take advantage of the money but in the prospects of learning. This is essential and heaven-of-important. And let me share this story of a 17 Malaysian Boy (2008, where I was hyped about the issue) who earned about RM 10 000 in a month. The boy name is Labanon, now I think is 19-years old, and he did the same thing browsing such stuffs and trying what I was trying to do that time. But anyhow, the stories goes like this, my main concern is not how he earned the money, but what is the tax implications of this scenario.

As magnificent as it sounds, we are Malaysian we are to drawn down to it to see some implications even though you are capable of earning it. With the previous few post on Income Tax, he is not in the working force yet, and is still studying. Will he be charged for Income Tax?

The answer will, in my opinion (correct me if I'm wrong) will vary in a different way. First of all, the question is not his age, but the income stream. Is it periodical income stream (that means constant) or it is an one time payment? And even if it is an one time payment, is the profit from a business?

With that we will get a clear answer is that yes, this is an income by definition of Section 4 of ITA 1967. And from that, I will evaluate the point from here. Even without his parents knowledge, he has to pay income tax, with the reason is that, although Google Adsense is in US, all the operations are done in Malaysia, and this is definitely true, because all bloggers who earned money through online paid taxes (subject if the income is more than RM 27000 annually). In addition to that, something that I learnt last time is that Google will have an agreement with you to state whether you are a citizen of USA or not. If you are not, you are not asked on the tax code, but..there is a BUT! In the terms and conditions, you have to bear your own cost for tax, as you are not paying tax and google do not have to pay for you. So in both countries with taxation system, and with both must have one side being paid tax, is simply, the blogger have to pay for the tax.

That's why, Tax is always a big issue..first because it involved money.and second it got too much things to consider...hehe..

The Process of your Income Before Being Taxed! aiyoyo..

Alright, always the issue of how much money will I be taxed, how can I run away from being taxed and etc.

Alright, below are the procedures that is taken from my lecture notes on how Chargeable Income (the income where the taxes are charged) are computed.

The steps is as follow (the following steps is very essential especially for taxpayer, at least you have a good understanding on the process of it);

1. Gross Income: all the income that includes any sums, before deduction of any allowable expenses
2. Adjusted Income: calculated by deducting all outgoings and expenses incurred in the production of gross income
3. Statutory Income: determined by adding balancing charge with the adjusted income any by deducting capital allowances
4. Aggregate Income: Combination of statutory incomes less the business losses from the previous year
5. Total Income: aggregate income - current year adjusted business loss, less others
6. Chargeable Income: Total Income - Personal Relief

I would like to take this opportunity in this post, to talk a little on Personal Relief. Apparently with so much taxes being taken away, from our income, our Government had the so-call incentives (thankful for feeding them with money), that is called the relief, as if you have wife, children, books, and etc.
The below are the list of reliefs (adapted from http://www.mida.gov.my/en_v2/index.php?page=personal-income-tax)

4.1.1 Personal Relief

The chargeable income of resident individuals is computed by deducting the personal reliefs from the total income. The types of relief available are:

Relief	RM
Self	RM8,000
Further self relief - disabled	RM6,000
Wife/ husband	RM3,000
Further wife/ husband relief - disabled	RM3,500
Medical expenses for parents;	RM5,000
Medical expenses for taxpayer, spouse or children on serious diseases (include RM500 for medical examination);	RM5,000
Expenses on supporting equipment for disabled taxpayer, spouse, children or parent;	RM5,000
Expenses on supporting unmarried children:
i. Below 18 years of age;	RM1,000
ii. Disabled child	RM5,000
iii. Over 18 years old (pursuing tertiary education at university or college)	RM4,000
Life insurance premiums or approved fund contributions	RM6,000
Insurance premiums for education or medical benefit	RM3,000
Annuity premium on annuity purchased through EPF Annuity Scheme	RM1,000
Fee of acquiring law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological skills or qualification. In cases of post graduate studies, no restrictions on the field of study.	RM5,000
Purchase of books, journals and magazines and other similar publication (excluding newspapers).	RM1,000
Purchase of computer for once every three years with effect from the year of assessment 2007	RM3,000

Foreign Source Income on ITA 1967. The Vague Story to be Told!

From the observation of a few companies both medium and large companies respond on foreign source income issue. And from the recent research that I got from online, and forums, what I can generalised the answer is in a way that, the most logic and to seek for the truth.

As for the answer, the residential or the period of time whereby an individual resides and where he resides is eventually the most important point.

From the previous story of Mr. J, he is residing in Malaysia, and even with foreign source of income, he is subjected to Malaysian tax. In a way to tell, if he is a Malaysian and in tax-scope of resident status is in Malaysia as well, and also eligible to US Tax Status, he will not be subjected to Malaysian tax, but is to US Tax. And as US and Malaysia do not have the Double Taxation System, so Mr. J will either be taxed in Malaysia or either in US. That's the simple story.

A very good example as well will be blogging, if you are working for Google. And Adsense (sub company of Google) is paying for ads you earned from your website. Google paid you and apparently your income annually reaches more than RM 27 000, you are subjected to Malaysian Tax simply because you work in Malaysia (don't talk about the IP address stuff, later MCMC have to get involved ady).


Anyway to know more, there is an interesting link as below, that shares many funny and true stories;
http://forum.lowyat.net/topic/1003595
http://answers.yahoo.com/question/index?qid=20091222065411AAPJzhN
http://taxipay.blogspot.com/2008/03/us-citizen-or-resident-with-foreign.html

Income Tax Law: Foreign Source Income

Continuation from the previous post, and from the definition of Income Tax, that states that money that received in Malaysia but came from outside Malaysia are subjected to tax. The outside Malaysia term will fit in 'Foreign Source Income'. With effect from year 2004, individuals (again resident or non-resident) are assessable only on income accrued in and derived from Malaysia. This was an amendment made that any income that is made outside Malaysia is tax-free. But wait a minute? Is that possible. From the definition, and from Paragrah 28,Schedule 6 of ITA 1967, foreign source income is exempted from income tax.

However, with the term clearly defined, it still remain ambiguous at some point. The reason why as I put a scenario for you guys to think.

Mr J is a businessman from Malaysia and have been a Far-East representative for a company in US namely H. As a Far-East representative, his responsibility to do inspection and make report to the company H, via his expertise and experience in the industry. He is the only one in Malaysia that is working for H, and it had been going on since 2001 until now. All his money are paid from US and sent to Malaysia. With 2004 amendments on Foreign Source Income and by definition, he should be waived off from the tax.

But this remain untrue, as based on the true story and advise from accountants that audit his Income Tax stuffs, he is still entitled for the tax. And this may be the UGLY TRUTH, but I'm going to state to you guys. The reason is that, although the source is from Foreign, and it is subjected Mr J had to stay in US, just like if you are a Malaysian, have to stay for a certain period of time, only the income are not subject to tax.

This may seem funny, but I truly hope it can be debatable, but most auditors for Mr J had told the same thing. And this is a true story! Bite it and go!

Income Tax Law: Continued...

As our scope of taxes are narrowed to Income Tax, we will focus on Income Tax Law. And a very important point to note is that, our Income Tax Law are all accordance to Income Tax Act 1967. Even though every single year, different budget and percentage changes in the tax imposed, the basic of the law is still on ITA 1967.

A very important point to note will be how income tax is classfied. According to Section 3 of ITA 1967,
"A Tax known as income tax shall be charged for each year of assessment upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia".

This will thus, bring different definition to our context, with the number of days of resident play an important role. It is not whether you are citizen or permanent resident or sort, but to see how long you reside in Malaysia to check your Income Tax residence status. A reminder again, this is totally distinct from your origins or citizenship status in Malaysia.

Before we go on further, we shall discuss what are 'income'. Income must be repetitive from a source of income and received in the ordinary course of business. While you may think, let's say, I'm an event organizer, and I got money from different sponsors, and my money differs a lot, is that income?

As for that, the Income Tax Act or the authority (they are not that dumb to let you go), and all the gains or profit shall be referred to Section 4 of ITA1967 as follow;

1. Profits or gains of a trade, business, profession or vocation
2. Profits or gains from personal services - employment
3. Dividends, interests and discounts
4. Rents, royalties and premiums
5. Pension, charges or annuity or other periodical payments
6. Gains or profits not falling under any of the foregoing paragraphs.

With all gains, profits or income seem quite clear, the misleading number 6 can actually mean all the money that you earn. But still, there are points to consider. This is because if money that are not declared and yet is transacted, the authority may charged you of any case even money laundering.

And during each and every year, the basis period is the period of time upon which tax is assessed. Usually income tax is assessed upon one year period and as mentioned previously, April is the month of the Income Tax month. While on the other hand, the Year of Assessment means calendar year in which tax is assessed, and it begins from January and ends in December. As for individuals, it wouldn't affect much, but for corporate or business companies, it usually do not follow this calendar year. But anyhow, for Income Tax, before 2003, individuals are assessed on different horizon, before the amendments were changed and everyone is following the same time. Thus, accountants got more job.

Let's put this scenario and speculate on the situation that might happen.

AH is a student and an entrepreneur. He works as a part-time event organizer and had been actively doing his part professionally and learning every steps. He met with a lot of people, and especially with big shots like Dato', Datuk, Tan Sri, Yg Bhg and even Tun. With that influence, recently, he was given a project to do. The project is an event and the people are willing to fund him even up to RM 30 mill. As he do not need that much of money, the people behind this project are ready to allocate, as this pool of fund is not from a sole person, but multiple person. As he draft out the proposal and RM 30 mill were sent to him. Let's do not consider the people that gave him the money and how they do it. But narrow our scope to AH's Income Tax issue. He never paid tax, and do not even own a KWSP account. And for this, case with RM 30 sent to his bank account, CIMB were even terrified.

And let's say, yes, RM 30 mill is in his account now. What will you think will happen to Income Tax Authority. Even if he declare and do his event until the next year income tax audit, he will only be charged with the max of 26.8% and he wouldn't mind paying it. But let's bring this thing to logic, do you think Income Tax people will come or Malaysian Anti Corruption Commission (MACC) will come?

Think about it, because the scenario of him paying the tax is not a problem. But why is it that way that even we pay tax, we can be charged?? Please put some feedback on this. Thanks

The Inland Revenue Board (IRB)

As for many of us, we have to know, or must know this board as this is the authority who is taking all our taxes. Prior to March 1996, this board is actually called Department of Inland Revenue Malaysia, under the scrutiny of Ministry of Finance. As upon 1st March 1996, they became a Statutory Board, so call independent board.

The reason for today's post is simple that is to know their function and why is it important to know, because if next time you are working, you get to know who and how your tax money are used. Main thing to concern for IRB is that, they are responsible for

1. Formulation of new tax policies for both the private and public sectors
2. tax collection and
3. compliance enforcement.

These are probably adapted from the slides, but having to know this are essential and with my beefed up information in the later section.

Functions of IRB

• Act as an agent of the Malaysian Government and to provide services in administering, accessing, collecting and enforcing payment of taxes under the IRB
• Advice the Malaysian Government on matters relating to taxation and to liaise with the appropriate Ministries and statutory bodies on such matters
• Participate in or outside Malaysia in respect of matters relating to taxation
• Perform such other functions as conferred on the Board by any other written law
• Act as a collection agent for and on behalf of any body for the recovery of loans due for repayment to that body under any written law

And taxes under IRB will include income tax, petroleum income tax, real property gains tax, estate duties and stamp duties. And with that, we have also Malaysian Tax Academy who are in charge of guiding the team of people (who come and bugged you every year in the month of April)

The objectives of Malaysian Tax Academy are :-

1. To provide training for the officers and staff of Inland Revenue Board of Malaysia in taxation and management to enable them to carry out their duties in a professional manner;

2. To reinforce the knowledge and expertise of the officers and staff of Inland Revenue Board of Malaysia to meet the demands of a dynamic tax system;

3. To widen the perspective and knowledge of the officers and staff of Inland Revenue Board of Malaysia through joint training with individuals and organisations within and outside the country; and

4. To provide tax education to the public in order to enhance their knowledge and awareness regarding taxation in this country.

Let's see what Insurance Law have to say!

Jailed for biting off ear of lover’s husband

A TECHNICIAN who bit off the ear of his lover’s husband was jailed seven years and given eight strokes of the rotan by a court in Singapore.

China Press reported that the 42-year-old technician, who is a bachelor, committed the offence on June 18 last year at a Housing Development Board flat.

The technician’s lover had brought him back to her flat without realising that her husband was home. There was an argument between the two men which led to a fight and the biting of the ear.

The technician was arrested the same day.

Let's have this situation to think that, let's say the husband did purchased a life insurance. And probably he didn't know that his ears is so fragile (just joking) and let's don put sueing as part of the deal yet, will the insurance company be paying for his hospitality and services/treatment for his ears?

If you purchase life insurance, I have to say sorry but he won't be able to claim that. As this is considered as Personal Accident, and it shall be in another package called General Insurance, or you have to attach this plan as a rider to Life Insurance. How complicated it is? But sadly, this is true because judging from other point of view, this is an accident and is not something that we expect all living humans will have in their entire life. Thus, be smart in picking your insurance package! hehe..

Income Tax Law

Yes, finally one of the hottest topic, not just in law, but in politics in everywhere around the world. From how you can see it in US, Thailand (recently) and Malaysia (everyday). Everyone who is working above RM 32000 per anum (if I'm not mistaken) have to paid this tax, namely Income Tax.

And in fact, during this post is the time when the peak of the Income Tax Authority is waiting for our personal assessment to be sent to them before the big tax is coming. With that, every single year, the time for accountants will be busy is this month, October and December. But having said that, let's pop some questions for you, is Income Tax important for you?WHY? This will be the main agenda of our topic today.

Before we go on further, let's have some understanding what exactly tax are. Tax is a sum of money paid by the citizens to the government on the income or value of good purchases of certain specific goods and services. For individuals, we have income tax that is based on the amount that we earn and we have to give this contribution to the government. And as the relationship is directly from us to the government, the taxes that we paid from our income is called DIRECT TAXES. As for indirect taxes, is whereby our money is paid to the products or services that is charged with tax, which later will be paid by another agent to the authority. As for example, we go and eat in McD, and we have to paid for Government Tax of 5% , and that is indirect taxes.

So imagine, how many things we are paying for taxes nowadays. Even some Mamak (food stalls) and Chinese Hawker stalls nowadays require us to pay tax. And with the plan of having GST (goods and service tax) on everything we buy soon, wow, where is the money for us to even buy toilet papers? Just joking, but yes, as a country become more developed and with technology growing exponentially, more expenditure is to made from the Government bodies. And with 60-70% of Malaysia's income comes from tax, our country is depending on us, the smart and hardworking brats to fund for the country. WAIT A MINUTE!

Does it mean that tax is the main contributor to the Federal Government? Answer is YES! From the latest 3 years record (2007-2009) that I got from Bernama (click on this hood), 70.6% of our Federal Government Revenue amounting to RM 124, 379 millions are from taxes, this is the budget for this year (2009) actually. Alright, the actual amount collected on 2007 and 2008 were RM 95,168 millions and RM 107,737 millions respectively. And this collected amount stands in 68% (2007) and 66.5% (2oo8) in our country.

With that amount approximate 44% to 47% are coming from the income taxes. Be amazed with the figures below (click to enlarge)





And with that money, we citizens enjoy the infrastructure and facilities and improvement especially in standard of living. And back to our topic today, is Income Tax important for you? Definitely yes because if you do not pay it or submit your assessment you will be summoned, a huge amount of money. But is that the main important things? Simply NO, because the money that is taxed, you will try to minimize it as you want to have more money for yourself.

With that idea of 'more money for yourself', brings in the hot topic for country with taxes. Each and every year, Politics will fight each other and with 70% of our income is by tax, TAX is the topic that is always discussed. Click this link to read the latest story in America that was shared to me by Priya, our friend. The debate goes on, because with that huge amount of money, development is usually lack been seen in our country. I'm not saying that there are no developments, but the debate is always regarding that where the money goes, as with the budget, is money wisely managed.

As always, money is a sensitive issue and money makes the whole world goes round, you can see this effect that citizens will want their contribution to tax wisely used. And with that, some try to evade taxes partly not because they can't pay, but they don't wish their money to be used inefficiently. And this is the reason why I said this topic is hot. Still in introductory actually! hehe.

Human Rights and Country Law

Although part of our laws that we learnt are mostly regarding Business Law. But life is never all about business right. This is the recent video clips that I viewed that creates curiosity and questions regarding the law of justice in Malaysia.

I hope you guys can view it and tell me your opinion in terms of Law in Malaysia for this scenario while I hunt for more information regarding this issue. Kindly comment as doing a part for me to speculate. Thank you!

Doctrine of Utmost Good Faith

With lots of doctrine that our fellow lawyers have to know, and remember, we as the Business Law student should know it as well. In fact, the whole nation should be aware of this as this Doctrines are the one that is guiding us and helping us especially for human rights.

In insurance law, from the previous post, Doctrine of Utmost Good Faith is one of the most important element, not in other contracts, but solely on Insurance Contract. With the definition that, each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract, whether such information is requested or not.

AS simple as it is defines, it means a lot to make sure each and every word counts. In fact, good faith can be termed as genuine faith, and things that is genuine that is informed is to ensure trust from both parties. This is very important as the failure to fulfil or giving material information, will subject the other party to avoid the contract. As insurance contract are based on mutual trust, and with information definitely more well understood by each party, it is their job and responsibility to enlighten each other regarding it. The mutual trust and confidence bonding between the insured and the insurer can be termed as uberrimae fidei, the same meaning as utmost good faith.

A very important case of this can be adapted from the example of someone who had heart and lungs problem. However, though not disclosed in his life insurance, nothing happened until SARS strike through one day. The impact was heavy (as it is an acute pneumonia) causes the guy passed away due to it. And from the thorough inspection from the doctor with the report being given to the company, the company chose not to pay or compensate to the family because it is stated that the deceased did not notify that.

Thus, in this Doctrine, telling the right and actual information is very important. It is not like life that sometimes we can make assumptions, no, not a chance. And with that, do beware and keep your insurance agent knows everything bout you well.

Understanding Insurance Law

One of the key thing to understand insurance law as to compare with other laws will be what is the difference between INSURANCE and ORDINARY contract. This will sets a distinct understanding and for us to know better the content of what insurance law is all about.

In ordinary contract, the doctrine of utmost good faith (which we will have discussion on it later) is not applicable simply because other doctrine as mentioned earlier, remains dominance in the meaning. But in insurance law, the main key elements of it is DOCTRINE OF UTMOST GOOD FAITH. On the other hand, in ordinary contract, the INSURABLE INTEREST is not needed, while insurance contract, the insured must have insurable interest in the subject matter.

At some points, too many jargons are put on hold and you might not know what is it all about, like utmost good faith, insurable interest and etc. Here will be clarification part.

I will start with Insurable Interest! It is common that in everything we do, we could not get 100% guarantee or even warranty of everything. It is the same as risk, that not all of them can be insured by the insurance company but only the risks of an insurable interest. With that, the insurable interest stands in the meaning of interest (as with the things to be covered or wish to be taken care of, such as financially, the family n etc.) in the subject matter of a contract of insurance, and this gives the right to the insured to enforce the contract when things, unduly happened.

And let's put an example that S bought a life insurance from Company G. Apparently, one day, her house caught on fire due to someone accidentally flanked a cigarettes butt on her house garden. The whole house was destroyed nearly 50% of it, but S survived with minor injuries.
Let us speculate this situation that what is the insurable interest, with what can be and to be insured!
Answer: Insurable interest again, means the insurance are covering based on your interest of what to be cover. In this sense, as S bought only life insurance (which is her interest), she will be compensated based on things that incur to her life or health. But what about the destroyed house? Sorry to say is that, the house will no be insured, as that is not within her insurable interest. The minor injuries that she got will be insured but simply not the house, as she did not purchase the FireInsurance or etc.

But do not worry, as complicated as it sounds, Insurance Companies nowadays are thinking way ahead of us, not that they know that we will have those dangers, but their words are sweet to say 'it is a precautionary measure', or more proverb-ly sound, 'prevention is better than cure'. Companies nowadays, as mentioned in the previous post had many packages, which this will includes life, fire and some other elements, with our choice. For better or worse, we are more coward as compare to last time, we will buy the one with the highest probabilities.

Back to the topic is that, the amount of insurable interest is based on the pecuniary loss that was incurred. However, let's say you pay your car insurance yearly, and in the same year, you sold off your car, that transfer of ownership will mean that the insurable interest will no longer be valid. Let's speculate another scenario? As we know that Cyberjaya is popular with accidents, and second with renting cars. And let's say Abduh is a owner of many cars that he rents, and upon renting one of the car one day, someone who is racing and drifted his car into a ridge. The question is, will he be gaining his insurable interest?
Let's put some deeper thoughts on your mind, that Insurance Companies are not that stupid, as they will investigate the case that happen before releasing their payment to you, so how is it going to be?

Actually in this case, based on the Vehicle Insurance that Abduh possesed, with no transfer of ownership but just the matter of transfer of tenancy to the driver, he is entitled for the insurable interest. As according to Nanyang Insurance Co. Ltd. v. Salbiah, as long the ownership has not been transferred, Abduh still content for the insurable interest.
But it may be argued again that, that is Business or insurance for your business and it may not fit the category, and even worse, the business is not legal. Will he be insured?
At some point, based on Nanyang case, in fact, it is a different matter simply because this is for rental, and as far as business is concerned, without the legal rights, the insurer company can choose not to pay it. As again, speculate this issue!

Caveat Emptor: Sales of Goods Law

Before continuing on the long Insurance Act case, let's bring back to one of the most important element in the chapter of Sales of Goods. As we can realise that each and every lessons that is learnt throughout the course, have something to be remembered.

As thus far, from
Contract Law, we have Doctrine of Stare Decisis,
Company Law, we have Doctrine of Separate Legal Entitiy
Insurance Law, we have Doctrine of Utmost Good Faith, and
in this context we have Doctrine of Caveat Emptor.

Taken from the Latin language, Caveat Emptor simply means ' Let the buyer Beware '.

How cool was that? But sound rather vague..but let me clarify some stuffs regarding it.

From Wikipedia explanation it goes like this,

"Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud. Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of "merchantable quality". However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious"

What does it mean is simply that, sellers should bear in mind the important elements of telling the truth. Of course, you and I know that in the real world, people will say that you won't earn money if you are telling the truth. But what let the buyer beware tells is that, the buyer should know the products and at some point, it is the seller's responsibility to ensure that the product is merchantable, or sell-able. This is essentially important, as many of us, can fall into a trap that this cases is actually a fraud or misrepresentation case. And as so many bad cases around the world, the only best method to counter this, is that, the buyer although guarded by this doctrine, should be smart and wise to choose and pick the right things, and know the right stuff.

And speculating on a small issue, let's put my name in this scenario, fictional but can happen.

Eric is eating in a Mamak Stall, and is having his sumptuous Nasi Kandar (wuallaa!). Having to savor his meal halfway, the waiter who served him earlier, walked to his side and wrote on the bill and placed it below the cup of his drink. Enjoying his food to the optimum, Eric did not flip the paper or bothered on the price? He is just too into the food. Great!!! And later after maximizing his marginal utility, he went to the counter wanting to pay before realising that the bill noted RM 15 ++.

Oh he goes, 'WOW, watha" and recalled what he just ate.
A plate of rice, with muttons and carry on top. No vege, no papadum, nothing extra. Just rice and mutton and curies. And what did he drink: Ice Tea.

In this situation, some people will just go, "S**t,we got cheated and this is very expensive, but never bother asking". And this is why a lot of stalls are taking advantage. But having listen to a talk by Prof. Dr. Ishak, from Sime Darby Corporate Culture Team, he shared that, this is all within our will to, simply, ASK. He said, "I know you guys ate the food, and the guy might be complaining that you taken a lot of mutton (which apparently is always taken by them), and all sort of reason. But the courtesy is still to ASK, to KNOW and to caution our RIGHTS".

Thus, in this scenario, don't be afraid to stand up, we are not picking up a fight, but just to ask and know, and if they usually charges that way, simply don't go and eat there anymore. But if not, you may stand in the chance of not paying that much.

FYI: Caveat venditor is Latin for "let the seller beware". It is a counter to caveat emptor and suggests that sellers can also be deceived in a market transaction. This forces the seller to take responsibility for the product and discourages sellers from selling products of unreasonable quality. In the landmark case of MacPherson v. Buick Motor Co. (1916), New York Court Appeals Judge Benjamin N. Cardozo established that privity of duty is no longer required in regard to a lawsuit for product liability against the seller. This case is widely regarded as the origin of caveat venditor as it pertains to modern tort law in US.

Introduction: Insurance Law

One of the key issues pertaining to Insurance Law that first bump into your mind will be, the insurance package that we buy, and we want to preserve our rights from being cheated by those agents. That is the layman term I can say.

But in our context of insurance law, we shouldn't just think of how we can have our a**e taken care, but at the same time, we should go to the core of why is Insurance needed. At least, for the lawyers, they know they are valued for their efforts in studying this law.
First and foremost is simple, the reason we need law is that, we wanted to counter the risk that we are having. They are plenty of risks out there, in the scope of just human rights and life (nothing to do with any financial or etc. stuff), is that even staying in a house can be a risky thing. You never know that with the Will of God, something may happen to you, isn't it?

Thus as for that, and as humans get more complicated ever since the Mesopotamian civilization, humans become more skeptical and coward. I don't mean coward, as those really coward, but in the sense, the worry more things (even unneccesary stuffs). Thus, some brilliant guys thought of, why not given some protection to this scaredy fellows, and earn some of it. Thus, two group of people discover their own products but gets more complicated First, is to give me some money, I'll pay you back and insured your losses if anything happens. With the traditional whole life insurance, where 100% of the money will be used to insured your losses, some insured people take advantage. And as the human cycle life go, you take it, I'll take it back. Thus, this business idiots come out with the term of insurance packages which include certain investment scheme, and different types of rather confusing insurance. And there you go, the first story done.

As the story goes by, the second group of people came in and still exist even until now. They will take money for you, and provide you personal protection. Not in terms of your health or house or anything. But what is it then? Oh, it is called Gangsters' Insurance (GI), whereby you pay the money to take care of your well-being and your house, even you don't want, you are forced to in their territory. Thus, their most developed products include GI JOE. Nah, just for the fun of writing.

Alright back to the serious topic, from our Malaysian Insurance Act 1996 quoted:
" An act to provide new laws for the licensing and regulation of insurance business, insurance broking business, adjusting business and financial advisory business and other related purpose "

This act is important as insurance is not something that is done as with goodwill, but definitely with a cost. There are never free lunch in this world we should know that. With that, this business propels to make profit especially on how those actuaries had worked so much to help those insurance companies earn their biggest deal. With many types of insurance, the general common ones are life insurance, marine insurance, fire insurance, accident insurance, motor insurance and aviation insurance.

And looking on the LAW side of it, which is why we learn this law, is that, CONTRACT. This word is common but very meaningful in a lot of ways, especially in law. Definitely, how is an insurance contact is made upon?
Answer is: A contract of insurance is a contract whereby one person, called the insurer, agreesto indemnify another person, called the insured, against a loss which may arise upon the occurrence of the particular event.

And with that contract, it will come in attached with information on that contract called as a 'policy' or in layman terms, terms and conditions.

With that 'policy', it will define the types of insurance that is covered. And as mentioned, payment have to be made, and that payment is called 'premium'. With the losses that is going to be insured as stated in the policy, is the 'risk'.

And this shall be the introduction of Insurance Law before we go on further.