Towards the Acceptance of Culpa in Contrahendo Under Malaysian Contract Law

The law of contract law has to evolve parallel with the progress of civilization in order to remain relevant and appropriate in handling new contractual related issues. On the other hand, the Contracts Act 1950 (Act 136) which regulates the contractual relationship in Malaysia continued to be enforced without any significant amendment since it was first enacted in 1899. This was due to over reliance on English common law traditions and firm believes on the ideology of liberalism which underlies the Act. As a result, the common law principles were blantantly used to address the lacunae in the law while other principles which are incompatible with the common law were totally abandoned. One of the abandoned doctrines is culpa in contrahendo. This important doctrine recognised and an enforced pre-contractual obligation so that those who take part in negotating a contract does not take any adverse action before a contract is concluded. Pre-contractual obligations are not recognized under the common law because of the uncertainty that present during the negotiation process. The ideology of classical liberalism, which emphasizes the principles of freedom of freedom of contract add further constraints on the recognition of pre-contractual liability in Malaysia. This study argues that there is no legal basis in rejecting culpa in contrahendo. Hence, the objective of this study was to determine the admissibility of this doctrine into Malaysia contract law. For this purpose, this doctrinal study employed historical, jurisprudencial, comparative as well as analytical and critical approach and literature review as the main techniques of data collection. This study begins with the position of pre-contractual liability in Malaysia and followed by an analysis of the factors that hinder its recognition under the law of contract in Malaysia. Comparison was also made on the position of pre-contractual liability in selected countries such as England, Singapore and Australia, including under the Convention United Nations on Contracts International Sale of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts. In the end, this study ultimately proposed a harmonized framework that recognised culpa in contrahendo under Malaysian contract law.