Unfair contract terms act 1977: Does it provide a good model in regulating risk allocation provisions in oilfield contracts in Malaysia?

Wan Zulhafiz

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

The unequal bargaining power of the parties in the oil and gas industry has lead to the imbalanced contractual risk allocation in oilfield contracts in Malaysia. In this regard, there is a prospect that the operators pass an unfair share of the risks on to the contractors. However, the contractors might still enter into such imbalanced agreement to secure a job and thereby assume these risks. In this paper, it is argued that a statutory controlling mechanism, such as Unfair Contract Terms Act 1977 (UCTA) in the UK, should be adopted to protect the liability of the contractor in relation to the risk allocation provisions of oilfield contracts in Malaysia. This paper seeks to analyse the deficiencies of the risk allocation provisions of oilfield contracts in Malaysia and to consider whether the principle of reasonableness test as provided in UCTA could provide a potential solution. It will employ a combination of case study and analysis.

Original languageEnglish
Pages (from-to)3-16
Number of pages14
JournalInternational Journal of Trade and Global Markets
Volume8
Issue number1
DOIs
Publication statusPublished - 2015

Fingerprint

Risk allocation
Malaysia
Contractors
Liability
Oil and gas industry
Bargaining power
Operator

Keywords

  • Contract law
  • Exemption clause
  • Indemnity
  • Malaysia
  • Oil and gas
  • Oilfield contracts
  • Principle of reasonableness
  • Risk allocation
  • Unfair terms

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business and International Management

Cite this

@article{564664a2b2bc4cf991ce486ff0ce99f4,
title = "Unfair contract terms act 1977: Does it provide a good model in regulating risk allocation provisions in oilfield contracts in Malaysia?",
abstract = "The unequal bargaining power of the parties in the oil and gas industry has lead to the imbalanced contractual risk allocation in oilfield contracts in Malaysia. In this regard, there is a prospect that the operators pass an unfair share of the risks on to the contractors. However, the contractors might still enter into such imbalanced agreement to secure a job and thereby assume these risks. In this paper, it is argued that a statutory controlling mechanism, such as Unfair Contract Terms Act 1977 (UCTA) in the UK, should be adopted to protect the liability of the contractor in relation to the risk allocation provisions of oilfield contracts in Malaysia. This paper seeks to analyse the deficiencies of the risk allocation provisions of oilfield contracts in Malaysia and to consider whether the principle of reasonableness test as provided in UCTA could provide a potential solution. It will employ a combination of case study and analysis.",
keywords = "Contract law, Exemption clause, Indemnity, Malaysia, Oil and gas, Oilfield contracts, Principle of reasonableness, Risk allocation, Unfair terms",
author = "Wan Zulhafiz",
year = "2015",
doi = "10.1504/IJTGM.2015.067969",
language = "English",
volume = "8",
pages = "3--16",
journal = "International Journal of Trade and Global Markets",
issn = "1742-7541",
publisher = "Inderscience Publishers",
number = "1",

}

TY - JOUR

T1 - Unfair contract terms act 1977

T2 - Does it provide a good model in regulating risk allocation provisions in oilfield contracts in Malaysia?

AU - Zulhafiz, Wan

PY - 2015

Y1 - 2015

N2 - The unequal bargaining power of the parties in the oil and gas industry has lead to the imbalanced contractual risk allocation in oilfield contracts in Malaysia. In this regard, there is a prospect that the operators pass an unfair share of the risks on to the contractors. However, the contractors might still enter into such imbalanced agreement to secure a job and thereby assume these risks. In this paper, it is argued that a statutory controlling mechanism, such as Unfair Contract Terms Act 1977 (UCTA) in the UK, should be adopted to protect the liability of the contractor in relation to the risk allocation provisions of oilfield contracts in Malaysia. This paper seeks to analyse the deficiencies of the risk allocation provisions of oilfield contracts in Malaysia and to consider whether the principle of reasonableness test as provided in UCTA could provide a potential solution. It will employ a combination of case study and analysis.

AB - The unequal bargaining power of the parties in the oil and gas industry has lead to the imbalanced contractual risk allocation in oilfield contracts in Malaysia. In this regard, there is a prospect that the operators pass an unfair share of the risks on to the contractors. However, the contractors might still enter into such imbalanced agreement to secure a job and thereby assume these risks. In this paper, it is argued that a statutory controlling mechanism, such as Unfair Contract Terms Act 1977 (UCTA) in the UK, should be adopted to protect the liability of the contractor in relation to the risk allocation provisions of oilfield contracts in Malaysia. This paper seeks to analyse the deficiencies of the risk allocation provisions of oilfield contracts in Malaysia and to consider whether the principle of reasonableness test as provided in UCTA could provide a potential solution. It will employ a combination of case study and analysis.

KW - Contract law

KW - Exemption clause

KW - Indemnity

KW - Malaysia

KW - Oil and gas

KW - Oilfield contracts

KW - Principle of reasonableness

KW - Risk allocation

KW - Unfair terms

UR - http://www.scopus.com/inward/record.url?scp=84931828394&partnerID=8YFLogxK

U2 - 10.1504/IJTGM.2015.067969

DO - 10.1504/IJTGM.2015.067969

M3 - Article

VL - 8

SP - 3

EP - 16

JO - International Journal of Trade and Global Markets

JF - International Journal of Trade and Global Markets

SN - 1742-7541

IS - 1

ER -