JM Chong Vincent Chee & Co Advocates & Solicitors JMCVC

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JM Chong Vincent Chee & Co Advocates & Solicitors JMCVC

Established legal firm delivering quality and tailored legal services to valued clients since 1986.

30/05/2026

: Legal Term of the Day: Liquidated Ascertained Damages (LAD)

Liquidated Ascertained Damages refer to a genuinely pre-estimated sum of financial compensation agreed upon by contracting parties at the time of entering into an agreement, to be paid in the event of a specific breach. A classic application in Malaysia is found under the Housing Development (Control and Licensing) Regulations, where housing developers are statutorily mandated to pay LAD to home purchasers for any late delivery of vacant possession. This mechanism removes the procedural burden of having to prove actual financial loss in court, providing a clear, contractually fixed remedy for project delays.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

30/05/2026

: Legal Term of the Day: Clawback

A clawback is a legal process that enables an insolvency officeholder or liquidator to recover assets, monies, or property that were unfairly transferred or disposed of prior to a company's liquidation or an individual's bankruptcy. These recovery mechanisms target transaction structures such as undue preferences or transactions at an undervalue executed within specific statutory look-back windows under the Insolvency Act 1967 or the Companies Act 2016. The objective of this legal framework is to protect the general body of unsecured creditors by reversing inequitable pre-insolvency asset depletions and restoring the estate's financial balance.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

30/05/2026

: Legal Term of the Day: Exculpatory Clause

An exculpatory clause is a specific provision within a contract that seeks to limit, exclude, or pass on liability for certain acts, losses, or legal wrongdoings arising during the performance of the agreement. It effectively operates as a preemptive waiver where one contracting party agrees to relinquish their right to sue the other party if specific operational risks or financial damages manifest. The legal enforceability of these clauses heavily depends on precise drafting and statutory consumer protection boundaries, as courts closely scrutinize any terms that attempt to completely absolve a party from its own gross negligence.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

30/05/2026

: Legal Term of the Day: Mens Rea

Mens rea translates from Latin as the guilty mind and represents the mental or subjective element necessary to establish a criminal offense. It requires the prosecution to prove the underlying intention, knowledge, or recklessness of the accused person at the time the prohibited act was committed. To secure most criminal convictions, the legal framework demands the concurrent existence of both a physical act and this specific mental state, ensuring that accidental or entirely involuntary actions are not unfairly criminalized.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

30/05/2026

: Legal Term of the Day: Actus Reus

Actus reus refers to the physical or objective component of a criminal offense, translated from Latin as the guilty act. For criminal liability to attach, the prosecution must prove that the accused engaged in a physical act, omission, or state of affairs that is strictly prohibited by law. It forms one of the two core pillars of criminal jurisprudence, establishing that a person cannot be penalized for thoughts alone without an accompanying physical manifestation of the crime.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

21/05/2026

: Legal Term of the Day: Public Company
Under the Companies Act 2016, a public company is a distinct corporate entity that is legally permitted to offer its shares or debentures to the general public. Unlike a private company, which is restricted to a maximum of fifty shareholders and cannot invite the public to subscribe for its shares, a public company has no upper limit on the number of members it can have. A public company can be easily identified by its corporate suffix, which ends with Berhad or its abbreviation Bhd, as opposed to Sendirian Berhad or Sdn Bhd for private entities.

The ability to raise vast amounts of capital from the public comes with a much higher burden of statutory compliance and regulatory oversight. Public companies are subject to strict transparency requirements, including the mandatory disclosure of financial statements, the holding of annual general meetings, and higher standards of corporate governance for its directors. If a public company chooses to take the further step of listing its shares on the stock exchange, such as Bursa Malaysia, it becomes a public listed company. This status triggers an even denser layer of regulation, including continuous compliance with listing requirements, quarterly financial reporting, and immediate public disclosure of any material corporate developments.

For legal practitioners and corporate strategists, structuring or advising a public company requires a meticulous understanding of both securities laws and corporate compliance frameworks. The transition from a private company to a public one is a major milestone that transforms how a business operates, shifting the balance from private control to public accountability. Failing to strictly adhere to the statutory disclosures and governance rules mandated for public companies can result in severe regulatory penalties, market suspensions, and criminal liability for the management team and board of directors.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

18/05/2026

: Legal Term of the Day: Absolute Privilege

Absolute privilege is a powerful and complete defense in the law of defamation. It grants a person total immunity from liability for making defamatory statements, regardless of whether those statements are false, harmful, or even made with actual malice. This absolute protection exists because public policy dictates that in certain specific arenas, the need for complete freedom of speech and unfettered communication far outweighs an individual's right to protect their reputation.

The primary areas where this privilege applies are judicial and parliamentary proceedings. Statements made by judges, lawyers, witnesses, and litigants in the course of court proceedings are completely protected to ensure that the administration of justice can function without the fear of retaliatory lawsuits. Similarly, legislators enjoy this privilege for speeches made on the floor of the house to facilitate open, robust legislative debate. Official reports and transcripts of these proceedings also generally share this high level of protection.

For legal practitioners, understanding the exact boundaries of absolute privilege is vital when advising clients who believe they have been defamed. While the protection is incredibly broad within its proper domain, it does not extend to statements made outside official channels, such as remarks made to reporters on the court steps or comments published on social media. Meticulously verifying whether a statement was truly made within a protected occasion is the first step in determining whether a defamation claim can be successfully pursued or if it will be immediately dismissed.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

18/05/2026

: Legal Term of the Day: Derogation

In legal terms, derogation refers to the partial suppression, relaxation, or exemption from a law, treaty, or contractual obligation. Unlike a total repeal which completely abolishes a law, a derogation allows for a rule or right to be bypassed or limited under very specific and controlled circumstances. This concept is vital across various legal fields, acting as a mechanism that balances strict legal rules with the practical realities of changing circumstances or emergencies.

One of the most common applications of this concept in commercial and property law is the principle of non-derogation from grant. This common law doctrine essentially dictates that a person cannot give something with one hand and take it back with the other. For instance, if a landlord leases a commercial property to a tenant specifically for running a restaurant, the landlord cannot later take actions on the surrounding premises that make it legally or practically impossible for that restaurant to operate. Doing so would constitute a derogation from the original grant, making the landlord liable for a breach of an implied contractual obligation.

In the wider legal landscape, derogation also appears frequently in statutory interpretation and constitutional law. When a legislative body drafts a statute that seeks to derogate from established common law rights or fundamental liberties, judges will interpret that statute strictly, ensuring that the existing rights are not chipped away unless the legislative intent is crystal clear. For legal practitioners, identifying whether a contractual clause or a new piece of legislation attempts to derogate from an existing right is crucial for evaluating liability and protecting a client’s core interests from being subtly undermined.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

13/05/2026

: Legal Term of the Day: Fiscal Year

A fiscal year, also commonly known as a financial year, is a period of twelve consecutive months used by a company or a government for financial reporting, budgeting, and tax purposes. Unlike the calendar year which always runs from January to December, a fiscal year can be tailored to suit the specific operational cycle of a business. In Malaysia, the Companies Act 2016 provides companies with the flexibility to determine their own financial year end, allowing them to align their reporting periods with their peak business seasons or international parent company cycles.

The choice of a fiscal year has significant legal and compliance implications. It determines the deadlines for crucial statutory obligations, such as the filing of audited financial statements and the submission of the annual return to the Companies Commission of Malaysia. From a tax perspective, the Inland Revenue Board uses the fiscal year as the basis period for assessing corporate income tax. Once a company establishes its financial year end, any subsequent change to that date requires formal notification to the regulators and may result in a shortened or extended basis period for tax assessment, which requires careful planning to avoid late filing penalties.

For legal practitioners and corporate secretaries, managing the fiscal year cycle is a core part of corporate governance. It provides the timeline for declaring dividends, holding annual general meetings, and ensuring that the board of directors meets its fiduciary duty to provide a true and fair view of the company’s financial health. Proper alignment of the fiscal year with a company's actual business activities ensures that financial statements are a meaningful tool for stakeholders rather than just a bureaucratic hurdle. Failing to meet the statutory deadlines tied to the fiscal year can lead to compound fines for the company and its directors, making it a critical date on any corporate calendar.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

11/05/2026

: Legal Term of the Day: Bar Council

The Bar Council is the executive body of the Malaysian Bar, established under the Legal Profession Act 1976 to manage the affairs and execute the functions of the Bar. While the Malaysian Bar consists of all advocates and solicitors in Peninsular Malaysia, the Bar Council acts as its governing heart, consisting of members elected from across the country. Its primary mandate is to regulate the legal profession, ensuring that practitioners maintain the highest standards of professional conduct and ethics. This includes the issuance of the annual practicing certificate, which is a mandatory requirement for any lawyer to legally appear in court or provide legal services in Malaysia.

Beyond administrative management, the Bar Council plays a pivotal role in the broader legal ecosystem by advocating for the rule of law and the independence of the judiciary. It serves as a critical voice in the legislative process, often providing feedback on proposed laws and intervening in court cases that involve significant public interest or constitutional issues. The Council also manages the Compensation Fund, which protects the public against the loss of money or property due to the dishonesty of a lawyer, and oversees the legal aid schemes that ensure even the most vulnerable citizens have access to justice.

For legal practitioners, the Bar Council is both a regulator and a representative body. It provides the framework for continuing professional development and sets the rules for legal practice through various rulings and guidelines. Understanding the role of the Bar Council is essential for both the public and the profession, as it ensures the integrity of the legal system and maintains the trust of the community in the administration of justice.

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance.

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