Abstract
Myanmar has recently been the focus of investors, who have referred to the country as the final paradise for foreign investment entry. But its law adheres to the “Indian Code” that was transplanted during the British colonial era. For the future law reform, comprehensive systemization work is necessary. The contract laws around the world are struggling towards the same direction of contemporary modifications, while burdened with their different traditions, in the context of correcting the contractual asymmetry and making contractual freedom effective. Myanmar’s future contract law reform must also accept the doctrines which are the consummation of current international trends, but it should be formed within the Myanmar’s own terminology of jurisprudence.
Yuka Kaneko—Professor, Law and Development Program; Graduate School of International Cooperation Studies; Kobe University, Japan; LL.B. Tokyo University; LL.M., Georgetown University; LL.D. Kyushu University.
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Notes
- 1.
All volumes of the English-language Burma Law Reports of Supreme Court judgments that were collated during this period are currently available on the Myanmar Supreme Court’s website (http://www.unionsupremecourt.gov.mm/).
- 2.
This chapter mainly refers to the annotated versions of the 1872 Contract Act by Whitley Stokes, the legal adviser to the Viceroy’s Council and drafter of the final version of the Act (Stokes 1887, 1887–8, 1891), and the annotated versions by Frederick Pollock and Dinshah Fardunji Mulla (Pollock and Mulla 1909, 1919).
- 3.
Based on the draft by F. Stephen.
- 4.
The 1872 Contract Act is strongly criticized by F. Pollock as being heavily influenced by the New York Civil Code . Pollock and Mulla (1909), p. 64.
- 5.
In an exchange of dispatches quoted in pp. xv–xvii of Stokes (1887), Lord Salisbury feared that “because of the fragmentation of the Indian Codes, it allows the arbitrary formation of law based on local customs by parties and first instances judges who do not understand English law” and argued the necessity of a more genuine codified system. The Government of India’s response that “even if the law is partially codified, there is value in it providing a method to understand the obscure and contradictory English common law ” is also provided.
- 6.
See Stokes (1887), pp. 19–20.
- 7.
See Pollock and Mulla (1919), pp. 5–9.
- 8.
During the process of drafting the specific relief law, the proposal that gave preference to specific relief over the payment of damages was applied due to the background of demands based on the sudden rise in economic power of the Indian people (the need to apply the law to breach of employment contracts against the background of the enhanced labor movement of dock workers), but eventually returned to a design that gave preference to the payment of damages over specific relief, as was the same in English law.
- 9.
Drafted by M.D.E.S. Chalmars.
- 10.
In the first addendum (Stokes 1887–8), explanatory judgments on implied contracts, relaxation of consideration , restrictions on ascension clauses in bills of lading, disclosure obligations in insurance contracts, objective definition of the factual requirements of undue influence in Section 16, and unconscionable bargaining in Section 23 were introduced as the latest trends in English case law; this largely addressed the legal intervention in the freedom of contract that had become a problem. In the second addendum (Stokes 1891), the preface states that “many omissions were found particularly in the area of contract law ” (p. 24), and the stance of analyzing the problems while using actual judgments from the Calcutta, Madras and Bombay High Courts as material is very interesting. Within these points of issue that have a practical concern are picked up, including an explanation of unconscionability, voidance of agreements in restraint of trade (Section 27), evidentiary requirements to prove commercial customs, validity of contracts by minors, capacity for wives to take independent action in India (which wives in England could not) and a high interest rate of 37% for breach of contract (Section 74).
- 11.
See Kusumoto (1970).
- 12.
The 1963 contract law revision was limited. However, the revision of the Specific Relief Act in the same year expanded specific relief.
- 13.
Information confirmed in a research exchange meeting with contract law specialists under Dr. Mi Khin Saw Aung of the Dagon University Department of Law on 24 January 2017.
- 14.
With reference to Forchhammer’s English version of King Wagaru’s Manudhammasattham.
- 15.
See Okudaira (1986), pp. 114–124.
- 16.
In interviews with the Secretary-General of the Supreme Court and the vice-secretary of the Justice Ministry on 21–22 March 2016, contract law was not included in the priority list of reform.
- 17.
Otherwise, this will end in the unfortunate result of most investors selecting a foreign country’s law as the applicable law in Myanmar courts. See Burrows Id., p. 2.
- 18.
There were only 15 cases recorded in the Supreme Court judgments from 1948 to 1962 that concerned the 1872 Contract Act and 1930 Sale of Gods Act, and each of them delivered judgments based on English common law . However, there were examples of cases concerned with the 1892 Transfer of Property Act that referred to Myanmar’s own precedents (for example, the 29 November 1959 Supreme Court judgment B.L.R. [1959] p. 179).
- 19.
Former Attorney General Hla Aung found that legislation borrowed from the West is not fixed within local society, and it is a good opportunity for legislative reform that systematically revises the shackles of English law. See Hla Aung (2008), pp. 95–97.
- 20.
Stokes, Id., p. 497; Pollock and Mulla (1919), pp. 16–32 explain the definition of “consideration ” in Section 2(d)–(f) of the Contract Act and emphasize it is a requirement of business in advanced society.
- 21.
See Pollock and Mulla, Id., pp. 29–32.
- 22.
See Pollock and Mulla, Id., pp. 19–25.
- 23.
The drafters of the Indian Code planned an effective tax collection system so that the Zamindari, who were both landowner and tax collector, could jump across several levels of telescopic sublease and security relationships to directly claim from the actual holder of farming rights, which explains the relaxation of the doctrine. Pollock and Mulla, Id., p. 22. However, in India there was no relaxation via statute like in England, so the privity doctrine was maintained via the operation of the case law.
- 24.
Daw Po v U Po Hmyin (1940) RLR 239, Burma (Government Security) Insurance Co Ltd v Daw Saw Hia (1953) BLRHC 350 and other cases referred to in Burrows Id., p. 7.
- 25.
See Pollock and Mulla, Id., pp. 26–27.
- 26.
See Pollock and Mulla, Id., pp. 27–29.
- 27.
In a decision dated 24 June 1950 (B.L.R. [1950] p. 227), the Supreme Court questioned whether there was receipt and its effect concerning repayment via deposit of an equivalent amount in Japanese military currency. In a decision dated 29 March 1954 (B.L.R. [1954] p. 19), the Supreme Court questioned the effect of receipt when performance in installments was late.
- 28.
- 29.
The Law Commission of India (1958) added the release, concession, etc. of prior debts to the list of items not requiring consideration .
- 30.
The way that the Netherlands’ 1992 Civil Code removed cause on the one hand, but also newly established a General Law of Property Law that introduced the abstract concept of legal acts and provided a better interpretive base for fair and equitable principles has been discussed long ago. Hartkamp (1994), Honduce (1994), etc.
- 31.
In Kepong Prospecting Ltd v Schmidt [1968] AC 810, the issue of the application of the privity doctrine in Malaysia was appealed to the English Privy Council, which confirmed the applicability of the doctrine. Malaysia removed the ability to appeal to the English courts in 1986 and the Federal Court of Malaysia became the final appellate court, but it still continues to refer to English law.
- 32.
B.L.R. [1949] p. 56.
- 33.
B.L.R. [1951] p. 25.
- 34.
As other noteworthy Supreme Court decisions out of the few cases in the Burma Law Reports that concern contract law , there was a decision concerning the “substance of a contract” that determined whether delayed performance addressed in Section 55 of the Contract Act in a land transaction permitted a remedy of termination or damages (1 March 1950 decision at B.L.R [1950] p. 98), as well as decisions that recognized frustration (Section 56) and restitution (Section 65) in trade transactions that were hindered by the post-independence economic controls (24 October 1951 decision at B.L.R [1952] p. 65; 9 March 1953 decision at B.L.R [1953] p. 9), but in each of these the decision was based upon English precedents and there were no other cases showing an intention to form independent case law.
- 35.
For example, Bangladesh, which inherited the same 1872 Contract Act, added documentation, witnessing and registration as requirements of a contract (Section 10).
- 36.
See Pollock and Mulla, Id., p. 69. Also see the Law Commission of India’s “13th Law Commission Report ” (pp. 18–21, 35–37).
- 37.
Commentary on the Indian Code deals with a mistake by one party by simply stating that it was a debated point in the past, but currently “a proposition which no competent lawyer would think of asserting” (Pollock and Mulla, Id., p. 142).
- 38.
See Pollock and Mulla, Id., p. 134.
- 39.
The 1992 Dutch Civil Code, aware of Anglo-American case law, adopts this way of thinking in Article 6:228.
- 40.
As of 24 January 2017, the author could not receive an answer regarding case law on this point in an interview with six judges of the West Yangon District Court.
- 41.
Illustration (g) provides an example of an agreement being void due to implied fraud arising from insufficient provision of information during the contract formation process.
- 42.
See Pollock and Mulla, Id., p. 97 onwards.
- 43.
In Pollock and Mulla, Id., p. 112, the authors strongly warn against the trend of lower courts departing from the strict application of Section 16.
- 44.
In Pollock and Mulla, Id., pp. 99–106, a large number of Indian cases are discussed regarding the requirement for proof in Section 16(2) and introduces points of contention, such as Hindu women generally being psychologically weak and wealthy people generally being in a dominant position.
- 45.
See Saintier (2016), p. 129.
- 46.
See American Law Institute (1981) Restatement (Second) of Contracts, Section 208. However, this doctrine only applies to consumer contracts.
- 47.
See Waddams (1976), p. 369.
- 48.
The doctrine of “inequality of bargaining power” developed in the 1974 case of Lloyds Bank v Bundy was rejected in the 1988 case National Westminster Bank v Morgan. See Zhou and DiMatteo (2016), p. 363.
- 49.
The provision prohibiting the restraint of rights to commence legal proceedings was revised in 1997.
- 50.
The Indian Sale of Goods Act was subject to minor technical revisions in 1963.
- 51.
Sales contracts are formed from the exchange of property for money. The phrase “money as consideration ” used in the 1893 English Act (Section 1) has been removed.
- 52.
Myanmar’s 1930 Act removed the provision of the 1893 U.K. Act (Section 2) that validated the sale of “necessities” to persons with limited capacity to contract. It would appear that it is treated as being void under the general principles of the 1872 Contract Act (Section 11).
- 53.
As an exception to the principle of freedom of the form of contract, the 1893 U.K. Act (Sections 4 and 5) requires an act such as documentation or part payment in the case of a high-value transaction. Myanmar’s 1930 Act eliminated this special rule and makes freedom of the form of a contract uniform. The U.K. 1979 Act is of the same effect.
- 54.
The 1893 U.K. Act (Sections 11 to 14) is followed entirety. The 1979 U.K. Act revised these provisions as described below.
- 55.
In the 1893 U.K. Act, transfer of ownership occurs when the goods are identified by agreement (Section 16, Section 18 Rule 5), when delivered from the seller to a carrier (Section 32), etc. This is followed in the 1930 Myanmar act also (Section 18, Section 23(1), etc.).
- 56.
In the 1893 UK Act, although the sale of another person’s property is invalid in principle (Section 21), a good faith buyer in a market transaction has priority (Section 22), a good faith buyer of a voidable title has priority (Section 23), the sale of stolen goods is invalid in principle, but if fraud is involved it returns to rule of giving priority to a buyer of good faith (Section 24) and a good faith buyer who trusted the long-term possession of the seller/former buyer will take priority (Section 25). Of these provisions, Myanmar’s 1930 Act takes more simply seller-friendly stance, removing the provision on invalidation of the sale of stolen goods of the U.K. Act (Section 24) to make such sales valid, and adopted the other provisions.
- 57.
In the U.K. Sale of Goods Act 1893, in the case of incomplete performance by the seller, if the buyer voluntarily accepts the goods then the full amount must be paid (Section 30). Transfer of title and risk occurs when the seller delivers the goods to the carrier (Section 32). Criteria for inspection, notification and delay of acceptance by the buyer are detailed (Sections 34 to 37). The seller’s lien in case of buyer’s defaulting on the payment obligation and the seller’s right of stoppage in the case of the in buyer’s insolvency are described in detail (Sections 39 to 46), while these seller’s rights are defeated if the buyer sells or pledges the goods to a good faith party for value (Section 47) and relief will be in the form of damages (Section 48). Myanmar’s 1930 Act almost entirely follows these provisions.
- 58.
Under the U.K. Sale of Goods Act 1893, the buyer cannot reject the goods due to a breach of warranty alone, but is entitled to relief through reduction of the purchase price or damages (Section 53(1)) and the so-called “perfect tender” rule is not adopted. The grounds for calculation of damages are defined as limited to directly caused losses (paragraphs (2) to (4)).
- 59.
The U.K. Sale of Goods Act 1893 (Section 55) states that contractual rights and obligations can be negative or varied by the express agreement or course of dealing between the parties. Myanmar’s 1930 Act follows this. The U.K. 1979 Act revised the provision as described below.
- 60.
Zhou and DiMattea (Id., p. 368) emphasize that the drafter Chalmers based it upon the codification of established case law only. Chalmers (1894), p. iv.
- 61.
The United Nations Guidelines for Consumer Protection appeared in the 1980s and has since been revised, including a recent revision via a UN General Assembly resolution (70/186) in 2015. The general principles (Article 11) provide principles such as fair and equitable treatment as benchmarks in consumer protection, and the establishment of contract law and relief mechanisms as part of the obligations of the Member States (Article 14). As an approach to protecting the interests of consumers (Chapter C), it promotes the strengthening of private law responsibilities in the area of contract law (quality assurance in Article 23, unfair contract terms, etc. in Article 26) in addition to administrative regulations, backed up with a public quality standard certification system (Chapter D) and strengthening the judicial processes and alternative dispute resolution systems that ultimately realize the implementation (F Chapter).
- 62.
In addition to other topics such as consumer finance and debt collection (Chapter 1), safety regulations (Chapter 2), product liability (Chapter 6) and the interface with competition policy (Chapter 7), the ASEAN Consumer Protection Digests and Case Studies: A Policy Guide (Volumes I and II) published in 2014 deal with “statutory guarantees of quality in the supply of goods and services to consumers” (Chapter 11) as an issue related to the seller’s warranties.
- 63.
The Guidelines for Notification and Information Exchange on Recall/Banned Products and Guidelines for Selection and Implementation of Competent Redress Mechanisms were published in 2013.
- 64.
Referring to Section`s 14–18 of Brunei’s 1999 Sale of Goods Act, Sections 5–9 of Malaysia’s 1999 Consumer Protection Act 5-9, Singapore’s 1979 Sale of Goods Act and 2003 (revised in 2009) Consumer Protection (Fair Trading) Act and the Philippines’ 1992 Consumer Act.
- 65.
Vietnam’s 2005 Commercial Law defines that transactions should be conducted using the contract forms provided by the administrative agency for each type of contract, and breaches are subject to severe administrative penalties.
- 66.
In Vietnam, support for drafting and implementing a Civil Code and other legislation by Japan’s Official Development Assistance (ODA) has continued for more than 20 years from the mid-1990s until today.
- 67.
While the contract interpretation rule expressed in the judgment of Lord Hoffman in Investors Compensation Scheme Lit. v. West Bromwich Building Society ([1998] 1 WLR 896 HL) was an opportunity to display the effect of “contextualism”, the limited view is deeply-rooted that Lord Hoffman’s rule does no more than take into account the correction of harm caused by literal construction and restate the traditionally used standard of “reasonableness”. In recent years there has been a case that expressly addressed the principle of good faith (Yam Seng Pte. Ltd. V. International Trade Corporation [2013] EWHC 111), but rather than imposing the principle of good faith as an implied rule in contracts, it stops at identifying it as being in the wording of the contract between the parties.
- 68.
According to the author’s January 2017 interview of staff at the Ministry of Commerce, the Ministry is drafting new trade law legislation, but there are no lawyers in the drafting members and no consideration is being given to the 1872 Contract Act or the 1930 Sale of Goods Act. This is very problematic from a viewpoint of systemization of the law.
- 69.
See Hla Aung (2008), p. 96.
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Kaneko, Y. (2019). Contract Law in Myanmar: An Outcome of British Colonial Law. In: Kaneko, Y. (eds) Civil Law Reforms in Post-Colonial Asia. Kobe University Monograph Series in Social Science Research. Springer, Singapore. https://doi.org/10.1007/978-981-13-6203-3_2
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