The Capital Hill Council (the council) decides to computerise the system by which it taxes local businesses. Fred, the town clerk, speaks to a number of local computer specialists, but is most impressed by Brilliant Sdn Bhd. He receives their terms and conditions by fax. Unfortunately the fax is unreadable. Nevertheless, Fred signs the reply slip and posts it back. The slip is lost in the post.

The terms and conditions contain the following clauses:

1. This contract contains no terms implied by law.

2. Any losses for which Brilliant Sdn Bhd are liable will be limited to RM25,000.

3. No responsibility will be taken for any injury or damage due to the negligence of Brilliant Sdn Bhd, its employee or agents.

Simon installs the system on behalf of Brilliant Sdn Bhd. Unfortunately, the software is unable to cope with the demands of the Council and charges only half the local businesses the relevant tax. This leaves the Council with a deficit of RM500,000 plus a fine of RM10,000 from central government for overspending. Fred calls Simon in to fix the computer, but he is unable to solve the problem. In frustration, Simon hits the computer, which promptly explodes, badly injuring Fred and wrecking the office, causing damage of RM15,000.

Advise the Council

(Malaysia Business Law)