In this article we cover the Law on Unfair Contract Term in Cambodia, which is relevant as of April 2023 in Cambodia. This law is just one of the many laws that we keep up to date on our business and investment platform’s Library of Laws section, which you can view here. For more information about business advisory in Cambodia and the wider region, contact us here.
What is the law on unfair contract term under the Cambodian law on consumer protection?
The law on unfair contract term in Cambodia comes under the consumer protection law, and was adopted on 1 March 2022 to protect the consumer rights against any excessive exploitation of profits and situations in relation to the contractual relationship.
The contractual relationship in this case is between consumers and business operators via standard contract for the provision of goods and/or services in the Kingdom of Cambodia.
What is the scope of application regarding the law on unfair contract term in Cambodia?
The law on unfair contract term in Cambodia applies to all types of standard form contract made for the provision of goods and/or services in the Kingdom of Cambodia to the consumers as defined under the Law on Consumer Protection.
What is the definition of the law on unfair contract term in Cambodia?
Under the Cambodian law on consumer protection 2023, there are two types of clause. One of which is the unfair contract clause. These are written below:
- Unfair Contract Clause refers to any clause of the standard form contract creating an excessive disadvantage to consumers.
- Standard Form Contract: refers to a contract or any material clause of a contract which is/are pre-formulated by the business operator for the provision of goods and/or services to the consumer without allowing the consumer to negotiate, to revise or to influence in whatever form.
To note: The Substantial Clause refers to any substantial clause or term of the standard form contract that are important for the consumers or the consumer deems important for the formation of the contract and the business operator should have been aware of the importance of such clause.
What is the Requirement for Standard Form Contract under the law on unfair contract term in Cambodia?
There are two mans points under the requirements for the law on unfair contract term in Cambodia, they are:
- Substantive Requirement: The contract shall be (1) made in written form, (2) in Khmer language (foreign language can be made upon the voluntary of the consumer) and (3) consisted of all minimum standard information as required under Law on Consumer Protection.
- Explanatory Requirement: The business operator is required to explain, indicate, and give a clear information to consumers.
What is the Unfair Contract Clause under the law on unfair contract term Cambodia?
Business operator’s are restricted from including any and all unfair clause as below:
- Any clause excluding or limiting the liabilities of the business operator on the guarantee of the services and/or goods as provided under the Civil Code;
- Any clause granting the right to the business operator to materially change or modify the type quantity, price and quality of goods and/or services without prior consent from the consumer
- Any clause granting the right to the business operator to change any Substantial Clause of the Standard Form Contract without prior consent from or notice to the consumer
- Any Clause granting the right to the business operator to unilaterally and arbitrarily interpret or to terminate the contract with his or her own discretion.
What are the Evaluation and Assessment of Excessive Benefits of the law on unfair contract in Cambodia?
The evaluation on the excessive benefit shall be assessed with the strictly consideration to the dominance of economic, social situation, ignorance, inexperience, other circumstances that deemed necessary for formation of contract; and other conditions as may be determined under the special laws and regulations.
What is the Requirement for Change of Contract and the preliminary review and complaint procedures for the law on unfair contract in Cambodia 2023?
The change of substantial clause shall require the written consent of the consumer. For any change of the contract terms other than the substantial clause, the business operator shall provide a written notification to the consumer.
The Competent Authorities for Preliminary Review are:
- (i) National Committee for Consumer Protection (“NCCP”), and (ii) any other sectoral competent regulator.
- Competent Authorities for the Receipt of Complaint: (i) the NCCP and (ii) any other sectoral competent regulator.
What are the rules on Rescission and Ratification under the law on unfair contract in Cambodia 2023?
The consumer may rescind or ratify any clause of excessive benefit and Unfair Contract Clause in accordance with the procedure and requirement as provided under Article 360, 362 and 363 of the Civil Code by signing or affixing his or her thumbprint on a written rescission or ratification form separate to the Standard Form Contract. Such rescission and ratification of all consumers of the business operator shall waive the liabilities of the business operator under this Prakas.