Failure to Deliver Goods or Services in Malaysia: Your Complete Legal Guide
Failure to deliver goods or services is one of the most common commercial disputes in Malaysia, affecting SMEs, suppliers, contractors, vendors, e-commerce sellers, and even large corporations. When a promised product or service is not delivered as agreed, the impact can be severe — cashflow disruption, business delays, lost clients, reputational damage, and financial losses.
In Malaysia, these situations often escalate into breach of contract lawsuits, injunction applications, damages claims, and urgent enforcement actions. Many clients approach our firm at the point where negotiations have collapsed and losses are mounting.
This article explains everything you need to know about failure to deliver disputes under Malaysian law, your rights, available legal remedies, and how an experienced litigation lawyer can help you recover losses and enforce the contract swiftly.
1. What Legally Counts as “Failure to Deliver” in Malaysia?
Under the Contracts Act 1950 and related commercial laws, “failure to deliver” refers to situations where:
- Goods are not delivered at all
- Goods are delivered late or beyond agreed timelines
- Goods delivered are defective, incomplete, or not as promised
- Services are not performed
- Services are performed poorly, incompletely, or negligently
- The vendor abandons the contract
- The contractor fails to meet key milestones
- A seller refuses to complete delivery unless more money is paid
- A service provider does not respond after receiving payment or deposit
In legal terms, this amounts to a breach of contract, giving the buyer or customer the right to pursue remedies including:
- Damages (financial compensation)
- Refund of payments made
- Termination of contract
- Specific performance (court order compelling delivery)
- Replacement of goods
- Loss of profit claims
- Injunctions to prevent the breaching party from disposing of assets or running away
2. Common Real-Life Situations We Handle at Our Firm
Over the years, JY Ko Advocates & Solicitors has represented clients in hundreds of non-delivery cases. These are the most frequent disputes:
a. Business-to-Business (B2B) Supply Failures
- Supplier accepts purchase order and payment but fails to supply materials
- Distributor fails to deliver products for resale
- Manufacturing delays causing downstream business losses
- Partial delivery with remaining stock never supplied
b. E-Commerce and Online Marketplace Fraud
- Seller receives payment but does not ship items
- Social media sellers disappearing after taking deposit
- Buyers receiving a completely different or low-quality product
- No refund despite months of chasing
c. Renovation and Construction Failure
This is one of the most common disputes in Malaysia:
- Contractor abandons the job midway
- Renovator takes deposit but never starts work
- Work quality is so poor that it is unusable
- Contractor demands additional payment despite fixed contract
d. Service Providers Who Fail to Perform
- Software developers failing to deliver completed systems
- Marketing agencies failing to provide any results
- Consultants who do not produce promised deliverables
- Event managers failing to provide services on the agreed date
e. Event Vendors (e.g., Weddings, Corporate Events)
- Photographer or videographer no-show
- Caterer fails to provide food
- Event planners disappearing after taking deposits
- Venue providers cancelling last minute
f. Professional Services
Even professionals can breach contracts:
- Lawyers, architects, engineers, accountants or agents failing to perform agreed tasks
- Delay in issuing reports, plans, or professional deliverables
g. Payment Made, But Vendor Goes Silent
This is extremely common in online transactions and small business dealings. The seller:
- Blocks the buyer
- Stops responding
- Goes out of business
- Is unable to deliver due to financial issues
In all these situations, legal action may be the fastest and most effective way to recover losses.
3. Why Do Sellers or Contractors Fail to Deliver?
From our experience handling litigation in this area, the most common causes include:
1. Cashflow Problems
Vendor uses your deposit to cover other expenses.
2. Mismanagement
Poor planning, overspending, or lack of operational capacity.
3. Supply Chain Issues
Shortages, logistic delays, or import restrictions.
4. Overpromising and Underdelivering
Taking on more projects than they can handle.
5. Disputes Between Business Partners
Internal conflict causing project abandonment.
6. Intentional Fraud
Some cases involve deliberate deception to collect deposits.
7. Bankruptcy or Company Closure
Vendor shuts down midway through performance.
8. Price Increases
Seller refuses to complete delivery unless buyer pays more.
Regardless of the reason, a contract must be honoured, and Malaysian law strongly protects buyers and consumers from such breaches.
4. Your Legal Rights Under Malaysian Law
When a seller or contractor fails to deliver, you have several legal rights (subject to any prevailing agreement):
A. Right to Terminate the Contract
If the breach is serious, you may terminate and claim damages.
B. Right to Demand Specific Performance
You can ask the court to compel the seller to deliver the goods or complete the services.
C. Right to Claim Damages
This includes:
- Loss of profits
- Additional expenses to hire replacement suppliers
- Damage to business reputation
- Loss of business opportunities
- Financial losses due to delays
D. Right to a Refund
Especially when payment was made upfront.
E. Right to Injunctions
To stop a breaching party from:
- Selling goods meant for you
- Dissipating assets
- Absconding
F. Right to Recover Deposits or Advance Payments
The courts generally protect buyers where payment was made in good faith.
5. Evidence You Should Gather Immediately
To strengthen your case, collect the following:
- Contracts, quotations, purchase orders
- WhatsApp, email, and SMS communications
- Bank transfer slips and receipts
- Invoices and payment records
- Delivery orders (if partial)
- Photos/videos of defective or incomplete work
- Witness statements
- Agreed scope of work, milestones, or specifications
- Advertisements or representations made by the seller
- Screenshots of communication attempts
The more evidence you have, the stronger your claim.
6. What Should You Do Immediately After Non-Delivery Happens?
Step 1: Contact the Seller/Contractor
Give them a reasonable chance to explain or rectify.
Step 2: Send a Formal Demand Letter
A lawyer’s letter of demand (“LOD”) is often the turning point.
Step 3: To Consider Stop Making Further Payments
Consider not to pay additional sums until delivery is completed (subject to case by case basis).
Step 4: Document All Losses
Record delays, replacement costs, and business disruptions.
Step 5: Engage a Lawyer If the Seller Refuses to Comply
This is crucial when:
- The seller ignores your messages
- Excuses drag on for weeks or months
- The seller threatens not to deliver
- You have already suffered financial losses
Your lawyer can advise whether to pursue negotiation, mediation, or legal action.
7. What Legal Action Can You Take?
Your options depend on the severity of the breach and the contract terms.
A. Letter of Demand (LOD)
A powerful first step. Many disputes are resolved at this stage because:
- It shows you are serious
- It sets a clear deadline
- It warns of impending legal action
Our firm drafts persuasive, strongly-worded LODs based on the facts of your case.
B. Filing a Civil Suit
If the seller still refuses to deliver or refund, you may file a lawsuit in the Magistrates’, Sessions, or High Court depending on the claim amount.
Typical claims include:
- Refund + interest
- Damages for losses
- Specific performance
- Liquidated damages
- Loss of profits
C. Injunction Applications
If you believe the seller might:
- Run away
- Dispose of assets
- Sell goods to another buyer
An urgent injunction can freeze the situation.
Our firm has experience in obtaining injunction orders for clients to prevent further loss.
D. Winding-Up Threats or Actions
If a company owes you money:
- A statutory demand can be served
- If they fail to pay, a winding-up petition may be filed
This is a powerful method to compel payment.
E. Police Reports (If Fraud Is Suspected)
This applies where:
- The seller was never a legitimate business
- The intention from the start appears fraudulent
8. How Long Will a Lawsuit Take?
Timelines depend on court availability and complexity, but generally:
- Letter of demand: 7–14 days
- Civil suit filing to judgment: 6–18 months
- Injunction: Sometimes granted within 24–72 hours
- Settlement negotiations: Anytime
Many cases settle early when the defendant realises the strength of your claim.
9. How Much Can You Claim?
Under Malaysian law, you can claim:
- Full refund
- Cost of replacement suppliers
- Loss of profits
- Loss of business opportunities
- Damages for delays
- Interest
- Legal costs
The court’s aim is to restore you to the position you would have been in if the breach never occurred.
10. Why You Should Not Delay Taking Legal Action
Many clients wait too long, hoping the seller will eventually fulfil the contract. However, delay can:
- Strengthen the seller’s defence
- Increase your financial losses
- Allow the seller to disappear
- Allow assets to be transferred
- Cause important evidence to be lost
If the breach is serious, early legal intervention gives you the best chance of recovery.
11. Why Engage JY Ko Advocates & Solicitors?
As a litigation-focused law firm, we have successfully handled numerous cases involving:
- Non-delivery of goods
- Failure to provide services
- Abandonment of renovation or construction projects
- B2B supply chain disputes
- Professional service failures
- Online purchase fraud
- Commercial breach of contract
Our strengths include:
✔ Fast and strategic assessment
We identify your strongest legal position within minutes of reviewing the facts.
✔ Strong, effective letters of demand
Our letters often compel immediate refunds or performance.
✔ Experience in injunctions
We have successfully applied for urgent injunction orders to freeze assets or stop further breaches.
✔ Aggressive litigation strategy
When necessary, we take firm, decisive action to protect your interests.
✔ Transparent, business-friendly fee structure
We understand cash flow is important — especially when you’ve already suffered losses.
✔ Practical, commercially minded solutions
We aim for real-world results, not just theoretical legal outcomes.
12. Who We Commonly Represent
- SMEs
- Large corporations
- Online businesses and e-commerce sellers/buyers
- Homeowners
- Contractors and subcontractors
- Manufacturers
- Retailers
- Event organizers
- Startup founders
- Professional service providers
- Individuals who have been cheated online
If someone has failed to deliver goods or services to you, we can represent you effectively.
13. Frequently Asked Questions (FAQ)
1. Can I sue someone who did not deliver after taking my deposit?
Yes. This is a straightforward breach of contract claim.
2. What if the seller keeps giving excuses?
This is a common tactic. A lawyer’s letter or legal action usually stops the delays.
3. Can I claim for emotional distress?
Generally no, unless the situation involves fraud or misrepresentation then there may be other general damages such as exemplary and aggravated damages.
4. What if I have no written contract?
You can still sue. WhatsApp messages, emails, quotations, invoices, Statement of Accounts and payment slips are good supporting documents.
5. Can I report to the police?
Yes, if fraud is suspected — but police involvement does not guarantee a refund. Civil action is needed to recover losses.
6. What if the seller is overseas?
You may still sue in Malaysia depending on contract terms.
14. When Should You Engage Our Firm?
Engage us immediately if:
- Delivery deadlines have passed
- Seller demands extra money
- Seller goes missing
- Work stops suddenly
- You suffered business losses
- You need an injunction
- You want a refund
- The dispute involves significant sums
- Negotiations have broken down
Even a simple consultation can save you from months of loss and uncertainty.
15. Contact Us Today
If you are facing a dispute involving failure to deliver goods or services, early legal action is essential to protect your rights and recover your losses.
JY Ko Advocates & Solicitors
Experienced in civil litigation, breach of contract, commercial disputes, injunctions, and debt recovery.
We provide:
- Fast case assessment
- Strategic advice
- Effective enforcement
- Aggressive representation
We will review your case and we will advise on your strongest legal remedy.
Contact JY Ko Advocates & Solicitors to make an appointment today!
🌐 Call us: +6017.6965.966 (Call / WhatsApp)
📩 Email Us: nick@jykolaw.com
Or fill in the contact form CLICK HERE
Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!