Successful Fees Recovery for Wrongful Termination of Graphic Design Contract in Malaysia
When a business hires a creative professional — whether a graphic designer, marketing consultant, or branding agency — the relationship is governed by contract law, not goodwill.
Breaking that contract early can be costly.
In a recent case handled by us, JY Ko Advocates & Solicitors, our client — a professional graphic designer — successfully recovered compensation after a company wrongfully terminated a 3-month non-termination service agreement within the first month.
This case highlights an important principle under Malaysian contract law, which is summarised as follows:
A contract cannot be terminated simply because one party changes their mind.
Background: The Graphic Design Services Agreement
Our client entered into a written service agreement with a corporate client to provide:
- Brand design
- Marketing creatives
- Visual assets
- Ongoing design support
The contract contained a clear non-termination clause:
“This agreement shall not be terminated for a minimum period of three (3) months.”
This clause is extremely common in:
- Marketing retainers
- Graphic design contracts
- Website development agreements
- Creative agency engagements
The purpose is simple:
Creative professionals must commit time, manpower, and opportunity cost — and must be protected from early cancellation.
What Went Wrong
Despite the contract, the company:
- Used our client’s services
- Requested design work
- Approved deliverables
- Benefited from the work
Yet terminated the contract in the first month, without justification and without paying for the remaining two months.
They argued that:
- They were unhappy
- They did not need the service anymore
- They should be allowed to cancel
Legally, none of these excuses matter.
The Legal Position in Malaysia
Under Section 40 of the Contracts Act 1950, when one party refuses to perform their contractual obligations, the other party may treat the contract as terminated and claim damages.
When a contract contains a fixed term or non-termination clause, early termination constitutes:
A repudiatory breach of contract
This entitles the innocent party to claim:
- The unpaid contract value
- Loss of expected profit
- Contractual damages
The law does not require the innocent party to keep working for a party that has already broken the agreement.
How JY Ko Advocates & Solicitors Structured the Claim
Our firm took a commercially aggressive but legally precise approach.
We focused on proving:
- A valid contract existed
- A binding 3-month non-termination clause was agreed
- The defendant terminated within 1 month
- Our client suffered financial loss
We produced:
- The signed service agreement
- Proof of work delivered
- Correspondence confirming early termination
- Proof of outstanding contractual fees
We framed the case not as a “dispute” — but as a clear contractual breach.
The Result: Client Successfully Recovered Compensation
Faced with overwhelming legal liability, the defendant (with legal representation):
- Could not deny the contract
- Could not deny early termination
- Could not escape the non-termination clause
As a result, our client successfully recovered payment for the contract period that was wrongfully cut short.
This case demonstrates that:
Creative professionals and service providers are legally protected — if their contracts are enforced properly.
Why Non-Termination Clauses Are Fully Enforceable in Malaysia
Many businesses believe they can cancel service providers at will.
This is wrong.
Under Malaysian law:
- Fixed-term contracts
- Minimum service period clauses
- Non-termination clauses
may be binding unless proven to be illegal or unconscionable.
If a party agrees to:
“This contract shall not be terminated for 3 months”
They are locked in.
Early termination = breach.
Who This Legal Protection Applies To
This case applies not only to graphic designers, but also:
- Marketing agencies
- Web developers
- IT service providers
- Content creators
- Consultants
- Freelancers
- Software vendors
- Creative studios
If your client terminates you early — you may still be entitled to the full contract value.
Why Clients Choose JY Ko Advocates & Solicitors
Unlike general law firms, we, JY Ko Advocates & Solicitors understands:
- Commercial contracts
- Service-based businesses
- Freelancers & SMEs
- Revenue-based disputes
We do not just “send letters”.
We build legally enforceable pressure that forces payment.
Our firm has handled numerous across civil litigation, debt recovery, contract enforcement, and commercial disputes — and we know exactly how to make defaulting parties pay.
Have You Been Terminated Early by a Client?
If you are a:
- Designer
- Consultant
- Agency
- Service provider
and your client:
- Cancelled your contract early
- Refused to pay the remaining months
- Walked away after using your services
You may be entitled to full contractual compensation.
Speak to JY Ko Advocates & Solicitors Today
We help service providers turn broken contracts into real money.
If your client breached your agreement, we will:
- Analyse your contract
- Identify enforceable clauses
- Quantify your claim
- Apply legal pressure
- Recover your money
📞 Contact JY Ko Advocates & Solicitors today and let the law work for you.
Written on: 15th January 2026
Contact JY Ko Advocates & Solicitors to make an appointment today!
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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!