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Contract with 'Ah Long' not legal
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Wed, Oct 29, 2008
The New Straits Times
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iv id="adwrapper">According to lawyers here, many were still unclear on the legal status of an "I owe you" and discarded it as a mere document which had no legally binding effect.
"As long as the moneylender is licensed, the document between him and his client can be used in a civil court to recover a bad debt. All the terms and conditions are normally set out in the contract and once signed, it becomes legally binding on both parties," said a lawyer.
He said the normal process in case of a bad debt was for the moneylender to file a statement of claim in the civil court through his lawyers against the client.
However, in the case of illegal moneylenders, the lawyer said even if a contract was signed between the "Ah Long" and client, it had no legal effect.
"This is simply because the entire business operation is illegal and therefore, any documentation with regards to this business operation is also not recognised in a court of law."
He said an illegal moneylender had no legal recourse at all to recover a bad debt.
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