L03: L.A.C. Visual Map
Transcript of L03: L.A.C. Visual Map
BUSINESS LAW1) SINGAPORE LEGAL SYSTEM PART 1
2) SINGAPORE LEGAL SYSTEM PART 2
3) CONTRACT: OFFER & ACCEPTANCE
4) CONTRACT: CONSIDERATION & INTENTION TO CREATE LEGAL RELATIONS
5) CONTRACT: TERMS & EXEMPTION CLAUSE
6) CONTRACT: VITIATING FACTORS. INCAPACITY & MISREPRESENTATION
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(1) Singapore Legal System Part 1
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❑Nature &
Function of
Business Law
❑ Define what law is
❑ common law & civil law
systems
❑ Criminal v
civil law
❑ Statutes v
Case law
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CIVIL LAW SYSTEM
COMMON LAW SYSTEM
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Criminal law vsCivil law
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(A) LAW
1) Set of rules
2) Community regulates its affairs i.e.
business / commercial transactions
3) Resolve disputes when arise (judiciary /
out-of-court via Alternative dispute
resolutions)
4) Enforceable by authority i.e. government
(executive)
(B1) COMMON LAW SYSTEMS (B2) CIVIL LAW SYSTEMS
1) Main source of law under the common law
system is “case law”
2) a product of medieval England and are
found in USA, Canada, Australia, New
Zealand as well as in Asia i.e. Singapore,
Hong Kong, Malaysia, Philippines, India
and South Africa.
3) Judges refer to past cases recorded in law
reports and use the principles to decide
new cases to promote consistency and
fairness based on the principle of binding
precedent or “stare decisis”.
1) Laws are systematically “codified” into
Codes.
2) found in European continental countries
i.e. France, Germany, Italy, Spain and also
in Asia i.e. Japan, Korea, Indonesia and
Thailand.
3) the civil codes govern the rights and
obligations of persons with the criminal
codes prohibiting certain actions as
criminal offences and commercial codes
governing business transactions. These
codes contain general principles of law and
cover the spectrum of human activities. Copyright © 2021 by Thum Cheng Cheong
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(C) COMMON LAW SYSTEMS
1) Rules of common law are essentially judge-made
law.
2) The judges in a case always look back at previous
cases called precedent involving similar facts to
discover the relevant legal principles to be applied
to their case and reach a decision or judgment
accordingly.
3) Past cases decided by superior courts are binding
and authoritative for future cases decided by lower
courts in the same hierarchy of courts. This doctrine
is called doctrine of binding precedent or stare
decisis which means “to stand by a decision”.
4) Prior decisions made by the court at the same level
are not binding but may be followed as “persuasive”
authority.
5) Prior decisions of a court in another hierarchy are
not binding on the court but may be of persuasive
authority.
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(D1) CRIMINAL LAW (D2) CIVIL LAW
1) Deals with certain acts that are harmful to
society
2) Examples are murder, theft and serious
traffic offences
3) The main objective is punishment of the
offender by way of fine, imprisonment,
caning or death penalty.
1) Covers all laws which are not criminal law.
2) Encompasses family law, contract law and
generally all aspects of business law.
3) The purpose is to compensate the innocent
or injured person.
4) Some acts have legal consequences in both criminal law and civil law.
5) Example in the case of a reckless car driver who may be:
6) prosecuted the authorities under criminal
law and punishment.
6) sued by the pedestrian for compensation
under civil law
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(2) Singapore Legal System Part 1
❑ Sources of Singapore law
❑ System of government
❑ Constitution of Singapore
❑ Alternative Dispute Resolutions
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(A1) STATUTES (A2) CASE LAW
1) Statutes are written laws which are
enacted by the legislature.
2) The Singapore Constitution is the supreme
law of the land which lays down the
Singapore system of government. Any
written law or case law which is
inconsistent with the Constitution is
considered void.
3) Decisions by judges and the effect may be
reversed by Parliament when they pass
statutes.
1) Case laws are court decisions and the
principle of binding precedent or “stare
decisis” is a very important doctrine
adopted by the judiciary.
2) New laws are sometimes “created” by
judges in a piecemeal basis when they
reach a decision or judgment.
3) Decisions by judges may be reversed by
Parliament … passing statutes.
4) Some aspects of English legislation and case law apply to Singapore by virtue of its
“reception” under the Application of English Law Act.
5) These formed part of the Singapore law.
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(A1) STATUTES (A2) CASE LAW6) Statutes or written laws are enacted by
Parliament which is a speedy way to
update law in order to cope with rapid
changes in the business world.
7) The main legislations are called Acts of
Parliament.
8) Details are dealt with through “subsidiary
legislation” which are rules made by the
Executive e.g. the Minister and published
under a formal procedure.
9) Examples of statutes are Sale of Goods Act
and Road Traffic Act which protects the
public.
10) The authorities enforce the provisions of
statutes e.g. the use of Personal Mobility
Devices in HDB void decks or on the road.
11) Enforcement of statutes is based on
interpretation of the statutory provisions.
6. Private individuals bring matters to court for
decision and resolution on civil matters.
7. Court cases are decided based on the
doctrine of binding precedents whereby the
judge looks back to see how previous cases
(precedent) involving substantially similar
facts were dealt with.
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(B) SINGAPORE’S SYSTEM OF GOVERNMENT
consists of three “arms” under the Constitution:
(B1) LEGISLATURE (B2) EXECUTIVE (B3) JUCIDIARY
1) Primary law-making body
comprising of the President
and Parliament.
1) comprises the President,
the Prime Minister and his
Cabinet.
2) implements the statutes
and executes the
decisions of the
government together with
the Civil Service.
1) comprises the President,
Chief Justice, Justices of
the Supreme Court and all
judicial officers of the
State Courts.
2) responsible for
administration of justice.
3) Structure of courts: 2
levels namely the
Supreme Court on the
high level and the State
Courts on the lower level
❑ (NOTE: Refer to lecture
notes for court hierarchy.)
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(C1) JUCIDIARY (C2) ALTERNATIVE DISPUTE RESOLUTION
1) Parties suing each other in
court is referred to as civil
litigation.
2) Litigation is a formal and
expensive process and the
cases are heard in open
court
1) 2 main forms of dispute resolutions namely mediation and
arbitration
2) a faster, cheaper, informal, non-confrontational
alternatives to civil litigation.
3) preserves confidentiality and disputing parties may select
their mediator or arbitrator.
4) Mediation: appoint a mediator to settle the matter
amicably in Singapore.
5) Arbitration: appoint an expert arbitrator to decide on the
dispute and the award which is enforceable
internationally.
❑ (NOTE: Refer to lecture notes on mediation & arbitration).
3) Proceedings in Small Claims
Tribunal are heard before a
“Referee” with limited
jurisdiction dealing with
consumer cases of up to
$20,000 or $30,000 if both
parties agree in writing.
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(3) CONTRACT: OFFER & ACCEPTANCE
❑ Elements of a legally
binding contract❑ Principles of
acceptance in
contract
❑ Principles of offer in
contract
❑ Contract
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FACTS:❑ WHO❑ WHAT❑ WHEN❑ WHERE❑ HOW
❑ OFFER❑ I.T.T
❑ ACCEPTANCE
?
❑ General rule❑ Exception Advertisements
E.T.A.
Reward?
Case Laws
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Definition of contract
✓ an agreement giving rise to
✓ rights and obligations which are
✓ recognised and enforceable by law
✓ must be a “meeting of minds” / consensus ad
idem.
✓ 4 elements of a contract: offer, acceptance,
consideration and intention to create legal
relations
Definition of invitation to treat
❑ An invitation to
o commence negotiations
o someone to make an offer
The following are examples of invitation to treat
o advertisements: [Partridge v Crittenden]
o display of goods in shops: [Pharmaceutical
Society v Boots]
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(1) Definition of OFFER.
➢ An indication by one person (“offeror”)
➢ To another (“offeree”)
➢ Of the offeror’s willingness to enter into a
contract on
➢ Certain terms
➢ As soon as it is accepted by the offeree
❑ Offer may be communicated
o Conduct.
o Orally,
o Writing,
o Electronic Transactions Act, Sections
11 & 12. Must be received. Inbox.
Capable of being retrieved (read?)
❑ Made to:
o specific person,
o group of persons,
o world at large. Unilateral contract [Carlill v
Carbolic Smoke Ball Co.]
❑ Termination
o Revocation / withdrawal by
offeror before acceptance and
effective upon offeree receiving
notice [Byrne v Van Tienhoven]
o Rejection by offeree outright or
a counter-offer [Hyde v Wrench]
o Lapse of specified / reasonable
time
o Death of offeror / offeree
REWARD
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(2) Definition of ACCEPTANCE.
➢ Expression of assent / concurrence
➢ To terms of the offer
➢ Unqualified and unconditional assent of
offer (otherwise a counter-offer)
x No acceptance if assent of offer is
Qualified and Conditional, this
amounts to a counter-offer (An OFFER)
❑ General rule. Acceptance must be
communicated and received by offeror.
❑ Offer may be communicated
o Conduct.
o Orally,
o Writing,
o Electronic Transactions Act, Sections
11 & 12. Common law rules of
communication of offer and
acceptance applies.
o Case law: Entores Ltd v Miles Corp.
❑ Silence: general rule is that silence does not
fulfil communication requirement of
acceptance [Felthouse v Bindley]
Exceptions to the Receipt Rule.
o Postal rule of acceptance conditions.
[Adams v Lindsell]
i. Parties must have assented to its
use
ii. Reasonable in the circumstances
to use the post
iii. Letter must be properly
addressed and adequately
stamped
o Waiver of communication. [Carlill v
Carbolic Smoke Ball Co]
o Silence: Offeror agreed in advance with
offeree that silence amounts to
acceptance.
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(4) CONTRACT: CONSIDERATION & INTENTION
❑ Rules on
consideration
❑ Requirement for
intention to
create legal
relationship
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✓ Presumption x Rebuttal with evidence
✓ Rebuttal with evidence
× Presumption
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❑ Con$ideration
?
3 RULES
✓ Sufficient
Adequate
Visual Map
✓ Moved
SUE
X $ =G _ FT
PAST ……………………..PRESENT
X
❑ Intention to create legal relations
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Commercial
Social & Domestic
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(A) Definition of CONSIDERATION
➢ Something given, promises or done by
one party
➢ In exchange for
➢ A promise by another
➢ “price” or compensation paid for a
promise / act.
➢ Bargain
❑ 3 rules:
1) Must be sufficient, need not be adequate
/ equal in value to other party’s promise
/ act unless fraud / duress. [Thomas v
Thomas],
* DO MORE than legally obliged to do
[Glasbrook v Glamorgan]
2) Move from promisee (given
consideration i.e. paid price) to enforce
the promise (seller’s promise to deliver
the goods).
NO consideration
➢ No exchange
➢ Of promises
➢ No “price” or Compensation
➢ A gift: no bargain
INVALID consideration:
➢ Fraud / duress in exchanging promises /
price.
➢ *Already legally bound. [Stilk v Myrick]
3) Must not be PAST. Act performed before
promise is given is not valid
consideration. Negotiate before doing
more than legally obliged.
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(B) Definition of INTENTION TO CREATE LEGAL
RELATIONS
o Intention to create legal relations must be
present based on objective assessment of
the agreement.
NO intention to create legal relations in this
cases:
❑ Commercial agreements.
o Presumption that intention is present.
Examples: Guarantees. o Rebuttal with evidence
i.e. Letter of Comfort [Kleinwort Benson v
Malaysian Mining Corp],
❑ Social and domestic agreements.
o Rebuttal by evidence of written
agreement and separation that there is
intention to create legal relations [Merritt
v Merritt]
o Presumption that social and domestic
agreements there is NO intention to
create legal relations / lack intention.
[Balfour v Balfour]
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2b
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I.C.U.U.
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(5) CONTRACT: TERMS & EXEMPTION CLAUSES
❑ Terms of contract
❑ Condition,
Warranties &
Innominate terms
❑ Exemption
Clauses
❑ Express &
Implied Terms
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❑ ACCEPTANCE
❑ CONSIDERATION
❑ INTENTION TO CREATE LEGAL RELATIONS
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ITT❑ NEGOTIATION❑ STATEMENTS
TERMS
❑ PROMISE(S)
❑ PROMISE(S)
❑ EXCHANGE
EXPRESS TERMS
IMPLIED TERMS❑ C❑ S❑ C
CATEGORIES
CLASSIFICATION
❑ C_ND_T_ _ N❑ Discharge❑ Damage$
❑ _NN_M_N_T _ TERM
❑ RDC
❑ W_rr _ nty❑ Damage$
EXEMPTIONCLAUSES
❑ INCORPORATION
❑ CONSTRUCTION
❑ UNUSUAL FACTORS
❑ UCTA: Neutralisation
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(A) Definition of TERMS:
Promise & undertaking given by one contracting party to another.
Categories:
o Express terms.
Explicitly agreed.
“Parol evidence rule”: contradictory oral evidence
not admitted if contract in writing.
o Implied terms. Terms understood to apply into contract
• Courts. [The Moorcock]
• Statute. eg. Sale of Goods Act.
• Custom or trade usage. [British Crane Hire v Ipswich
Plant]
(B) Classification:
1) o CONDITIONS. Poussard v Spiers
➢ Important term.
➢ Breach:
o Discharge obligations and
o claim damages.
2) o WARRANTIES. Bettini v Gye
➢ Less important.
➢ Breach: claim damages.
3) o Innominate terms. Depends on seriousness of breach.
Singapore approach in RDC Concrete PL v Sato Kogyo (S)
PL & Another
A. Contract clearly provides events in which party entitled
to terminate the contract.
B. No provision to terminate if breach:
o Innocent party entitled to terminate where party
renounces all obligations
o Condition / warranty approach depending on
intentions of parties.
o Hongkong Fir’s approach: innocent party entitled to
terminate where consequences of breach are serious. Copyright © 2021 by Thum Cheng Cheong
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Definition of exemption clauses.
Term in the contract that excludes [“Exclusion / exception clauses”] or limit liability of party in breach.
Guidelines on validity of exemption clauses.
VALID INVALID
(i) Incorporation. “Part of” contract.
a. Signature. [L’Estrange v Graucob]
b. Notice. Before contract formed. [Olley
v Marlborough].
(i) b. Ticket not regarded as a contractual document
but merely a receipt [Chapelton v Barry UDC]
(ii) Construction. Wordings of clause is CLEAR. (ii) Wordings of clause is NOT CLEAR: contra
proferentum against party who drafted the
exemption clause.
(iii) Unusual factors. No evidence of any
misrepresentation.
(iii) Misrepresentation about scope and extent of
exemption clause makes it invalid. [Curtis v Chemical
Cleaning]
(iv) Neutralization by UCTA.
• Section 2(2). Clause excludes liability for other
loss / damage (not death or personal injury) due
to negligence valid if it is fair and reasonable to
exclude
• Section 2(1). Protect consumers. Clause invalid if it
excludes liability for death or personal injury.
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(6) CONTRACT: VITIATING FACTORS
❑ Effect of vitiating factors
❑ Incapacity❑ Misrepresentation
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❑ Definition of Vitiating Factor
?
INCAPCITY to contract❑ MINOR: 18
RULEx Contract VOIDx Cannot be sued
EXCEPTION❑ Contract VALID❑ Minor bound by contract
(a) Contracts for NECESSARIES❑ Minor’s station in life &
requirements❑ Peters v Flemings× Nash v Inman
(b) Beneficial contracts❑ Minor’s health, education &
welfare❑ Chaplin v Leslie Frewin Publishers
× Terms unreasonable, not beneficial, contract unenforceable
× De Francesco v Barnum
(c) Voidable Contracts❑ Minor repudiate contract before attaining majority
i.e. lease, partnerships
(d) Ratifiable Contracts❑ Contract not binding unless minor ratifies soon after
attaining majority i.e. Good that are not necessaries.
M.C.A.
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❑ Definition of Vitiating Factor
?
MISREPRESENTATION: 3 elements ❑ FALSE statement of FACT
BARS to RESCISSION❑ Contract affirmed❑ Reasonable time elapsed❑ Third party interest
❑ INDUCED into contract❑ RELIANCE on statement
MISREPRESENTATION: types ❑ FRAUDULENT. Know statement is
untrue❑ NEGLIGENT. Made statement with
due care (carelessly)❑ INNOCENT. No fraud / fault
CONTRACT is VOIDABLE❑ Innocent party may RESCIND
contract❑ Claim DAMAGES
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Definition of vitiating factor.
1) Factor which makes a contract invalid.
2) Void. Nullity from very start (void ab initio).
Remedy: Restitution.
3) Voidable. Innocent party avoids / rescinds
contract.
4) Incapacity, misrepresentation, duress & undue
influence, mistake, illegality.
5) Restitution: property is given back to original
owner and money returned to buyer.
6) Voidable contract valid so long as innocent
party does not rescind it.
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(B) Capacity to contract.
1) Party to a contract must have capacity to contract.
Rule on Minor. Contract void regards minor.
1) Most situations: age of majority is 18 i.e. has the
capacity to contract
2) Age of majority is 21 in
1) Contract for sale, purchase, mortgage, … of
land.
2) Contract for lease of land for more than 3
years.
3) Contract whereby minor’s beneficial interest
under a trust is sold ….
3) Minor: can sue but cannot be sued by adult i.e.
contract is void as regards the minor.
Exceptions. Minor bound by contract.
4. Contracts for necessaries. Minor’s
station in life and requirements.
o Peters v Fleming: Yes. Minor to
pay
o Nash v Inman: No. Minor not
liable to pay
5. Beneficial contracts for minor’s health,
education and welfare.
o Chaplin v Leslie Frewin
Publishers: Yes, beneficial,
minor earn money.
o De Francesco v Barnum: Not
beneficial, terms unreasonable
& not beneficial to minor.
Contract unenforceable
against minor. (NOTE: identify
and analyse such terms)
6. Voidable contracts. Minor entitled to
repudiate contract before reaching 18 or
soon after attaining majority. Examples:
Lease, partnership, purchase of shares.
7. Ratifiable contracts. Any other type of
contracts.
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(A) Misrepresentation.
(i) DEFINITION.
➢ Representation. Statement made during negotiations which
induces another party to enter into the contract.
➢ Misrepresentation. Definition:
1) False statement of fact. Not opinion or intention.
2) Induced into contract. Material representation.
3) Reliance on statement.
(ii) TYPES of misrepresentations
a. Fraudulent. Made knowingly or reckless whether true
or not. [Pantron v Lee Cheow Lee]
b. Negligent. Made without due care. [Howard Marine v
Ogden]
c. Innocent. Made without fraud and without fault.
Claim indemnity.
(iii) EFFECT of misrepresentation
i. Contract is voidable. Innocent party entitled to
rescind contract.
ii. Claim damages for fraudulent and negligent
misrepresentations.
(iv) Bars to rescission. Contract affirmed,
reasonable time elapsed, third party
interest,..
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