Based on lectures and tutorials on Formation of Contract Parts

Based on lectures and tutorials on Formation of Contract Parts (I) and (II) and Terms &
Exemption Clauses, you are required to use an example of a contract with a business
organisation (e.g. a contract to purchase goods at a shop, a contract for a mobile
account) which you have recently encountered in your daily life to write a Reflection
Assignment. You are to
a. select and explain the example of the contract with the business organisation;
b. explain the applicable laws on formation of contract and how they apply to the
contract you have described;
c. identify and describe ONE term or exemption clause of the contract;
d. explain the effect of the term or exemption clause on the contract; and
e. express your views/opinions on the example and the law. Please do it in Singapore Context, e.g. Business organisation in Singapore.

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AY2017/2018 SEMESTER 2
(Year 2)

Carrefour Singapore Pte Ltd v Leong Wai Kay (2006)

Electronic Transactions Act
Contracts (Rights of Third Parties) Act
Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)
Patridge v Crittenden (1968)
Harvey v Facey (1893)
Byrne v Van Tienhoven (1880)
Hyde v Wrench (1840)
Felthouse v Bindley (1862)
The Brimnes (1975)
Stone World Sdn Bhd v Engareh (s) Pte Ltd (2013)
Grossner Jens v Raffles Holdings Ltd (2004)

Unfair Contract Terms Act
L’estrange v F. Graucob Ltd (1934)
Olley v. Marlborough Court Ltd (1949)
Kendall v Lillico (1968)
Chapelton v Barry Urban District Council (1940)
Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd (2003)
Curtis v. Chemical Cleaning & Dyeing Co (1951)

Misrepresentation Act
With v O’Flanagan (1936)
Barton v Armstrong (1975)
Atlas Express Ltd v. Kafco Ltd (1989)
Royal Bank of Scotland Plc v Etridge (No.2) (2002)

Civil Law Act
Moneylenders Act 2008
Couturier v Hastie (1856)
Sheikh Bros Ltd v Ochsner (1957)
Raffles v. Wichelhaus (1864)
Business Law 2017/2018 Semester 2
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Chwee Kin Keong v Pte Ltd (2005)
Awang Bin Omar v. Omar Bin Ismail & another (1949)
ANZ Holdings Pte Ltd v Bina Puri Holdings Bhd [2013] SGHC 97
Forster & Sons Ltd v. Suggett (1918)
British Reinforced Concrete Engineering Co Ltd v Schelff (1921)
Lek Gwee Noi v Humming Flowers & Gifts Pte Ltd (2014)

Frustrated Contracts Act
Cutter v. Powell (1795)
Apportionment Act
Hoenig v. Isaacs (1952)
Hochster v De La Tour (1853)
Avery v. Bowden (1855)
Taylor v Caldwell (1863)
Condor v Barron Knights Ltd (1966)
Singapore Woodcraft Manufacturing Ltd v Mok Ah Sai (1979)
Czarnikow Ltd v Rolimpex (1979)
Davis Contractors v Fareham UDC (1956)
The Super Servant Two (1990)
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd (2007)
China Resources v Magenta Resources (1997)

Jarvis v Swans Tours (1973)
Heron II (Koufos v C Czarnikow Ltd [1969] 1 AC 350
Victoria Laundry Ltd v Newman Industries Ltd (1949)
Dunlop Pneumatic Tyre Co v New Garage (1915)
Warner Brothers Pictures Inc v. Nelson (1937)

Sale of Goods Act
Unfair Contract Terms Act
Rowland v Divall (1923)
Beale v. Taylor (1967)
Rogers v Parish (Scarborough) Ltd (1987)
Rubin Computer Systems Ltd v United Paints Ltd (2000)
Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd (1991)
Sun Qi (formerly trading as Power King International) v Syscon Pte Ltd (2013)
Eastern Distributors Ltd v Goldring (1957)
Business Law 2017/2018 Semester 2
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Copyright Act
Patents Act
Trade Marks Act
Jumbo Seafood Pte Ltd v Hong Kong Jumbo Seafood Pte Ltd (1998)

Business Names Registration Act
Partnership Act
Limited Liability Partnerships Act
Companies Act

United States Trading Company Pte Ltd v Philips Electronics Singapore Pte Ltd (2010)
Freeman & Lockyer v Buckhurst Park Properties Ltd (1964)
Keighley, Maxsted & Co v. Durant (1901)
Richardson v Williamson (1871)
Bertram Armstrong & Co. v Godfray (1830)
Mahesan v Malaysia Government Officers’ Co-operative Housing Society Ltd (1979)
Armstrong v Jackson (1917)

Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency (“DSTA”) (2007)
Hill v Chief Constable of West Yorkshire (1989)
Barnett v Chelsea & Kensington Hospital Management Committee (1969)
McKew v Holland and Hannens and Cubitts (1969)
Business Law 2017/2018 Semester 2
Copyright © 2017 Nanyang Polytechnic
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Law and Legal System

Law and Morality

Classification of law

Sources of Singapore law

The Singapore Court Structure
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What is law? What role does law play in our lives? Law is viewed by people in many different
ways. When asked that question, some think of the police, others think of rules that govern our
daily behaviour. These answers are all partially correct. Simply put, law may be simply defined as
a body of rules to be obeyed. While it is not possible for all of us to know each and every rule in
force in Singapore, it is advisable for us to understand some of the general principles of law, how
to avoid problems that are commonly encountered and when to seek professional legal help.
If Law is a system of rules then a legal system is made of rules as well as components that create
and enforce those rules. In Singapore, the legal system consists of the different legal institutions
(e.g. the law courts) and the laws themselves. The courts serve 2 important functions. First, they
provide a system by which those who fail to obey the law are punished. Secondly, they provide a
forum for individuals and businesses to resolve their disputes. For instance, a person suing another
for not fulfilling his obligations in contract would go to court to have his rights enforced. In
performing these functions the courts apply the relevant rules of law or in the absence of such
rules, develop new legal principles to maintain order. Once a court makes a decision, it has the
power, with the backing of the government, to ensure compliance.
Law should be distinguished from morality. Morality is based on generally accepted values that are
used by society to distinguish between wrong and right. Unlike the law, moral values are not
enforced by the government or by the courts. For example, there is no law in Singapore which
forbids adultery or abortion even though many people may consider such acts to be morally wrong.
The courts will only enforce a moral obligation if it is also a legal obligation.
The two most common types of law which you will come across are criminal law and civil law.
Civil law defines the rights and duties of individuals and businesses in their dealings with one
another. Examples of civil law include the law of contract and the law of agency. When the civil
law is violated, the injured party (known as the plaintiff) brings the dispute to court, seeking a
remedy from the wrongdoer (known as the defendant). If the court finds that the defendant has
broken the rules of civil law (for example, by breaching a contract), the court will hold the
defendant liable and order him to compensate the plaintiff for the loss or injury that he has caused.
Criminal law consists of rules which regulate the behaviour of people. It is concerned with the
punishment of criminals and seeks to deter people from committing crimes. The punishment
imposed under criminal law may take the form of a fine, a prison term or caning. For very serious
crimes such as drug trafficking, the offender may even be sentenced to death.
Unlike civil laws, criminal laws are enforced by legal proceedings brought by the government. In
criminal cases, the government is usually represented by the public prosecutor who brings the
alleged wrongdoer (known as the defendant or accused person) before a court for a
determination of guilt or innocence.
Business Law 2017/2018 Semester 2
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Criminal Law

Civil Law


Defines rights and duties of
individuals and businesses
To provide a remedy for a
private wrong
Penal Code (murder, rape)
Misuse of Drugs Act (drug
Prevention of Corruption
Act (bribery)

Contract Law
Agency Law

Public Prosecutor
Accused / Defendant

Plaintiff / Claimant
Proof needed to
succeed in a case

Beyond reasonable doubt

On a balance of
What the court

Not guilty

Not liable
What the court orders


Damages (monetary
Specific performance

There may be instances where certain conduct may violate both the criminal law and the civil law.
In such cases, the wrongdoer will be faced with 2 sets of legal consequences: he may pay a fine or
be jailed under criminal law and may be made to pay compensation under civil law.
Carrefour Singapore Pte Ltd v Leong Wai Kay [2006]
Leong was employed by Carrefour Singapore as a facilities manager. During his employment,
Leong received bribes of $292,800 from companies which provided services to Carrefour. The
bribes were given in return for awarding contracts to these companies.
Held:Leong’s conduct in receiving bribes had violated the criminal law. He was accordingly sentenced
to 10 month’s imprisonment and ordered to pay a fine. Leong’s conduct in receiving bribes had
also violated a civil law which states that an employee owes a duty to his employer not to receive
bribes. For breaking this civil law, Leong had to pay his employer Carrefour $292,800, the value
of the bribes received.
Business Law 2017/2018 Semester 2
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The roots of our legal system may be traced back to 1826 when English Law was introduced to
Singapore by the 2nd Charter of Justice. The laws currently in force in Singapore are derived from
4 sources:(a)
The Constitution of Singapore;
Legislation (statutes) enacted by Parliament;
Subsidiary Legislation; and
Common Law.
The Constitution, statutes and subsidiary legislation are referred to as written law whereas the
Common Law may be referred to as unwritten law or “Judge made law” as explained further in
paragraph 16 below. For purposes of this module, “law” excludes religious law or customary
The Constitution of Singapore
The Constitution establishes certain basic principles relating to the structure of government, the
law of the nation and the fundamental rights of individuals such as the right to personal liberty,
equality before the law, freedom of religion and freedom of speech.
The Constitution is the supreme law of the land which means that any part of a law which does
not agree with the Constitution has no legal effect
In Singapore, the system of government consists of the Executive, the Legislature and the
Judiciary. The Executive is made up of the President, the Prime Minister and his Cabinet. The
Legislature consists of Parliament and the President. The Judiciary consists of the judges of the
Supreme Court and the State Courts.
These are written laws enacted by Parliament in the form of statutes (also sometimes referred to
as “Acts”). Examples of statutes that are relevant to businesses include the Business Registration
Act, the Companies Act and the Employment Act. An Act may be amended from time to time
in order to keep pace with developments in technology and the business environment. In addition,
existing statutes may be cancelled and new statutes passed by Parliament.
Subsidiary Legislation
A statute may sometimes give power to a Minister or administrative body to make additional rules
or regulations for specified purposes. These additional rules and regulations are known as
subsidiary legislation.
The differences between Statutes (or Acts) and Subsidiary Legislation lies in the fact that acts are
created with a broad purpose in mind with the subsidiary legislation being the detailed rules or the
steps to make that broad purpose become a reality. For example the National Environment
Agency Act (Cap 195) (“NEA Act”) states that one of the objectives of the National Environment
Agency is “to identify and conduct investigations into and surveillance of infectious agents”
Business Law 2017/2018 Semester 2
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(section 11 of the NEA Act) and the subsidiary legislation or rules created under the NEA Act are
to make that objective a reality.
Common Law
The common law is judge-made law or case law. After a judge has finished hearing a dispute
between two parties, he will prepare a written judgment. In his judgment, the judge may lay down
certain legal rules or principles. These rules become part of the common law.
The Common Law is based on the Doctrine of Binding Judicial Precedent. It is best
understood this way:(a) When a judge is deciding a case that has already been previously decided by a judge in another
case and the facts are similar, the judge should follow that earlier decision so that his decision
is consistent or in harmony with the earlier decision.
(b) Where the earlier decision is made by a judge in a court that is superior to the judge deciding
the current case, that judge has to follow the earlier decision. He has no choice in the matter,
this is known as the Doctrine of Binding Judicial Precedent.
The doctrine of judicial precedent is important as it helps to ensure consistency, fairness and
predictability in the application of the law.
EXAMPLE:The Civil Law Act requires leases of land to be in writing and signed by the party to be made liable. Otherwise, the
lease is not legally enforceable.
In 2010 Company A sues Company B in the High Court for compensation for breach of contract. Company A
alleges that Company B had wrongfully backed out of a lease. There is no formal contract signed by the parties.
However, the terms of the lease are clearly stated in the emails exchanged between the parties and the parties’ names
are printed on the emails. The High Court rules that Company B is liable for breach of contract as the exchange of
emails is good enough to meet the requirements of the law.
In 2012 Company C sues Company D in the District Court for compensation for breach of contract. Company C
alleges that Company D had wrongfully backed out of a lease. There was no formal contract signed by the parties.
However, the terms of the lease are clearly stated in the emails exchanged between the parties and the parties’ names
are printed on the emails. Following the doctrine of judicial precedent, the District Court must hold Company D
liable for breach of contract since the facts of both cases are substantially similar and the High Court is superior to
the District Court.
Court of First Instance vs Appellate Court
A court may be classified as a court of first instance or an appellate court. A court of first
instance is the court where the parties’ dispute is first heard. If a party to the dispute is not satisfied
with the decision of the court of first instance, he may appeal against the decision in an appellate
Business Law 2017/2018 Semester 2
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Jurisdiction refers to the limit of a court’s power to deal with different types of cases. For
example, in civil matters a Magistrates’ Court’s jurisdiction is limited to hearing claims of not more
than $60,000. It does not have the jurisdiction to hear claims of more than $60,000.
The Singapore court structure consists of 2 levels:(a)
The State Courts;
The Supreme Court (which comprises of the High Court and the Court of Appeal).
Please see the State Courts website at
For a more detailed explanation of the different courts that collectively make up the State Courts.
For the purpose of this Module, we will pay closer attention to the Small Claims Tribunal, the
Magistrates Courts and the District Courts.
Small Claims Tribunal
These courts have limited jurisdiction. The Small Claims Tribunal may only determine a dispute
if (a)
The dispute concerns:(i)
A contract for the sale of goods;
A contract for the provision of services;
A contract for the lease of residential premises which does not exceed 2 years; OR
A claim for damage caused to property (damage affecting motor-vehicles is
If the claim does not exceed $10,000. The claim can be further increased to $20,000, if
both parties agree in writing that they would like the tribunal to determine the dispute; and
The claim is brought within one year from the date the plaintiff is entitled to claim.
Proceedings at the Small Claims Tribunal are conducted in an informal manner and lawyers are
not allowed to represent the parties to the dispute. The parties conduct their own proceedings
before a Referee who is legally trained.
A party who is not satisfied with the decision of the Small Claims Tribunal may appeal to the High
Court on a question of law (i.e. where the Referee applies the law wrongly).
The advantage of using the tribunal is that it is cheap and disputes are resolved quickly and in an
informal manner.
Business Law 2017/2018 Semester 2
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Page 10
Magistrates’ Courts
These are courts of first instance with magistrates presiding over the dispute. The Magistrates’
Courts have power to hear both civil and criminal matters.
In civil matters, such as claims for breach of contract, a Magistrate Court’s jurisdiction is limited
to claims not exceeding $60,000. .
A party who is not satisfied with the decision of a Magistrates’ Court may appeal to the High Court
where the amount of the claim is more than $50,000. Where the amount of the claim is less than
$50,000, the dissatisfied party must first obtain the permission of the Magistrate’s court before he
can appeal.
District Courts
These are courts of first instance which hear both civil and criminal cases. In civil matters, a District
Court’s jurisdiction is limited to claims not exceeding $250,000. A party who is not satisfied with
the decision of the District Court can appeal to the High Court where the amount of the claim is
more than $50,000 (or with the permission of the District Court if less than that amount).
From 1 Dec 2016, the jurisdiction of the District Courts will rise from $250,000 to $500,000 for
claims in road traffic accidents and injuries due to industrial accidents.
The Supreme Court consists of:(a)
The High Court; and
The Court of Appeal.
The High Court
The High Court has unlimited jurisdiction in all kinds of civil and criminal matters except those
matters (such as marriage, divorce or distribution of property) relating to the Muslim community
which are dealt with by the Syariah Court.
It is usually presided by a Supreme Court judge when the court is in session.
A party who is not satisfied with the decision of the High Court can appeal to the Court of Appeal
if the claim exceeds $250,000. Where the claim is $250,000 or less, the party that wants to appeal
to the Court of Appeal must first obtain permission to appeal from the High Court or the Court
of Appeal.
The following types of cases can only be heard by the High Court:(a)
Admiralty matters
Company Winding-Up Proceedings
Bankruptcy Proceedings
The High Court is also an appellate court and hears appeals from the Subordinate Courts in both
civil and criminal matters.
Business Law 2017/2018 Semester 2
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Page 11
The Court of Appeal
The Court of Appeal is an appellate court. The Court of Appeal hears appeals against judgments
of the High Court in civil and criminal matters whether the High Court is sitting as a co …
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