Princi pies of
Singapore
Busiuess
Law
UY
LOO WEE LING
...
CENGAGE
Principles of Slngapor,e
Business Law, Third Edi tion
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Loo Wee Ling
PRINCIPLES OF
SINGAPORE
BUSINESS LAW
O 2020 The Authors
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This page inremio11a//y left bhmk
To Our Students
Conttnts
Contents
Preface to the T11ird Edition
List of Autlwrs
Table of Cases
Table of Si11gaporc tegislatio11
Table of Foreign L-egislntion
Table of Treaties 11nd Conventions
ix
xi
Chapter 8
Consideration and Intention to Create Legal Relations
Loo Wee Ling
199
Chapter 9
Capacity and Privily of Contract
Loo Wee Ling
233
Contents of Contract
Chapter Hi
xiii
xxxv
u;;
Terms of the Contract
273
Loo Wee Ung
Chapter 11
Iv
Exemption Clauses
George Slwioy & Dorws Quek Anderson
311
Vitiating Factors
PART I
INTRODUCTION TO BUSINESS LAW
Chapter I
Business, Society and the La\\r
Gary Chan & foge11e K /j 1rm
Chapter 2
An Overview of S.ingapore Legal History and Development
3
25
Et,gene K B 'ffHI
Chapter 3
Legal Processes and Institutions
Gnry C/inn
41
PART II
BUSINESS CRIMES AND BUSINESS TORTS
Chapter 4
Business Cri1nes
Low Kee Ytmg & Mclinfl Chew
69
Business Torts
Lee Pey Wom1
87
Chapter 5
Chapter 6
PART Ill
Negligence
Gnry Chnn
341
Chapter 13
Misrepresentation
I.ow Kee Ym1g
373
Chapter 14
Economic Duress, Undue Influence and Unconscionability
Pearlie Koh
397
Chapter IS
Illegality and Public Policy
Aune Magdnliue Netto & La11 Kwan Ho
425
Chapter 16
Perforn1ance and Breach of Contr;;lct
Discharge of Contract
455
Alvin Sec
Chapter 17
Frustration
Low Kee Ynng
479
Chapter IS
Remedies for Brench of Contract
Alvi11 See
499
THE LAW OF CONTRACT
Offer nnd Acceptance
Mistake
Lee Pey Wom1 & Keuuy Chug
125
Comparative Contract Law
Formation of C.ontract
Chapter 7
Chapter 12
Chapter 19
167
Comparative Contract Law
527
Howard Hul!ler
George Slie11oy & Eunice Cluw
Vi
Conttnts
PART IV
SPECIAL AREAS OF BUSINESS LAW
Chapter 20
Agency
Penr/ic Kolr
559
Business
583
Chapter 21
Penrlie Kolr
Chapter 22
Sale of Goods
613
Steplren Bull
Chapter 23
Intellcctual Property
673
Saw Clreng Lim & Gladys Tan
Chapter 24
Information Technology
715
Warren Chik
Chapter 25
Chapter 26
Co1npl!tition Law
Hnwnrd Hunter
749
International llusil,ess
777
Austin P11/ltl
Subject Index
821
vii
711is page i111e111io11ally left bhmk
Prcftoe to the Third Edmon
Preface to the Third Edition
In 2006, the idea lor the Principle.< or Singapore Busincs. L•w was born. II took
root from a desire to have a >Uitablc textbook for non-low undergraduates taking the
Rusincss Law course 111 the
Management University (SMU). 'Ille
was
10 go beyond laying out basic principles of Singapore business law 10 engaging the
student in deeper reflection of some of the more compkx legal is>ues. 1 his vision was
set in motion when I.ow Kee Yo11g, then Interim Dean of the soon· to·be SMU School
of Law, encouraged
and my erstwhile colleague, George Shenoy, to helm the
project as cO·ednor• An initial team of 16 faculti• and one adiunct member of the
School of l.aw brought their years of experience In pracuet, mdustry >.od academia
together m the \\Tiiing of the first edition of 2009.
As we embarked on the proicct, we rt:tlised th•t the lay business pcr>on, apart
from Business Law ;tudents from SMU or other 1erllary
would have
use for such a work. And so the needs of non-law students •nd the wider business
community were reflected in the choice of topics in the inili.11 and subsequent editions
of the work. The;e included essrntial topics in contract lnw, bu;iness torts and crimes.
and selected lop1cs of relevance to business such ai: ngcncy, business organisat ions.
i11tclltctual property, information technology :md compctllion lnw. 'lhe topics of
comparative co111roc1 lt•w and International busines< provide the global persp<"<'.live so
Breach of Contract: rrspcc1ivtly. by Alvin See. Several (other) nt\v authors - l!unice
Chua, Dorcas Quek Anderson. Gladi•s Tan and Kenny Chng - came on board to
update and add their wisdom to txi>ting chapters.
The many who have faithfully contributed time and effort in brmging out th1>
enhanced third edition deserve my hear1re1t thanks. My special thank< go to 1he
authors for their kind cooperation and dcdicn11on in this endeavour, despite their
bu>y schedules. Special thanks too •re due to the publishers, Cengage Learning
nnd their staff, in pal'liculor their Senior Bdilorial Manager, Han l.rnn Siew, nnd
Senior
Editor. Kennclh Chow, for Iheir unwavering eJTorts in ensuring
a volume we can be proud of.
111e previous editions have served our inlended readers well • student< ond
imtruclors of S.\·I U and other educational 1mlilutions, and lay business person>. My
hope is that the third edition wtll do hkeMse.
School of Law
Singapore Management University
July 2019
Loo Wee Ling
/!t/11or
in Ihb crn.
We worked 111 features to aid understanding of the kgal concepts - diagrams,
table< and figure' 1ha1 help to illu1mna1e the inter-relauon<h1p of the many legal
rules, and 1llu.irat1ve c.s .. to pro,,de elucidation. 'Reflec1mg on the law' boxe< serve
to nudge the tt•drr to think about the more complex but
..sue> and the
unsettled ones. We 1001. can- 10 reduce lcg3lese, where po>S1ble.
The $UCCess of the lim edition saw the bringing out of the •tcond in 2013. With
the retirement of George Shenoy. I now bring to you, •• the •ole editor. the third
ed111on In 2019. ·n1e law i< as st.a1cd on 4 May 20t9.
As with the first and second editions, it is a collective effort. We sought 10 do
rnorc
updutc the Jaw; we )Ou,ghl lo in1prove upon the previous editions., ntaking
change> to enh:111ce the pedagogical v11lue. In line with 1111>. o nu mber of
in
the 3rd cdilion were porlinll)' 01• suhslnntialli•
·111rcc choplrrs were writlen
anew - Chapter 4 on 'llu;iuess Crimes' by Low Kee Yang and Melina Chew, ond
Cha1>ter• 16 and 18 on ' Perfo1111once. Breach and Agreement ' ,md 'Remedies for
x
list of Autho"
Sow Cheng Lim
UM (U"'-5.ty of camtiridge). Advocalt & SolocllO< (Singajlo<e). Associaie Prol9$SOI' of Law (SMU)
George Shenoy
List of Authors
PhD (London), Advocate (Bombay High Court), f0<mtr AHoaate ProfesSot of Law (Prectoct) (SMU)
f;ugcne K B Tan
JSM (Stanford), Advocate & Solicitor (Singapore). Auoclote Profe"°r of Law (SMU)
Stephen flull
LLM (Harvard University), Soflcllor (England & Wates), Attorney·•t·law (New Yotk), Barrister and
Solicitor (New ZeoJond), Assoclote Professor of Law (Practice) (SMU)
Alvin See
BCL (Oxfotd), LLB (L8<1ds). Associate Profouor of law (Educatloo) (SMU)
Gary Chan
LLM (SOAS, London), Attorney & Counsetor-at-law (New YOl1<), Advocate &
Profes$0f o1 l.fw (SMU)
Sol""'°' (Singapore),
Eunice Chua
LLM (HatVard University). Advocate & Solle/tor (Stngap0<0), former Asslslant ProfesSO< of Llw (SMU)
Gladys Tan
WarrcnCh1k
UM (U""'-«y
London), LLM (Tulane UnlY.,...ty), Advocalo & So1oci10<
Attorney end Counselot-ot-law (N- Yori<). SoficilOf (England & W.IH). Associate Professor of Low
(SMU)
JO
Advocate & Sohator (S.ng-t). 8Sc (tlons). lltt Saencos (Biorneclal S<>tnc.)
(NUS). DwtCOOr. David lJewelyn & Co LLC Advocalos & Sohators
Howard Hunter
LLM (Harvard University). ASSistant Prot.soor of law (SMU)
KcnnyChng
JO, Yale u·ntvtrslty 197l, Protessor of Lew Emeritus and former Dean (Emory UnivertJty), former
ProfesSO< of Law and PrHl<font (SMU).
Melina Chew
LLB (Slngoporo Management Unlveralty)
Pearlie Koh
LLM (Melbourne), Advocate & Solicitor ($/n9apore), Associate Profo11or of Law (SMU)
Dorcas Qllck Andem)n
LLM (Harvard University). Advocate & Solicitor (Slngop0<0), Assist ant Professor of Law (SMU)
Lau Kwan Ho
LLM (Now Voli< Unlv1<11ty), AdllOCllte
& $oi>Citor (Singapore), A11J1tont
ProftllOf of
Low ($MU)
Lee Pey Woon
BCL (O•lotd), AdVOC<ltt & Sollator (Songopore). Associott Proft110< of Low (SMU)
Loo Wee Ling
UM (Sydney). MVOC<ltt & Sollc:ilOf ($ongopore). Astoe:tott Pfolt110< of Low (Educetoon) ($MU)
Low Kee Yang
PhD (K1ng'1 College, London), Advocate & Solicitor (Songoporo), A11odatt Proft110f of Law ($MU)
Anne Magdali nc Neuo
PhD (K\119'1 College, London), Barrister-at-Low (Lincoln'• Inn), Advocott & Solicitor (SlngePQre),
Former Adjunct Faculty (SMU)
Austin
$JO (Harvard),
(SMU)
(Dost of Cofumllta), former As1odalo Profo11or of Llw (Praoctice)
xii
Table of Cases
Table of Cases
A
A Schr0tdcr Mu>lc l'ubll'h1ng Co Lid v Macaula)' IJ97-I) I WI R IJ-08 ... , .••..•.•• IS.S7
Abuse of• l>ollltnan1 Po'11ion bi• SISTIC.com Pie Lad, CCS 6001008107 (4 June 2010)
. . • • • • • • • • • • . . . • . • . ..
25..JO
llCR v 1hom«>n M«l1ul Pte IAd (20171 I SLR 918..... . • .. .. .. . • .. .. ......... 18.32
ACCC v April lnt'I Mk1g Servs 120111FCA153. ...... ....... ........
. Box 25.1
Adam,. W•rd 119171AC309 ..
.. . . ... . .. . .. ..... , ........ ••. .. .•. 582
Adam• v Cop< lndu,1rl•• pie I 199012WLR657...... ., ............... ., .......... 21.27
Adams v Llnd<ell (1818) I 8 & Aid 681 .. .. .. . .. .. .. . .. .
.. • • .. • .. .. . .7.62, 19.23
Addt< v Gramophone Comp•n)'. Lid I 19091 AC 488. . , • , , , , •. , . . . . . . . . 18.28
AcrO·G•lc PI< I.Id v lmgetl MJrinc Engineering Ptt IAd 12013] •I SIR 4119..•... 16.50. 18. 11
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Lad and Secuncor (Scotland) Lld
I1983] I WLR 96'1 ... . ... . ............ . ............. .......... ....... 11.29, 13.56
Airbus lndus1rlc GIF. v l'Mci I 1998) 2 IVl,R 686 ........................ . ......... 26.27
Akerhiehn v De More I 1959 I AC 7139 ....................... . ...................... 13.20
Alboiero, 1hc I 19771 AC 774 ..................... , ......... 9.71. 9.72. 9.73, 9.74. 9.76
Albrecht '' limld GQ, 390 US 145 ( 1968) .... .... .... .. ... ..... ... . . .. .... llox 25.2
Alcoa Mineral< of l•m•i<• Inc v Broderick J2002I I AC 371 .•...•..•............. .. 6.77
Ake 1..obb (G>ragc>) IJd v Total 0<1 (Great Britain) Lid 1198311 WLR 87: affirmed
11985) 1 WI R 17.1 .. . .. . .. .... .... .. .. • . • . • . . • . .. . . 14
14.55. 15.59
Alt\'. 'lhc 119891 I Llo)d-. Rep 138 ............ .. . .. .. . .
. . .. ...... 14.9
Altxand<r v Rl)-.on 1193611 KB 169. • • . . • . .. .. .. •••• , ......... , • .. 15.12
Alfr«I McAlp1nc Con,lructic>n I 1d ,. Ponalown IJd 120001 3 \\1 R 946. , , .••.. , •.•.. , 9.7J
AllCJrd v Sltnn<r (1887) 36 Ch D 145.................. ..
.. . 14.31, 14.39
Allen v Gold Reefs of Wm Afnu Ltd 119001 t Ch 671 . • ,
.. .
• . • 21.6-1
Alh•n• lnsur•ncc Co
v Aii;••on lnsuroncc Co SA [20081 f\\'CA C1v 1455.. . •. 7.SJ
Allplu> llolJmg• Pt< Ltd v Phoon Wui Nyen 120 161SGHC144 .. , .. ... .. ...... 18.52
Aloe Vera of An1cnca, Inc v Asiank Food (S) Pt< Lad 120061 3 Sl.R 174 , ..•. 26.11>2. 26. 103
1\hogotf v Robin
Ml.) 56......................... , ........... , ........ 12.29
Aluminiu1n lndwitric Va.1s...cn HV v Romt,Jpa Aluminium 1,,td I 19761 2 All Elt 552 .. ... 22.7 1
Alvin Ni<hollls Nathan v Rallles /\.,.,, (Singllpore) Pie l..1d 120161 2 SU\ 1056 , • , , , , . , . 18.3
Anderson L11I v D:rnlcl
. .... ...... ..... . ........ . ............... . 15.9
Angila 'lclevi>lc>11 Lid v Rced 11 97211QB60.................... , ....... IH.IO, Box 18. 1
Animal C<>nccrns Re•c•r<h & Edurnlion Sodeiy v Tan 80011 Kwcc 12011) 2 SLR 146••.. 6.39
Anns v MertOll I ondon llorough Council [19781 AC 728 .. • .•. , 8, 6 9. 6.12. 6.13. 6 JS
Anh Con ""°" l'lc l.td v Bergrr P•lnl• Sing•poro l'le l.td 120121 I SI R 427. . . . . . . . . I I.I I
Anwu Palnck Adrian v Ng Chong & Hut LLC 120111 3 SLR 761.
. . ,. •• ••
6.18
15 23
Aqu• Art Ptc Lid'' Goodmon lXHlopmenl (S) Pie Lid 12011 ) 2 SLR 865.,
Areo<. Lad v EA Ronaascn & Son )19331AC470 ..................... 16.7. 22.31. 22 43
Ar<lle Shipping Co Ltd v Mobtho AR. The Taira 119901 2 Llo)'d"s Rep 51...
, 2012
Amu1rong v Jackson (19171 2 Kii S22 . .. .. .. .. . .. . .. .. .. . .. • ..
• 20 45
Arm.<1ro11g ' ' S1roin 119521 I KR 232. .... . .. . .. .. ........................... , 13.33
ARS v ART 120151 SGHC 78 ....... ,......... .. .. .. . • • .. . . . . . .. .. .. . . • . . . • .. .. S JO
An•I Chandrnn v Chew Chm Aik (Suil 1896 of 1998. judgmml doted 19·06-200-0). , , . 5 67
Mui Chand ron v Garish ore [20001 2 SLR 446.. .. ................................ , 18 28
Ashford Shire Council v Dependable Motor< l'ly Ltd I 1961 J AC 336.......... . ....... 20. 11
1\>hluck Wilham Grover v SctClcor i'lc I.Id (20 121 2 SLR
.• .. , . ... •. ,, •. .. .... , .. 26 28
Ilotel l
Ltd v Srnrwoud A11io l'adfic Managtn,e1t1 Pie Ltd
120051 I SlR(RJ 661 .. .. . .. . • .. . • .. . .. ............................ 18 23
A>t• Pacific Publishing Pte Lid v P1onc<r's & Leaden (Pubhmcu) Ptc Lid
1201114SLR 381 ......................... .. ................ 23.S. 23.116, 23 118
A>bkson v Home S.vings Ass'n, 416 Nl\12d 786 (MNApp 1987)... .. ... . . • . •
19.7·1
Ai..<$0('.iatcd Electric & Gas Insur.a.nee Scr,1ic« Lid '' Europc.m Rc1nsur.mcc Comp.iny o( Zunch
120031 I WLR 10-ll .. . . • . • • • •
• • .
. . ... . ... . .. . . .......... •• . .• 10 SO
A>SO<tat«I lapaJ\CR Bank (lmernauon>I) Lid ' ' Cml11 du l\onl SA
(198911 WLR255
,
• •
.
... 12.16.12.17, 12H. 1229
A')-lum (Colombia v Peru) 1950 ICI 266.. . . . .. . .. . .. .. . . . • . .. . .. . • • . • • .. •
26.7
Ali01 E.<prcss Lid v Kafco (Importer> and D1m1bu1ou) Lid I19891 I All ER 641 . . .. I U
Allorncy Gener.ii v Blak<l20-01 I I AC
. .. . .. • .. • . . . • .. . • .. .. . ..
18 S9
AUVI Trodcmark. Re I 19921 I SIR 639............ .. .. .. . . . .. . . .. . • • . .. • . .. • . . . • 23 11
Aw•rng bin Oollah v Shun Shing Co11>truclio11 & hngine<ring Co Lid I 19971 3 SLR 677
.. . ... .. ... . ... . ......... '' .• ' ' . . ' . . . ....... . ... . ... .. . ' . .... . ' .. ' 6 62
B
112C2 Lld v Q11oine Pie Lid 12019) SGl lC(I) 3.. ..... ..... ........ ....... ..
. llox 123
Baker v Wil loughby I 19701 AC 467......... , .. . ................. . ................ , 6 72
Balfoun• Balfour 1191912 KR 571 ..........................................8.71, 873
Rank Lmc v Arthur Capel 11919) AC 435 .
.
.• . ... ..
.
•• 17.36
Bank of Amen .. v Ojoni \l"od13ja (19941 2 SIR 816. . . . . .. . • . .. . . •.• • • • .. . • • 26 27
Bank ofCrt<l11 and Commtrcc ln1ern•11011•l SA'' Aboodi• 1198912 WLR 159...•••. 14 ·10
Bonk of East Asia Lid. The v Mody Sonal \I 120011 4 SLR II 3 • • • .
IH). H 19
R;nk of Ind•• v Roi Bohadur Singh
I SLR 328 .. . ............ , • , • , ••• 9.1
B•nncrman v Whllc (1861) 10 CBl\S 841. ••
.
. . ................ 10.27. 1340
R•nque RruSS<ls Lamben SA v Austr•han :-1211on•I lndustne< Ltd (1989) 21 NSWLR 502
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S78
Barcelona Tnction. Ligh1 and Power Com1i.11)'. Lim11cd (8clg1um v Spain) (1970) IC) 3
· • · · • ........ • · .. • .. · · .. · .. " · · • .. · • · ..
· · • .. · • · .. ·.. . • . .. .. ..... 26 IS
Rord.1y; R.ink Pie v O'Rrien (19941 I 1\ C ISO .............. . ................ , . 14 47
B•irker v C<>rus (UK) pk 120061 2 AC 572 ... . .. , ........ , ........................ 6.70
Barnes & Co v Toye ( 1884) 13 QIJD 410, , .. ,, .• , .......... , . .. ....... ., ........... , 9. 19
llnrneu v Chelsea & Kcnsing1011 llospli.1111%9) I Qll 428 ......... . ....... , . . , ... .
"'"""''' Armstrong 11 9761 AC I04 ........................................ 14.3, 14 23
B•sil Anthony Hermon v l'remler Security Co opcrauvc Lid 120101 3 SLR 1IO., ..• , . S.74
Reale v TllylorJ 1967)3 All FR 253.... .. • .. . .. • . • .. .. .. . • .. . . • .. . .. .... 22 44
XJV
Table of CoS<S
Table of Casts
Beatun· E & F Buuoe Ltd (1938( Ch i08 .. . . . .. . .. •
21.60
ll«kkcll Pte Lld " O.u1sche Bank AG (2009) J SLR(R) 4S2 .
. .•• 534
B<e<hanl Group Un111td'• (Am<><ycillin) Applicauon (1980) RPC 261 ..
.. ....... 23.55
Beihai Zlngong Propeny Devdopnirm Co v Ng O>oon Meng
(1999) 1 SI R(R) 527 .. .. .. . .. .. .. .... .. .. .. . .. . .. . .. .. .
.. . !ft.S I, 18.53
Bell
Corp '' 1\•·omblcy (2007) 550 US 54-4.. . . . . . • • • . . • • . . •
. ••••.•••• 25.8
Bell v Lever Brolhm, t1d 11932) AC 161 .... .... . .. . .... .• . .... 12.IS, 12.18. 12.25, 21.54
Benlcn Pie Lid v Au1henhc llu1lder Pie Lid (20 18) SGllC 61. .. , .. , , .. , .......fl.38, 8.4 J
Rcuneu, F.x park ( I
32 l!R 893 ................... ........... . ... .. .. .. .. ..... 20.46
Beswick v Beswick I J96R I AC SR ... .............. ... ...... .. .. .. .. 9.SI, Box 9.3, 9.58, 9.69
lligos '' llr>u,lcd I195 II I All eR 92. . .. .. . .. . . . .. .. . . . . . . .. . .. .. . .. . . .. .. . .. . . .. . 15.26
RNJ v SM lff 'lrohu I.Id 120141 2 SD.R 7 ' ................... .. ' .......... '' .. '' .... 6.23
Bolam v Fricrn I lo>phal Management Commiute ( 1957) I IVLR
. .. .. .. .. , .. , • , .. .. .. .. . .. .. • .. .. .. . .. .. . .. . 6.53. 6.57. 6.58, 6.59, 6.60
Boli1ho v C11y •nd llockney lluhh Au1hority ( 19981 AC 232 .............. 6.58. 6.59, 6-60
Bohon
Lomb<rl (1889) 4 J Ch !.> 295 .. . .. ...
.. .. 20.24, 2026
.... ....... ... .
.. . . . . 650
ROM ' ROK (20191 I SIR 349...........................
• H .29, H .57,
Bond Worth Lld, Re ( 19801 Ch 22ll .. .. .. .. .. . . • .. .. •
.. .. .. .. .. •
... 22.71
Bo"'""' Sh>nd (18n) 2 App Cu 455 .. .. .. .. .. ..
... .... • ..
22..19
BP Otl ' ' l'.1np1re F\lalal Pctrolc<>< 332 F3<1 333 (5th Cir 2003) .• , . • . . . •••••.•••••• 19.15
Bradbury v Morgan (I 862) I H & C 249.... ... .. .. . .. . ..
. .. . .. • • .. • .. .. .. .... 7A9
Rr.dcr D•rucl John '' Cammenb•nk AG (2014) 2 SLR 81 , . , • , . , .•••••.. , .. 838. 8 40
Bridsc v C•1n1>hcll Di>eoun1 [1962) AC 600 ..................... , . . .. .. . ... .. .. . 19.86
Brimelow v Ca.,on I J924I J Ch 302...................... ......... ... ........... 5.18
Brimncs, The ( 19751 QR 929. . . .. .. .. .. . .. . . .. . .. .. . .. . .. .. .. .. . . . .. . .. .... 7.37
Brinkerhoff M1m1lmc Drilling Corp v J>T Airfosi Scn•iecs h>done.la (1992) 2 1)1.R 776
.. ....... .. . ' ... ' ... ' . .. .. .. . ' ............ ' .. . . ....... ' . .. . ' .. . ' ... ' . .. .. .. . ' ... 26.26
Rrlnldbon Ltd v S1ohag S111hl und Stahlwarenhand<ls Grubl I ( 1983) 2 AC 34 •. . ••. . •• . 7.59
Brilbh Motor 'l'mdc Aw1ci111lo11 v Salv•dori (1949) Ch 556.. ....... .. . . • .. •• ... •. .. . 5.9
Brllish Northrop v 'lhltom I19741 RPC S' ....................................... 23. 11
British Sugar pie v fame< Robertson and Sons Ltd (J996I RPC 281 ..
. .. .. .. 23.92
Rritish \<\'c-.. 11nghou-,c Flcctnc and
Co Ltd v
f.l«tnc
Comp:my of London
(J912I AC 673... .. . .. .. . .. .. .. .. .. .. .. . J8.45
Bro3dl•y Conmucuon Pie Lid v ALman Design Pt• Ltd (20181 2 SLR 110
. .. . .. .. .. .. .. .. , .... ...... .... . ..
12.H. I) JS, U .JO. 13.60
Brogd•n v Mc1ropoh1•n
(I 8n) 2 App Cas 666. .. •
.. • .. • .. .. . 7.56
Brown'' Gould 119721Ch53 ... .... ... ... ... •
.. ... · · .. 7.80
Browning v Morn• (lnS) l Cowp 790............ .. ..
. ............. IS.21
Browning'' l'ro"lnclal ln.urane< Co of C.nada {1873) LR S l'C 263 . •
• •.•..•.. 20.36
Bryan v
(1995) 128 Al R 163 ......... .. . .. .. .. .. .. .. . .. . .. .. .. 6.38
Ruckman l,obor•1orlc. (A>i•) Ptc J,1d v Lee Wei lloong I J9991 3 SIR )33 .. .. . .. .. . 15.45
Bunge c:orpor.lllon. New York v 'l'radax Expo11 SA Panama I J9AI I I WI.I\ 7J J ........ J0.6J
Butler Mllchinc Tool Co v £x Cell 0 Corporntlon (Englnnd) Lid I J979I I Wl,R 40J
... . ....... .. ... , .. , , ... .. .. ................... .. .. ........... , . .. ... .... 7.74. Rox 7.2
Hui wick v Crttnl I 1921112 KH 4R3 . ............ .. . ................ , .. .. .. . , .. .. ... 20.33
Byrne v Dc.111< I19371 I KB 81S .. ....... .. ... ...... .. .. . .... , .. , ......... , ... , .. .. 5.65
Byrne v Vt1n '1lcnhoven (1880) 5 CPD 344 .. .. .. . .... .. .. , , .. , . .. .. .. . . .. .. • ..... .. 7.34
xv
c
CA.II Ttthnologi« Pit Ltd v N•w<on Builder> l>t< Lid (201712SLR940 ........ 1068, 16.J2
Cahco Prin1er> Ass«iaiion IJd v B•r<I>)" Bank (1930) 38 UL Rq> !OS KBD ........ 2049
Calhshcr vlhschotfmcnn ( 1870) l R 5 QB 449.. .. . .. . .. . .. .. . .. .. .. .. .. . • 8 26
Camp""ll v Park (1954) 2 DLR 170. .. . .. .. .. .. . . . .. .. . .. ..
IS 48
C•nada Ste,.msh1p Ltnes Ltd ,, R I1952) l All ER 305 ....... .11.31, 11.32, 11 34, 11.35, 11 67
Ct1paro Industries pie v Dickman IJ990l 2 AC 605 . ...... . 6.13, 6.JS, 6.25. Box 6.1, 6.31. 6.32
Cor & Univcrs>I Flnnnec v Caldwell ( 1965) I Qll 525 ... •. .. •• ....... •. ....... 22.76, 22.90
Corllll v Carbolic Smoke R•ll Comptmy I18931 J Ql1 2S6 ... ... .......... .. . 7.J2. 7.24, 8.J3
Cnrricrnet Global Ltd v Abkcy Ptc Ltd 120101 J SLR 454 .......... ....... .. .. .. .. .. . 9.M
Co•s• di Rlsammio della Repubbllca di San Marino SpA v Barclnys Bank Ltd (20 J 1I 8WHC 484
' ................................ . ..................................... 13.13, l) .)6
Co<>cll & Co Ltd v Broome (1972) AC 1027 ..................................... SSS
Ca<sidy v Daily Mirror Newspaper< Ltd ll929) 2 KR H I .. .. . .. .. . .. .. • ..
.. .. 5.S I
CMn1c Compon<nls Ltd v HtU & Smtth Ltd 11982) RPC 183. .. .... .. .. ......... 2361
CllS Sonv Lui v Amstnd Consunm l;.lttiromcs Pie ( J988) AC JOI).. .... • .. . • .. • S 29
CCS 400/001/08 (2 July 2008) .. . .. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. • .. • • 25.J6
CCS 400/002/0hnd 400/00)!06 (5 March 2007) • .. .. .. .. .. .. .. .. .. .. .
• 25 24
CCS 400/00J/06 (10 January 2007) •
.. .. .... ..
2510
COL Ho1els lntemauonal lld v Ponlloc Mann• Pie I.Id (199811 SLRCR) 975
. . . . . . ............ ..... ............. . ....................... . . . 23.111, 23.112
Cenirol London Proper11" l'rus1 Ltd v lligh 'h«• llouse
[ 1947) KB 130 .......... 847
Chai Cher Wan v SOL Techrtologi<> PI< Lid (20 121 J SLR 15.2 ..................... 22117
Chan Chee Kien v Perform.in« Molor<
l20J SI S(;Hc; 54 .. ............ ... 22.46, 22. 11 9
Chan Cheng Kuni v Wah Tai Bnnk Ltd I197 II I Sl.R 22 .. ... . ................... .... I0 54
Ch1111 Chen!! Wah v Koh Sin Chong Jorcclclle (20 12) I Sl.R 50'6 ........................ 5.S2
Ch:in Gek \'ong v ViolCI Ncllo l20ISJ SGI IC 20A .. ........ . .. ...... ...... .. ....... , 9.40
Chan Wing Seng v PP [J997I J SI R(R) 72J .. , .•..........••...•...• 4.47. 4.49, Figure 4.1
Chandran o/l Subbiah v Dockel'i Mo1rlnc Ptc Lid (20 10) 1 SLR ?86.. . . . . . . . . . . . . . . .. 6 S2
Chapchon v Barry Urban D1Slritt Co11nc1I I19101 I Kil 532. . .. . . .. . .. . . .. Box 7,3, 11 I)
Chaplin v
Frewm (Publuh<rs) Ltd I 1966] Ch 71 , . . . . • • . . • • . . • . . . . . .
9 26
Choppell & Co Ltd ,. Ne1tle Co Lid (I ll60) AC 87 . .. . . .
.. . .. • 8 8, 20
Ch•rpl• v Cooper (18-11) J3 M & w 252
..... • .. 9.17. 9 2l
Ch•nhrook Umtttd v P<mnunon Honm Umh<d (20091 I AC llOJ .. .. .. .. .. ..
J9.36
Chamr v Sullh= (19571 2 QB 117 .
22 104
Chuc" N<WS Group N<W>papers Lid 120031 l;.\1LR 218 .. . .. .. .. .. ... .... .. .. ..
5.53
Ch< Som b1• Yip v
Pt• Lld •nd anoihtr (1989) Sl.R 721. ................ .. • 940
0.ce« v 'lhomas (19941 1 All 1-.R 35 .. , .. , .. , .. .. • .. • .. .. . .. .. . .. .... .. ..
14 ·M
Cheng Alb<ri v 'l'.<t Wai Chun P•ul (2000) 4 11 KC I . .. . .. .. .. .. .. . .. • • • .. . ..... 5.74
Chm Kok Lr:ons v Pro;pcrl:md l'te Ud (20051 2 SIR 4114 ....................... 6.9S, 9 76
Chlmn Sec Tong v Ling llow Doong 119971 I SI R MS. .. .. . .. . .. .. .. .. .. .. ..... , 5 SS
rhln R11y Ching v Merchanl Vc111ute< Ptc 1.td [200SI 3 Sl.R 142 .. •. ... •. .. • .. . .. •... SS9
China l\csour<:cs (S) Pie Lid v M"gcn111 Re;our<r; (S) Pte IJd I19971 Sl.R(R) J03 . .. ... 17.35
Chn11 Suon Tze v Mini;tcr for 1lomc Allnl" I 1988) 2 SLR(R) 525 • . . . • . . . • • . . . , ••. 3.16
Chromalloy Acrosm1ccs ,. Arnb llcpubllc Fgyp1 939 F Supp 907 (DOC 1996) ... 26 IOJ
ChuJ Choon Ch<ng v Allgrcen Prop<r11« Ltd (2\HWI 3 SI R(R) 724 . . .
1051
Chua Keng Mong v Hong Really Ptc Lid 119931 ) >LR(I\) JJ7 ........ .. . ..
.. . . 18 46
or
Tabl• of Cam
Tabl• of Cam
Chua Kian Kok v PP [ 1999) I SLR{R) 826 .... . .. . ... . .•................•• . ......... 4.42
Chwce Kin KeOJlg v Digih111dmoll.oom Ptc Ltd (2004) 2 SLR 594, (2005) 1 SLR 502
... . .... . ... . ... . .... . ... . .. . ........ 7.21. 8.81, 12.27, 12.28, 12.29, 12.35, 12.36, llox 12.2,
. .. .. .. .. .. ... . ... .. .. .. ... . ....... .. ... 12.36. 12.37. 12.3$, 12.57. 14.2, 24.22. 24.47. 24.51
CIBC Mortg•ges Ltd v f'iu I 1994 I I AC 200 ..... . ... . . . .. ......... . .. .. .. .. .. .. ... I4.32
City Chain S10res (S) Ptc Ltd v Lo<0i' Vuillon Mallcticr (2010) I SLR 382 .. •. .. •. .. ... 23.91
CLAAS 1\!edical Cet)tre l't<-' Ltd v Ng Boon Chi1\g
(2010) 2 SLR 386 .................................... .. 9.59. 9.6 1, 15.37, 15.55, 15.61
Clarke Beryl Claii-e v SllkAlr (Singapore) Pte Ltd 120021 I SLR(R) I 136. ... . . . ... .. . ... 4.13
Clcarlab SG Ptc Ltd v Ting Chong Chai [2015) I SLR 163 . .. •.. . ••. . ... . 23.74, 23.75, 23.80
Clemen" v L & NW Ry I 1894 I 2 Q B 482 .......... .. .. .. ....... .. .. .. .. .. . ......... 9.25
Clunis v Camden and Islington Health Amhority (1998) QR 978 . ... .. ........... . .... 6.82
Clydebank Engineering v l)on Jose Ramo< (19051 AC 6 ... .. .. . ... . .. . . ••.. . .. .• .. . . I9.86
Coco v A N Clark (Engineers} l..ld I 1969] RPC 4 I .. .................... . ........... 23.73
Collen'' Wright ( 1857) S E&ll 647 ................ . ... ...... ........... ...... . .... 20.56
Collusive
for 1'ermile Control, CCS 600/008/06 (9 January 2008) •. .. ... 25.8, 2S. I8
Columbia Asia He.lthcore Sdn Bhd v Mong llin Kil Edward (20 1•1) 3 SLR 87 .. .. ...... 9.62
Comb v PayPal. Inc 218 FSupp2d I 165 (ND Cal 2002) .. .. .. .. .. ... . ... .. ... . .. ... .. 24.29
Combe v Combe ( 195 1) 2 KJI 215 ... ... . ... .. .. .. .. .. .. .. ... . ... ...... ...... .. S.10. 8.63
Comfort Manogement v PP 12003 1 2 SLR(R) 67 . . . ... . ................. . .. . ... . ..... 4.20
Commercial llnnk of Austrolia Ltd '' Amadio (1983) I 5 I CLR 447.. . . . • . . . • . . . • . . . . • . 14.56
Computer Aswcintc.< UK IJd v 'lhe Software Incubator Ltd 120181 EWCA Civ 5181. .... 22.9
Conor Medsysterns Inc v Angiotcda Pharmoccuticals Inc 12008] Rl'C 28 ... •. .. •. .. .•. 23.55
Consmol Singapore (l>te) Ltd v Ban.k of Arnerico
Trust & Savings Association
( 1992) 2SLR828 . ... . ....... .. ........... .. ...... . ..................... . ... 11.54
Co-01> lnsumnce Society l..ld v Arg)•ll Storts Holdings Ltd 119971 2 WLR 898 . ........ 18.63
Cooperatit\•e Centrale
BA (trading as Rabobank Jntrrnational).
Singapore l!r3nch v Motorola lllectroni« Ptc l.ld (20 1I ) 2 SLR 63 ... . .. .......... 7.8 1
Cope v Rowhrnds (1836) 2 M & W 149.. . ....... .......... ....... . ... .. .......... . 15.8
Coulls ,, !Ingot's E•ecutor and Trusiee Co l,td ( 1967) Al.R 385 ..................... Box 9.3
Courtney & Poirburn v Tobini Bros (Hotels) Ltd 119751 1 All E.R 716 ........... .. ... 22.2 1
Couturier v H•stie ( 1856) 5 lll.C 673 ... . .. ... .. ..... ....... ....... .. .. . .. . 12.11, 12. 12
Cowcrn v Nield [ 1912) 2 KB 419 ...... ....... .. . ...... ... ......................... 9.25
Cmnclc;m Properties Ud v Nosh (1977) 244 EG 547.. .. • . . . . . . . . .. . . .. .. • . . . .. . . . .. 13.58
Cm.swell v Poller I 1978) I WLR 255 . ... . ..... • .. ... .. . ... .. .. .. ... .• . •.. . ........
Cristian Priwim• Yocob v Wibowo lloediono (20 17) SG HC 8 . .. •. .. .•. . ••. .. •. . ••.. 18.56
Crofter Hnnd Woven Harris 'l\,.eed Co l.td v V<1tcl1 I 1942] AC 435....... . .. .. ........ 5.30
CTN Cash ond Carry l..ld v Gallohcr Ltd I 19911 4 All ER 714.• .. .•. .. • .. •. .. ••. . .•. 11.21
Cundy v Lindsny (IR78} 3 App Cas. 459. . ...... .. . ... . .. .. ............. . 12.48, Pigur< 12.3
Currie v Mlsa (1875) LR 10 Exoh 153 ............................ .. .......... . ......8.4
Curtis" Chemical Cleaning and Dyeing Co 1195111 KR805 ............... . .. . . .... 11. 10
Cutter v Powell (1795) 6 Term Reports 320 •.. .. ... •. .. •• ... . . , .. ... .. . 16.18. 16.19, 16.23
CW Conlinental Corp v Polee Ltd 120161SGllC224 .. . ... .. ... ...... .. .. . .. ... . .. 22. 125
Darby v Boucher ( 1694) I Salk 279 .......... . .. . ... . . ............................. 9.24
Dardan<1 Ltd v Y\lkos Oil Company (2002 I 2 Lloyd's Rep 326 ....••. .. •• .. •. . .•• .. •• 26. 10 I
Darlington Borough Council v Wil<.<hi1-e Northern Lid (1995) 3 All ER 895 .. . .. . . .9.72. 9.73
Darwish M K F Al Gobaisht v House of Hung Pte Ltd I 1995) I SLR(R} 623 .•.... .. ... 10.28
Dauila IAd v Pour Millbonk Nominees I.Id I 1978) Ch 231 ......................... Box 7. I
Davis Contraciors " l'archam UDC (1956] AC 696 .. .. ........... 17.6. I7.S. Box 17.1 , 17.24
DC Thomson & Co Ltd v Deakin I I952 I Ch 646 . . ... . ................. . .. . ......... 5. 13
De 8\lssche v All ( 1878) 8 ChD 286............................................... 20.48
De l'ran««:o v Bnrnum ( 1890) 45 Ch D 430 .............................. . .. . ... .. 18.63
De/ohn v '!he TV Corpora1ion lmernauonal et al 245 FSupp2d 913 (CD Ill 2003) ..... 24.27
Dcnnmk Productions Lid v Roscobel Produc1ions Lid ( 1967) CLY 1999 ...•...•....... 9.26
Derry v Peek ( 1889) U\ App Cas 337 ........... .. ... .............. .. .. .. .. ... .. .. I3.30
Devclopmmt Bank of Sing;ipore Ltd v Yeap Teik Leong I 198SI 2 SLR(R) 201 . . ......... 8.46
DHKW Mukcling v Nature:< F<mn Pte Ltd ( 1999) 2 SLR 400 ......................... 5.61
Dick Benlle)' Productions Ltd v Harold Smith (1965) I Wl.R 623 ........... . . .. ... .. 10.33
Dickinson v Dodd< ( 1876) 2 Ch D 463 .......... . ... . ... ...... ... ... . .. .. . .... 7.35, 19.29
Dickson Trnding (S) Ptc Ltd v Tronsmarco Ltd [ 1989) 2 MLI 408 .....•...•...•.... Box 7. 1
Doctor'$ Asso<intcs Inc ,, Lim Ens Wnh (1radi11g as SUllWAY NICHE}
120121 3 StR 193 . ... . ........ . ........... . ... . ............. . ... . .. . ........ 23.86
Donoghue" Slevcnson I 19321 AC 562 .•. . .• , ..•...•...•.. , ••.. 6.5, 6.6, 6.7. 6.9, 6.14, 6. 100
Douglas v IIcllo! l.td (2008) 2 WLR 920 ........... .. .. ........... .. .. .. .. ....... ... 5.37
Doyle v White City Stadium Ltd I 1935) I Kl! 110 . ... . .. ... ....... ... . .. .. . ..... .... 9.26
Or. Miles Mcdic"I Co v John D Park & Sons Co (1911) 22 US 373 •. .. •.. . •.. . •.. . Box 2S.2
l)unlop Pne umatic l)•rc Company. tin•ited v Kew Garage and Mo1or Comp;iny. l.imilcd
119151 AC 79 .... . .. .. .. . ........ ... ... . .. . ... . .. . ..... . .... . . . . IS.SI, 18.52, 19.86
Dynasty Lil\c Ltd (in liquidation) v Sukamto Sia 12014) 3 SLR 277 .. .. •. . ....••. . •.. 10.14
Dysart Timbers J,td v Roderick Willit1rn Nielsen (2009) 3 NZlR 160................... 7A8
E
Government of P:1kis1:m 12011 ) AC 763.
. ... .. .. .. .. ....... ........... . .. 26. 103
D•nicl v Dttw 120051 2 l'CR 365.. .. ... . ... . ... . ... . .. ..
. . ... . ... .. .. . ... . .... 14.26
EC Investment Holding Pte l.td v Ridout il<'sidcnce Ptc l.td 12012] I SLR 32 .• •• . , ••• 18.62
EC lnv.,.tment I lolding Ptc l.td v Ridout Rc>idcncc Pte \,Id (Orion Oil l,td and
Anothe<, iniervcncrs) [201 112SLR 232. . ...... .. . ....... .. ........ . .. .. .. . . 14.4. 14.9
Eastern Reso urce Management Services: Ltd v Chiu Teng Con.sLruction Co Pte Ltd
(2016) SGllC IM ............................................................ 14.4
Ecay v Godfrey (1947} HO I.I L R<p 286.. . .. .. .. . . ... . . .. .
. ... . . .. . .. 10.26, 13.40
Edgington v Fitzmaurice ( 1885) LR 29 Ch D 459 , .. ....... . ............ . ... . ... 13.8, 13.23
Edw'1 rd Wong Finance Co. J.td v Johnson. Stokes and Mosler (198'1) AC 296 ...•... 6.54, 6.56
lldwttrds v Carter (18931 AC 360......................................... . ......... 9.29
l'.dwin Hill & Partners v First National Finance Corpn I 19891 I WLR 225 .. ••. . ... . ... . 5. 19
Edwin1on Con1mcrcit\I Corporation \' Ts11vliris Russ (\.Vorldwidc Salv;i,gc & Towilgc) Lld
('Ihe Seo Angel) 12007) 2 l.loyd's Rep 517 .. .. ... . . .. .. .. . ... .. ... .. .. . ... .. ... I7AO
EFT Holdings Inc v Marint<knik Shipbuilders (S} l'tc Ltd 120 14) I SLR 860 ... . ... . ... . 5.34
Eia.n Tauber Pritchord v Peter Cook (19981 EWCA Civ 900 .......................... 10.31
Ei-Net 1,td v Yeo Nai Meng 120041 I SLR(R) 153 . .. ....... . ................ . .. .. ... 18.45
Eng Chioi Shoong v Cheong Soh Chin 120161 4 SLR 728 •• .. ••. . ••• . ••• .. •• . , ••. . ••• 16.24
En1ores Ltd "Mlles l'ar
Corpornlion I19551 l QB ll., .•........•...•...••. .7.57. ?.59
Esso l'ctrolc Ul\I Co l.ld \'
Garage (S1ourport) I.Id rI!)68) AC 269 .. .. . ... . .... Is.ss
of I.e.'(' Rui Feng Dominique Sarron. deceased v Najib Hanuk bin Muhan1n1ad Jl.llal
(2016 1 11 SLR •138 ...........................................................8.29
xvii
xvill
D
D&C Ruiklcr> v Rm f 1966) 2 Qll '617 .. . ... .. .. .. .. .. . ... . ....... ... . .. .. ... . .... 8.62
Dalh\h Real Estate and 'JOurism Holding
v Tiw Ministry of Religious Affail'S,
Tobi< of Cases
Table of Cam
Eug<ma. Thd1964I 2 QB 226... . . . . . . .. . . . . . . . .. . .
................. 17.39
fa'<ning !':cw< Assn" Pc1<r>0n. 477 FSupp 77 (DOC 1979)..
.. .................. 19.n
E\'Crgrttn lnt<rn•llOn•I SA v Volksw•g<n Group Sing•pore Pt< Lui
[200-11 2 SLR CR) 457.............. .......... ........ .. .. .. .......... 26.28
E"i•. The (No 2) {198J[ I AC 736 .. .. .. .. ....................................... 17. 10
George Mnchell (Chtsttrhall) Ltd v Fmncy Lock Sttds ud )19831 2 AC 803
II 16
GllSP Inc v AB Elmromc Lid (2010) EWllC 1828 (Comm).................. .
.. 7.76
Glahe ln1<rna1ional Expo AG v ACS Computtr Pt< Ltd (19991 I SLR 166. on appnl
[19991 2 SLR 620...... .... .. . .. .. .. . .. .. .. .. .. .. .. .. .. .. . .. .. • 17 40
Gl•morg.•n Coal Co v South Wales Minm' i"<de,.tlon (1903) 2 KB 545 ........... .. 517
c;la;brook Bros v Glamorgan County Council ( 1925) AC 270 ......................... 8.30
Go Dante V.1p v Bank Austrfa Crtdltanstah AG [20 11I 4 SLR 559 ... . .. . . ..... ....•.. 6.52
Godfrey v Demon Internet Ltd 120001 J WLR 1020 ................ .. .. . ............. 5 66
Goh Loy Kh im v Isabel Redrup 1\ gency Pte 1.td (20 171 I SLR 546 .................. .. . 5.77
. .......... 22.67, 22.68
Goldcorp Exchange, Re ( 19951 I 1\ C 74.. .... . .. . . .. .. .... . .. .
Golden Season Ptc u d v Kniros Singapore I loldings Pte Ltd 120 15) 2 SLR 751. ......•.. 5.S9
Goldsoll v Coldman 11 9151 I Ch 292 ............ ............ . .......... ...... ... .. 15.65
Goldsworth)• v Brickell 1198711 Ali ER 853 .............. ............... .......... 14.)7
Gore v Gibson (1843) IJ M & W 623 .. . .. .. • . .. .. .. .. . . .. . .. .. .. .. .. . .. . . .. . . 9 40
C'iov('rnmcnt of Zanz.ibar ,. Bri1h;h
(l.ancas1tr House) [2000] I \VlR 2333
.. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. • .. • .. ................ ...... ..... 13.5 1, 13.58
Go"emors or the Pc.bod)' Donauon Fund" Sir tmd..y Pul<inson & Co ud (1985) AC 210
F
Faccendo Chicken I.Id v l'owler [1 9871Ch1 17 .............. .. .. .. . ....... ... 15.42, 23.80
Fairchild v Cltnhavcn Funeral Services Ltd [20031 I AC 32 . . .. .. .. .. ••. .. •. .. .. ... . .. 6.70
Flu·lcy v Skinner [2002] 2 AC 732 . . . ... . ........ . ... . ....................... 18.31, 18.33
Fawcett v Smcthur.t ( 1914) 84 LJKB 473. .. ................ .. .. .. .. .. ..........
. 9.20
FE Global Eltctronin Ptc Ltd "Trek Technology (Singaporr) J>te l.td (20061 I SLR 8 74
....... . ......................... . ... .. .. .. .............................. 23.51. 23.61
Lands: Commis11oioner v Be1'1fot1 En1erprises l199RJ l SLR 855 .. ......... ...... 21.5
Fehhousc:" Rmdlc)' (1862) 11 CBNS 869 .. .. .. .. .. .. .. .. . .. • .. • .. ........... 7.69
Fenncn• Rlakc [1900) I QR 426 .......................... .. . .. . .. . .. ........ 8.55
Fibros• Spolu Akcyjn• v Fairbairn Lawson Combe Barbour, IJd )19431 AC 32
. .. .. . .. .. .. .. .. .. .. .. .. . .
17.42, 22.85
. .. . .. ..
Financong.< Ltd" Stim>On ( 1962) I WLR 1184.......... ... .. .. ..
...... 7.47
First "-'i• C.p11>l lrwt>tm<nts I td v
Ctnfrale S.nk & Tru>t (201 71 SGHC78 .. 10.14
First Cumncy Choict Pt< Ltd v M•m·Line Corporal< Holding> ud [20081 I SLR(R) 335
.. .. . .. . .. .. .. .........................................23.54, 2J.59. 23.61, 23.67
Fil'>t Energy (UK) 1.td v llungarfan lnt<rnational Bonk Ltd {19931 2 Lloyd'• R<p 194
.. · · . ............... .. .•. .. ...... .. .. .. .. . . ... . . .........•...•.......••. . .•. . Box 20.1
Fi<her v Rell (I %01 3 All ER 73 1 ............... . .................................. 7.26
l' ilch v Dewe< [ 192 112 AC 158 . ... . .......................................... . .. . 15.44
Flamelltc (S) l'te Ltd " I.am Heng Chung [200 114 SLR 557... .......... .......... .. . 23. 11
Foakes v llccr ( 188'1) 9 App Cos 6()5 .......................................... .f'l.13, 8.45
l'ong Maun Yee ' ' Yoon Weng I lo
I 19971 2 SLR 297 .. •. .. ... . ... . .... 6.54, 6.55, 6.89
Foo Jong l.ong Dennis v Ang Yee Lim Lawrence 12016] 2 SLR 287 .. . •.. .. •...•.. . ... . 8.75
Forciront Medical Technology (Ptc) ud ,, Modem·P•k Ptc ud 12006) I SLR(R) 927
........................... ..... .... ...... ........................ 10.44, 10.48, 10.SI
For,.n v Vtmon Communications. Inc 805 A2d 1007 (DC 2002). . • . •.••...•.. 24.27
Forstlm ng..kticsc:l•k•pc1 Vc'1• '' Butcher ( 1989) AC 852. . . . • . • . . . • • . • . . • 6 89
Frttman & tockyer v Buckhurst P• rk Propntics
ud (19641 2 QB 480 ....... 20.40
frost v The Aylesbury Dair)' Co ud ( 1905] I KB 608 ...
• . • . , . . . 16.4
...................................................................... 612
Gract Eltttncal Englnttnng Pte Ltd" To O.um l:ngmttnng Pt< Ltd (201811 SLR 76 • 662
Grant "Australian Knnung M1ll1 ( 19J6) AC 85 .. • .. .. .. .. .. .. . .. .. ..
22 4·1
G1tat P<ace Shipping Ltd v T»vliris S.luge I td 120031 QB 679
................ . 12.19, 12.20, 12.22. 12.23. 12.24, 12.25. 12.26, 12.27, Box 12.1. hgurt 122
Greene v Keener, 402 SEld 284 (G•App 1991 ). .. . .. . .. . .. . .. .. .. .. . .. . .. . • 19 29
Grl<t v Bailey ( L967) I Ch 532.. .. .. . .. .. .. . .. .. .. .. .. .. . .. . .. .. .. .. . .. .. .. .. .. .. 12 24
Gross v Lewis Hillman 119701 Ch 445 .. ... .. . ............ . ......... .. . ............ 1).27
Culf Pctroch cm Pte Ltd v Pctrotec Pte Ltd (20 181SG llC83 . ....... . ....... 8. 19, F1gur< 8.3
CWK W I v Dunlop Rubber Co 1.td (1926) 42 TI R
.... . .. .............. ........ . 5. 11
Gan Chtng Ch•n v C•n Meng Hui (2005] SGHC 55 .. . .. .. ..
.. .. .... 1439
Garnac Gr•111 Co Inc v llMF Faure & Fairclough l.td f l96il) AC 1130 ........... ..... 20.8
Gator Shlpprng Corpn v Trans -Asi>tac Oil SA (The Odenfield) 119781 2 Llo1·d» Rep 157
................................................................................ 16.57
Gaus>cn v Morton (1 830) 10 ll &C 731 ............................................ 20.60
G•y Choon Ing v Loh SZ< Ti Terence Peter (20091 2 SLR(R) 332
................................................. 7.8. 7.50, 7.74, llox 7.2. 8.41. 82. 14.59
Geier v Kuj11w11. Wc>ton & Warne B1·os (Tron<port) IJd f 1970) I 1 lo)'d'• Rer 364 ...... 11.17
Gcnelabs l) iogno>llC> v lnllitut l'>steur 120011 I SLR 121.. .. •.............. .. •..... 23.51
. ....•. 19.73
General £1rctrlc Credit Corp ,, Xerox. 490 NYSld 407 (AD 1985) .
Gcncrnl Tm:'' l'lre<tonc 1)•rc (197?) RPC 457 .................... ........ ...... 23.SI
H
I I P.rsons ( I ivcstock) Ltd" Uttley Ingham & Co Ltd l197S) QB 791 .. ............... 18.44
II R Moch Co v Rensseleor Water Co. 159 NE 896 (NY 1928) ................ ....... 19.61
Hadley v Baxendale (1854) 9 Ex 341 ..... 18.40, 1841, 18.42. 18.43. Rox 182, 18.44. 22.99
!lady H•rtanto ,, Yee Kit Hong (20 14) 2 SIR 1127.. .. . .. .. .. .. .. .. .. .. .. • .. .... S 80
Hamilton v l'apakura District Council (2002) 3 NZLR 308. . . . . . . . . . . . . . . . . . . . . . . • • • 22.S4
Hands v Slaney (1800) 8 TR 578. .. .
• .. .. .. .. .. . .. .
. . . . 917
ll•nn• v OAMPS Insurance
Ltd (2010) NSWCA 267 . .. .. .. .. • .. . .. . . ••• IS 66
Harhngdon and Leiru.ter Ent<rpn«> Lid v Chmtophtr Hull Hn< Art Ltd (199111 QB 56-1
. ... .. ................ .. ... .. .. .. ... ... ....... ... .
2245
llnron bin Mundir v Singapore Amateur Athletic A'-'O<l•llOn (1991 I 2 SLR(R) 494.. • 18 28
Hnmngton v Kent [19801 IRLR 35J ................... . ....................... 17 27
Hl\rtley v Ponsonby (I 857) 7 El & 81 872 . .. .. .. .. . .. .. .. . .. .. .. .. .. .. .. .. .. .. . . . . 8.3-1
l l11rtog v Cohn & Shields (19391 3 All FR S66 ...................................... 12.32
llnrvela Investments l.td I ' !l oyal Tru>t Co or C.1nada ( 19861 I AC 207 .. . ......•...•.. 7.32
l h1ynes v Horwood I 19351 I KB 146 ........ . .. .. .. ....... .. ... .. ......... ........ . 6.85
lle,1ly v llowlell & Sons (1917) I KR 337 ........ . ... . ... .. ....... ..... .. .. ........ 22.66
llcdley l!yrne & Co Ltd" Heller & l>•rtr><rs l.td ( 1964) AC 465
........... ... ...... ... ........................... . 6 28. 6.32. 6.33, 6 35, 13.2, 13.3, I).)•I
llclby v M"tthews ( 1895) AC 471 .. .... ... . .. . .... .... . . .. .... . .... .... ... ... 22. 11
IMl<r F.ctoring (Singapore) Ltd v Ng Tong Y•ng I 19931 I SLR(R) 495 .......••..••. 15 40
xix
xx
G
Table or Cases
Table or c....
Hel)'· Hutchin>on v Rroyhead Ltd 1196811 QB 549 .....•. , ....•••••••.•••..• 20.12, 20.40
llcndcrson v Merrett Syndicotcs Ltd jl9'JS) 2 AC 14S .............. ,...... .. . .6.96, 13.4
He1bett Morri> Ltd v Saxelb)' jl916] AC 688 ............ .. ....... ,, ......... IS.41 , 15.43
Heskell v Co11tl11e11tol Expres_< IAd I 1950) I All cR 1033 ... .. .................... , , . , l 8.38
I lcwlcll· Pack11rd Singapore (Sole>) l'le 1,td v Chin Shu llwa Corrina [20161 2 $1.R 1()83 .....
... .. ................ .. . ... .. ...... ........... . ... .. .. ...... ............... . ... 10. 15
He)'don's ea« (IS84) 3 Co Rep 73 .. .. • .. .. , , . . . . . . • .. . .. . • .. .. • .. .. .. . . .. 3.51
11111 C••uolty ond GeneraJ Insur.nee v Ch•>C Manhattan Bank 120031 UKllL 6 .
• 11 .33
Hii Chh Kok v Om Ptng Jin London Luucn 12017] 2 SLR 492. .... . . . . . ....... 6.60
Hilton v 1\Kker (1888) 39 Ch D 669 . .. ..
.
. , . . . . ..
22-26
Ho Seng Lee Construcuon P1e Ltd v N1>n Chuan Construction P1e Ltd 120011 4 SLR 407
......... ". .. "............... . .. ". ".................. . • . .. 12.22, 12.29
Ho Soo Fong v Standard Chartered Bonk 120071 2 SLR 181.. .... .. . .. .. .. . • .. 6.n
lloenigvl<0•<> l 1952)2AllERl76 ..... , ....................... 16.22. lloxl6.I
Holcim (Sl11g.11'o rc) Pie Ltd v Prcci>< Development 1>1e Ltd 12011] 2 SIR 106.. . • 17.24, 17.36
Holl1111d Lcedon f>tc Ltd (in
v C & 11 1hnsport
Ltd 120131 SCI IC 28 1
....... '".''' . '' ." ........ ' ....... ' .. '' ...... . ... ' .... ' ... . .. '.' ...... ' •.. 11.22
Hollier,, Rambler Moton (AMC) Lid I 19721 2 QR 7 1 , , .• , . .. , ......•.. •. ... 11.24, 11.30
Holman v John>on (1775) I Cowp 341 • .. • .. . . . . . . . . . . . . . . . .. . .. .. • .. .. ... 15.2
Hong Leong Fin.in« Ltd,, Ton Gin Huoy (199911 SLR(R) 755.,
• , • , • , 18 SI, 18.52
Hong l.<0ng Fmon« IJd v
Kww Neo 119911 2 SUt(R) 841. ... . . •
......... 8.46
Hongkong &
Booking Corp Ltd v Jurong t.ng1nttnng lid (2000( I SLR(R) 204
Industries ond Gtn<r•I Mong>ge Co Ltd v Lcwu [1949) 2 All ER 573. .. • . . . .. 20.47
Ingram v Little 1196111 QR 3 1 ................ , 12.43, ll.H , 12.45, 12.47, F1gutt 12.3
Initial Service• Ltd v Putterill I 1968] I QB 396 ... . ...... , ........................ 23.76
lntcrfoto l'icturc Libr.ry v Stiletto Visual Progrnmnm Ltd 119891 Qll 433 ....... 11.21, 11.22
Ira""'" D"rson<> v Ong Soon Kini (2002) 2 SLR(R) 26 1..............•...•.......••. 18.35
Irvine & Co v Wmon & Son< ( I880) S QBD 414. . . .. .. • .. . .. .. . . . . . . . . . . . . . . . . . 20.33
T•r
. .. ..
.. .. .. .. . .. ..
. . .. . .. . .. ..
:no. s.n
llongkong Hr Shlpp111g Co Lid v Kow.,.kl K1w1 Kal<ha l;d I 19621 2 QB 26
....... , ...... , , ........ . . .. .......... , , . , ....... . .......... 10 60, Table 10.1. 22.1 8
l loughton v Tr.falg.r Insurance Co ( 19541 I QR 247 .. • .. .. .. .. . . . . . . • . • . .... 11 27
Hou>ehold rirc 1111d Carriage Aecldcnl ln11im 1cc Co v G ront {1879) 4 E• I) 2 16 ........ 7.63
Howard Murlne & Dredging v Ogden & Son• (F..xcov.llions) 119781QB574 ....... .. .. 13.38
Howml v Pickford Tool Co Ltd
I I Kii •117 ............ .. .............. , .. 1652
l luckerbyvf.lliot 1197011 AllF.Rl89. ,, ..................................... 4.27
Hugh<J v Liverpool Viclort> L.gaJ l:rttndly S0<1tly I 19 16) 1 KB 482•..•. , •• , , •• , .. 15.19
Hughe; v Lord Advocalt (19631 AC 837 ,
.. . .. ..
• .. .. ... .. . • 6.75
Hugh<$ v M<1ropoht"'1 Radway Comp.1ny (1877) 2 Al'f' C.. 439 ... . • .••. 8.SO. 8.56. 8.6S
Hulton v Jon•• II 910) AC 20 . . . . .. . .. • • .. .. . . . .. . . . . . • ..
• . . . 5.58
Hutton v \\'amn (1836) I M & W 166 , . • .. . .. . .. . .. • .. • .. .. .. . .. .
1054
lluyton SA'' Peter Cremer Gmbli & Co jl999I I I.lord\ R<p 620 , . .• . .... . • 14. 19. H .23
liyd< v Wrench (I R40) 3 Bm• 334 ..• " ". ' .. ' ' •..... . ........ ' ". " .. " .• " ' •. '. 7.4 I
Hymon v llymon 119291 AC601. ., ........ , ...................................... 15.12
llyund11I I l<11vy lndustncs Co v P'1pn1lo1>0ulo> I 19AOI 2 All ER 29 ................ . ... 22. 13
ICI vComrnk>J<>n 119721ECR619, 11972) CM IR 557 .. .. .......... .............. 25.8
ICI v 5ha1wdl I 19651 AC 656 . . . . .. .. .. .. . . .
.. .. .. ... .. .. • .. . . 6.85
lkumcn< Smg•por< Pt• lid v Leong Che< Leng 1199313SLR24
6JI
lmbr« ,, McN<1lly 12008) HCA 40 . .
.
.
• • •. . •. . ••
•
•
• 6.48
IMC Avlauc>n
Pty Lid,. Alt•111 Khuddtr 11.C (2011) 282 ALk 717 (2011 )
248
. . . . . . "' ....... "' ............. "
.. ........ ...
. .. 26103
Impact l'undlng Solution< Lid '' AIG Furore ln•uroncc Ud 12016) UKSC 67 .. .. ... 11.28
lnche
v Sh••k Alli• bin Om Ill' I 19291 AC 127.. . .. . . . . . . .. . . . . .. .. • .. ....... 14.41
••I
J T Stn1f0<d & Son> lid v 1.indley (19651AC269 ..........................5.12. 5. 13
• .. . . . . .. . ..
.. 9.70
Jackson v Horizon Hohd•)"> (197513 All ER 92
Jom<C! (Mohammed) v \\'all Street Joum•I Europe Sprl 12007 I I AC 359 •
• Ui
Jarvis v $WOJ1' four> Ltd (1973) QB 233... .. . . . . . .. .. . • .. . .. . . . . . . . . .
. IS.),()
Jct Holdmg Ltd,. Coop<r Cam<ron (Srngapore) Pt< Lid 1200514SLR417...
11.18
fet llolding Ltd and 01hers v Cooper Comeron {Slng•rorc) Ptc Ltd (2006) 3 SLR 769 . . 6.89
fla ng Ou v EPG Bank AG (20 1IJ 4 SLR 246 , , ....... . .... . ...... . , ................ 11.57
JIO Mineral• l·ZC v Mineral £nierprlses Ltd (20 11I I SLR 391. ..... .. ........... 26.J, 26 26
lobling v A-.oci.1ted Dolrie< ( 1982) AC 79'1 , , . , .. .. .... , .. .. • .. .. .. .. ..
, , ... 6.72
John Shaw & Sein< (Salfor.I) Ltd v Sh.-v I 19351 2 KB 1 IJ ................... . ...... 2 1.36
327 , .. , . . . . . . • . . . . . • • . . • • . . • 23.55
Johns Manville Corrora11<>n'• !'>tent I 19671
JohMOnvAgnewl198-0IAC367. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1827.2289
J-Ollc)' v Sutton London Borough Coundl 120001 I Wl.R 1082 ......................... 6.15
Jones Bro• ( Hun>i.nton) I.Id v Stewns [19551 I QB 275. . . . .. . . . . .. . . . . .... ..
• 5 15
.. .. ... .... ........... ..
• $72
Joncs v Pad•"•tton 1196911 WLR 328 . •
Joscdync v Xl<M:n I 19701 2 Qll R6, (19701 2 WI R 509.. . .. • . . .. . . . . . . •. .. . • ... .. 12.56
foseph Constant111< v lmperlol Smelting [1942) AC 154............ ,...........
17.28
Joseph Mathew v Singh ChiranJ<eV [20 101 1 SLR JJS .... , . . . . . . . . . • . . . . , .. , , . 24.4,1
fSI Shipping (S) Vtc 1.td v
120071 4 Sl.R (R) 460 .. ,, ........ 6.49, 6.59
JTC v Wishing Stnr (No 2) (20051 3 SLR 283. .. .. ...... , ........ , . , 13.24, Box 13.1 , IJ.46
Jump Rope (Slngopore) 120161 SGPDPC 2 1 ........ , .. , • .. .. . .. • .. . • . . .. , 24 S7
Ju>tlogin Pie Ltd v 0\'el'>ta·Chinesc Banking Corp 1.td (2007) I SLR(RJ 425 . . . . . . 18 23
K
K>ncheniung., The (199011 U<>yd's Rep 391 ..
.
.. •. .. .... . . . .
• 22.116
Koy lam Cot\>tructlon & lhding P1e Ltd v Soon Dougl» (1'1c) Ltd [?OIJI I SLR I . . 11 .55
Kca Holdmgs Ptc Ltd v Gan Boon Hock 12000) ) SIR 129 •
.•. . .• .• .•
21.54
Kearlcyv'lhom<on(l890)24QBD742.......... ,, ............... ..•
1525
Keighl<y, Moxs1ed & Co v Du1•nt (1901 f AC 240 ................. . ........... 20.20. 20.35
Kell)''' Partington (1833) 4 R & Ad 700,,, , ...... , .... , ................. , ..... 580
Kcnd:ill v i la1nllton ( 1879) 4 App Cas 504 . , , . .. .. • .. .. .. . • .. . . . . . .. . . . • . ........ 20.37
Kennedy v IOe 'l'raJror,I I 18971 AC 180........................... . ................ 20.2
23 11
Kenrick v Lowrcnc< ( 1890) 25 QBD 99 .. , , .. , .. , .. .. . . .. .. . .. • .. . . . .. .
Kcnwell & Co Pie I Id v Southern Ocean Sh1pbu1ldln3 Co Pie
( 19991 I SI R 214 . I I .SS
Khoo Bee Kcong v Ang Chun Hong (2005( SGHC 128.. . . . . . . . . .. . . . . .. ..
. 6 89
Khoo fame;, Dr" Gunapathy d/o
(200212 SLR 414 ... ..... ... ..
6.59
King's Norton Mei.I Co (IJd)" F.dridge, Mmett, 11>d Co (IJd) (1897] 14 TI.R 98 ..
12 .51
Kimi Cotton Co lid v R•nchhodd•s KW.•YJ• Dcwa.n1 (1960) AC 192 ..... ..... 15.20. 1512
Kleinworl Re"'on ltd v M•l•y<,. Mining Co1p llhd
I WLR 379. .......
. R.78
Klcmworl ll<n'on v Clo,gow Ctty Council (No 2) I 19971 4 All FR 641 , . .. .. . •
, 13.1 1
x•ll
Tabl• of Cam
Klerk·Elias ,. KT Chan Clinic Pte 1.td (1993) I SLR(R) 609 ................... 16.56, 18.47
KLW Holdings Ltd v Straitswol'ld Advisory I.Id 120171 5 SLR 184................
. 8.25
Koenigsblau v Sweet I1923 12Ch3 14.......
. .. .. .. .. . .. ... . ..
.. . 20. 18
Koh Lin Yee v 'lcrmtrial J>te Ud (20 l 5I 2 SLR 497 ...... . .............. .. .... II . SO, 11.56
Kong 'Jhai Sawmill (Mil'i) Sdn Bhd, Re ( 1978) 2 ML) 227 ..... . ......... , ..
. ... 21.66
Kr<ll v Henry (1903) 2 KB 740....................................... .. ..
. ... 17.22
Kwei Tek Chao v Briti<h Traders & Shippers Ltd 11954) 2 QB 459 ................... 22. 122
L
I. Sdtuler AG v Wickman Machine Tool Sales Ud I 1974] AC 235 .......... .... 10.64, 10.65
1:Es1range v F Graucob L.td (1934 I 2 KB 394 ................................... II. 7, I2.53
l.aclbroke v William Hill I1964] I WLR 273 ........... .. ........................... 23.24
I.am Chi Kin Povid ,, Pcu!Sche Ran k AG 12010] 2 Sl,R 896 HC .. .. .. .. .. .. .. ... .$.54, R.55
Tabl• of Cam
l.im Feng Chieh (for111c1·ly tradmg as lnlrn·Smit Agencies) v GS Auto Supply Pte Ltd
11993] 2 Sl.R 489 ............ . ..................... . ... .. .. ... .... ........... 21.6
Lim Geok Hi;m v Lim Guan Chin 119931 3 SLR(R) 183 ...... .. ............. .. 14.27, 14.57
l.im K1111 Som v Shcritfa Taibah bte Abdul Rahm<m I1994) I SLR 393 . .. .. •. .. •....•. 17.25
Lim Sze F.ng v I.in Choo Mee 120191 I SLR 414 ... .. ...... ........... .. ............ 10. 15
l.im Weng Kee" PP 120021 2 Sl.R(R) 848 .......... . ....... ... ......... ........ 4.58, 21.S l
Linden Gardens Trust v Lene<tn Sludge Disposols 119941 1 AC 85 ....... . ............ . 9.il
Lion Labor:i.torics Ltd v Evans 11984] 2 All ER 417 .. .. .. ... ....... . .. .. ............ 23.76
l.iverpool Cjty Council v Irwin I19771 AC 239 ... ................... ..... .. , ....... 10.50
LI Korbctis v Transgrain Shipping BV [2005) EWHC 1345 (QB) . .• ... •. .. •• .. •. .. ... . 7.63
Locken v Charles Ltd I19381 4 All ER 170 ......... . ........................ ... .... 22.13
London & Nfnshonatand ExpJorntio1ls Co Ltd v New Mashon3Jand Exploration Co Lid
11891] WN 165 ............ ........................ . . ...... . .. . . ............ 21.54
London Artists Ltd" Linler Grade Organisation Ltd 11969) 2 QB 375 ................. 5.73
tonrho v Faycd (No S) I 19931 I WLR l,189 ........... .. ............... ..... ........ 5.31
l.onrho v Fayed 119901 2QB479 . ....... ... .. . .. .. .. ....... .. .. .. ................. S.36
tonrho v Faycd 119921 I AC 448 .. ... . ... .............. .. . ............. ...... ..... 5.33
l.otus (France v Turkey) (1927) PCIJ Rep (Ser A) No. 10 .. .. ... . ... . . .. . ... .. .. . . .. . . 26.7
Love & Co Pte Ud v The Carol Club Pie 1,td [20091 I SLR(R) 561 . ... •... •. . ••. .. ••. 23.85
Low Peng Boon v Low Janie 119991 I SLR 76 1 ... . ... . ....... . ..................... 21.66
Lowe v Lon1bonk 119601 I WLR 196 ... . ... . ......... .... . ........... ............ 13.60
Lubbe v Cape Pk 12000) 4 All ER 268............................................. 26.2 1
Ll1<ky Realty Co Ptc Ltd v I ISBC Trustee (Singoporc) Ltd 12016) l SLR 1069 . .. •• .. •. . 10. IS
. .... .... .... ..... .. .
. ...............S.S
l.umlcy v Gye (18531 E&B 216.
Lam Chi Kin David v J)eutsche Ronk AG 1201 I) I SLR 800 CA ........8.54, S.59, S.60. 8.61
l..imbcrl v Lewis (1982) AC 225 .................................................. 18.39
l..m1gcl v Retz 250 NY 159 (1928) . ................ . .. .. .. .. ....................... 19.75
Larcsc v Creamlond Dairies, 767 F2d 716 ( IOth Cir 1985) ............. .... .......... 19.73
Latham v Credit Suissr First Boston 1200012SLR693 .. •... •. .. ••. .. .. .. •. .. •. .. ... 10. 14
Latham v Credit Suisse First Boston 12000 J 2 SLR(R) 30 . ... . •. . ••• ... •• . •.. .. .. ... .. l0. 14
Latimer v AEC Ltd I19531 AC 643 . ........... .. ..... ............ ... .......... , ... . 6.51
Laurence v Lcxcourt Holdings Ltd 119781IWLR 1128 .. ..... .... .. .. ..... ....... ... 12.24
Law Society of Singapore v Tan Gu at Neo Phyllis 120081 2 SLR(R) 239.. . .
. ... . 3. IS
Lawrence v Fox 20 NY 268 (1859) . . . . . . . . . .
19.57, 19.59, 19.60
LB (Plastic.<) Ltd v Swish Products I.Ad l1979l l'SR 145 . .. . ........ . .. .. .
. ... 23.23
Le l.ievre v Could 11893) I Q B 49l . .... .... .. .. ..... .... .... .... .... .
. ... 13.30
Lear v lnternation'1 1Galleries I19501 2 KR 86...........................
. ... 13.47
I.ED 1.inear (A,ia) Pte 1.td v Kri,Utc Ptc l.td 12017) SGHC ISO...... . .•..••.... I0.68, 22.56
Lcc Chee Wei v Tan Hor Peow Viclor [20071 3 Sl.R(R) 537. .. .. .. .. .. .. .. • .. .. .. . . .. I 0. 12
Lee Christina" Lee Eunice (1993) 2 SLR(R) 6·1 4...... . ... . ..................... . ... 16. 13
Lee !Gen Meng v Cintom:rni Fronk 1201 5) 3 Sl.R 1072 . .•...•..••.. . .•...•. .. .. ... . . 24.3 1
Lee Kuan Yew v Chee Soon )uan 12003] 3 SLR(R) 8 ............................S.64, 14.20
l••c Konn Yew v Davies I t989J SLR 1063 .... . .. ... ............... .. ....... BI. 5.69. 5.72
Lee Seng Heng v Gullrdi<m Assurance Co l.ld 11932 1 MLI17 ....... .. ........... . .... 7.64
Lee Siong Kee v Beng Tiong Trlldmg, Import and Export (1988) l're Ltd 12000) 3 SLR(R) 386
...... .. ........................ ........ .. .. ....................... ... .... 16.24, 16.52
l.eegin Creative Leather Products, Inc" PSKS, Inc (2007) 551 US 877 .•. .. •• .. •. .. llox 25.2
Lofkowirz v Great Minnupolis Surplus Store (1957) 86 NW2d 689, USA . .. •. . .•. .. ... . 7.24
Ldman, Ricardo v Noble Resources Ltd (20 181 SGHC 166. .. .. .......... . .. . .. . .. . .. . 9.77
I.ck Gwee Noi v Humming !'lowers & Gifis Pte Ud 12014 I 3 SLR 27 . .... . .. . ... . , . . . IS.67
l.emon Grass Pie Ltd v Peronakan Place Complex Pte Ltd 12002) 2 SLR(R) SO . ... .. ... 10. 14
l.ew Ch"<' Fai Kevin v Monmry Authority or Singapor< 120121 .......... . .. . ... . ..... 4.54
Lewis v Averay I19721 I QB 198 ....................................... 12.44, Figure 12.3
l.i Siu Lun v Looi Kok Pok 12015 1 ' I Sl.R 667 ...................... ........... ..... 5.31
liM Kok Mong v Ow Wnh Foong l2008) 4 SLl\(I\) I 65 ... .. ........... ... ...... . ... . 6.99
l,ict1w Anst.olt v Mll\ Sttd UK 120121 All ER (Comm) 54 . .. •. .. ... . ..... •. ..• . .••.. 11.H
Lifestyle 1.99 Pte Ltd v SSl.99 Pte
(l/a ONE.99 SHOP) 1200012SLR766 .... ..... 23. 113
Lim Rc11g Chcns v Lim Ngcc Sing (2016) 1 SLR524 ... . .. .. ... ....... .. .. .. .. ....... . 8.26
Lim Eng Hock Peter v Lin Jlan Wei 120101 4 SLR 331 .. .. ........ .. . ....... . ......... 5.79
M
Magee v Pennine Insurance Co Ltd I19691 2 QR 507.. .
. ... 12.24
Magcllt111 lntcrnotionol Corporation v Salzgitter llandcl Gmb!I, 76 FSupp2d 919 (NDlll 1999)
IVlll ZR 304/001 Federal Supreme Court of Germany, 9 Jan 2002 ............ .. .. 19.49
Mahidon Ni<hiar b1e Mohd All v Dowood Sultan Kllmaldin 12015] S SLR 62 . .. •... •. 12.55
Mahmoud and lspahnni, Re (1921) 2 KB 716... . ...... .............................. 15.6
Malik v Bank or Cr<dit and Commerce International SA ( 1998) AC 20 •. 10.49, JO.SO. 18.28
Man Finnncinl (S) Pte Ltd (formerly known as: E D & F Mni1 Intcrna1ional (S) Pte l..1d} v
Wong !h1rk Chuan David 12008] I SLR(R) 663
....... .. ... ..... .... 10.63. 10.65. I0.66, 15.33. 15.37. 15.4 1, 15.42. 15.47, 15.55. 15.60. 16. 12
Manches v Trimborn (19<16) l 15 LJKR 305 ... .. ..... .. .... . ....... ... ............... 9.44
Mano Vikront Singh v Cargill TSf. A<i• Pte 1.td [20121 SGCA 42: 120121 I SLR 311 .... IS.S I
Mansource Interior J>te l.td v CSG Croup Pte
120171 5 SLR 203 . .. .. .. .. .. .. .. .. .. 8.64
Maple Flock Co Ltd v Universul Fumilurc l'roductS (Wembk)') Lid 11934) l KB 148
... . ... .. ... . ... ... . .. ....... . . ......... .. . ... . ... . ... ' ....... . . .......... 16.19, 16.47
Mar< Rich & Co AG,. Ri>hop Rock Marine Co Ud I19961 AC 21 I•..• •. .. •• .. •• ..• •• . 6.36
Mnredelanto Compania Navi<ra SA v Bergbau· Handel Gmbl-1, 1 he Mlhalis Angelos
[1971) I Q ll 164, ............................ .. .... , ........................ 10.65
Marina Cell'lr< Moldings Pte Ltd v Pars Carpet Gallery Pit Ltd I19971 2 SLR(R) 897 ... 11.34
Mantlmc Notional Fish v Ocean Trnwlcrs 119351AC524 ... . ....... . .. . .... . .. .. .. 17.30
Marlow v Pitfield (1719) I p Wm.I 55R .. .. .. . ... . .. .. .. ... ......................... 9.24
Marslrnll v NM Financial M;mogcment IAd 11995) I WLR 1<16 1 ..... . ............ . ... 15.63
Mason v Pr<>vhlent Clothing and Suppl)' Co l.td 119131AC724.
. .......... 15.42, 15.43
Maynard v West Midlands Regional l k alth Authority I19841 l WLR 634 .. .. .. .. .. ... . 6.53
xxlll
xxiv
Tabl< of Cam
Tabl< of Cam
Cer:unic Center, Inc ..,
Nuova D'Agostino.. SPA, 144 F3d 1384
( I Ith Cir 1998) . .
19.38
McDougall v Aeromarine of Emsworth, Ltd (1958) 3 All ER 431
22.28
Mcloughlin v O'Brian (1983] I AC 410
.6.44, 6.45
Neuleship v Weston (1971( 2 QB 69 1. .. . . .. .
. 6.48
New Zealand Shipping Co Ltd v AM S;1ttherwaile & Co Ltd (The Eurymedon) ( 1975( AC 154
.. .. Box 7.3, 9.80, 19.54
Ng Buay He>ck v Tan Keng Huat ( 1997( 2 SLR 788 . . . .
. .. . 13.38
Ng Giap H<>n v Westcomb Securities Pte Ltd (2009) 3 SLR(R) 518.. .
. . . 10.36, 10.48
Ng Koo Kay Benedict v Zim Integrated Shipping Services Ltd (20!01 2 SLR 860 .. . ... .. 5.53
Ng Lay Chc>o Marion v Lok Lai Oi (1995) 3 SLR(R) 77 .............. .. . ............ 10. 14
Ngiom Kong Seng v Lim Chiew 1-lo<k (20081 3 SLR (R) 674 ........... . .. .. ....... .. . 6.44
Niblcn v ConfcC1 ioners' MoterilllS Co Ud (192 I) 3 Kil 387 .. .. ... . ... •. .. .. .. .. ... . . 22.35
Nippon P•irtt (Singapore) Co Ptc Ltd v IC! Paint (Singapore) Ple Ltd (20001 3 SLR(R) 465
............................................................................... 23. 11 3
NLS Pty v Hughes (1966) 120 CLR 583 . .. .. .. .. ....... .. .. .. .. ... .. .. . ... . ... .. ... 19.86
Nordcnfclt v Maxim Nordenfelt Guns llnd Ammunition Co (l894] AC 535
. ... . ... . ... .. .. .. ... . ... .. .. .. ... . ... . ... .. .. .. •.. . ... . ... . ... .. •.. 15.35. 15.36, 15.37
North Ocean Shipping Co Ltd v Hyundai Construction Co Lid (The 'Atlantic Baron')
(1979 1 QB705...
. ... 14.4, 14.24
Norwest Ho ldings Pte Ltd (in liquidation) v Newport Mining Ltd (20 10] 3 SLR 956
. .. . 7.6, 8.69, 12.22
Norwest Ho ldings Pte Ltd (in liquidalion) v Newport Mining Ltd (20 11 ] 4 SLR 617 .
. 7.78
Nottebohm (Liechtenstein v Guatemala) (1955) ICJ Rep 4
. .. . 26. 17
Novelty Pte Ltd v Anrnnresorts Ltd (20091 3 SLR(R) 216
. .. . . .. . . . .. .
. .. . .. .. .... . ... . ... . .. .. ... 23.89. 23.94, 23. 114. 23.115. 23. 11 9
NTUC F<>0dfa1-e Co-operative I.Id ,. SIA 1;nsineering Co ttd (2018) 2 StR 588 ...... . .. 6.4 1
McRne v Comrnonwenhh Disposals Cornmission ( 195 1) 84 CLll 377
... 12.12. 12. 17, 18.9. 18. 11, 18.12
M<rc•ntile Union t'unrantee Corp l.td v Ball 1!937] 2 KB 498..
. ............. 9.28
Merck v Pharmaforte (20001 3 SI.R 717 ............................................ 23.5 1
Meridian
Funds 1\.1:m'1gcmcn t Asia l,td v Securities Com1nission 11995) 2 AC SOO
................ . ......................................................... 21.21, 21.29
Merrill v Mcrritl ( 1970) I WLR 12 11 ...........................................8.73, 8.74
Mctropoli1an International Schools Ltd v Dcsigntcchnica Corpn 12011 ) 1 WLR 1743 ... . 5.66
MFM Restaurants Pte Ltd v Fish & Co Restaurants Pte Ltd (20 11 ) I SLR 150
. .. .. ... . ... .. .. .. .. .. ... . ... .. ... . ... . ... . ... .. ... . ... . ... . ... .. ... . .. 18.40, Box 18.2
Midgulf International Ltd v Group Chimique Tunisien (20 101 EWCA Civ 66 . .. .. .. .... 7.54
Midlink Development Pte Ltd v 'fhe Stansfield Group Pte Ltd (20041 4 SLR(R) 258
.7.50, 7.70
19.33
Mid·South Packers. Inc v
Inc, 76 1 F2d 1121 (5th Cir 1985) .
Mineral Enterprises Ltd v JIO Minerals FZC 12010] SGHC 109
26.26
24.45
Mitfam hHerDational Ltd v 1v1odey Resources Pie Ltd 12014 ) I SLR 1253 .
Mitsubishi Corp RTM 1iue1·nn1ional J>te lid v Kyen Resources Pie Lid 12019) SGHCR6
. .. . . .. . . .. . .
22. 11
MK Distripark Pie Lid v Pedder Warehousing & Logisti<s (S) Pte ttd (2013) 3 SLR 4 33
. .. .. .. ....... . ... .. .. .. ... . ... .. .. .. ... . ... . ... .. .. .. ........... .. .. .. ......... 18.23
Mogul Steamship Co Ltd v McGregor Gow & Co (1892) 1\C 25 ......................... 5.3
Montgomery v Lanork.<hire Health lloard (2015) 2 WLR 768 ......•...•..••...•....•.. 6.60
Moorcock. 111c ( 1889) t4 PD 64 .................................................. 10.42
Morris v CW Martin & Sons Ltd ( 1966) t QJl 716 ... . .. ... . ....... ... . .. ....... . ... . 9.87
Motor Insurers' Bureau of Singapor·e v AM General Insurance Bhd (2018) 4 SLR 882 .. . 9.77
Mo1ours Lid v Euroball (West Kent) Lid (2003 1 f.WJ·lC 614 ......................... 11.59
Mountford v Scott ( 1975) I All ER 198.. .... . .. .. ... .
. .. .. ....... .. ............ 7.38
Mf'-Bih Pte Ltd v Oey Wid;irto (1999 ( I SLR(R) 908...
. ••.. ..... 16.58, 18.48, 18.54
MSM Consulting Ltd v Tlllizania 12009( EWHC 121 (QB).
. 7.55
Muirhead v Industrial Tank Specialities Ltd ( 1986) QB 507
. 6.71
Multiplex Con.<truction.< l'ty v Abgarus (1992) 33 NSWLR 504. .
19.86
Muh i,<ervice Bookbinding !Jd v Morden 119791Ch84
14 .54
Murphy v Brentwood District Council ( 199 1) I AC 398 .
. .. . .•. . . . .. .
. 6.12
. ••. ... .. . •.. ...... l!ox 14. 1
Musumeci v Winadell Pty Ltd (1994) 34 NSWl,R 723..
N
Nllsh v lnn1"ll (1908) 2 KR I .. .. .. .. .. .. .. ... . ... .. . ... .. ... .. . ... .. ..9.19. llox 9. 1, 9.35
Natfcrrous Pte Ltd v Trndclink l h1rdwore J>tc Ltd (2005) SGllC 131 .................. 22.47
National Acrotcd Water Co Ptc Ltd v Monarch Co Inc (2000) 2 SLR 24 •. .. •. .. •. .. ... IS.33
National Employers' Mutual GcncrJ.1 Insurance Association Ltd v Jones l 1988} I AC 24
............ .. ........... . ... . ............ . ... . ............ . ... . ............ . ... 22.79
Nelson v Dahl ( 1879) 12 Ch D 568 .. ............... .. ............... . ............ 10.54
Ncma, The (1982( AC 724.. ... .. .. .. .. .. .. .. ... .. .. . ... .. .. .. ... .. .. . ... .. ....... 17.23
xxv
0
OllG Ltd
Alhm (2008) I AC I
.. 5.7, 5.11. 5.13, 5.25, l'igures 5. 1 & 5.2. 5.35. 5.36, 5.37, 5.39
Otcidental Worldwide Investment Corp v Sktbs A/S Avainti, Skibs A/S Glarona, Skibs A/S Navahs
('Ilic "Sibocn' t1nd the 'Sibotrc') ( 1976) I Lloyd's Rep 293 .. ... . ... ...... . .... . 14.3, 14.6
Ochroid Tmdi11g l.td v Chua Siok Lui (1tadi11g as VIE lmpot1 & E•porl) (20181 I SLR 363
. .. ....... .. .. .. .. .. ... .. .. .. .. .. .. .. ....... .. .. . 15.13, 15. 14, 15.26, 15.27, 15.28
Olivayllc Pty Ltd v Fllonwcg AG (No 4) (20 10) FCAFC 62 .. •. .. .• ... •. .. •. .. .. .. .•.. 7.60
Olivine Capital Pie !Jd v Chia Chin Yon (20 14] 2 SLR 1371 . . . .
12.28
Olley v Marlborough Court Ltd (1949( l KB 532 ................................... 11.14
Ooi Ching Ling v Just Gem Inc (20031 l SLR(R) 14 ...... .. .. ....... .. . ... . ........ 18.56
Ooi linn Sun v Bee Hun Meng 11991( Sl.R 824.. .
. .. .. 6.62, 6.8 1
Orchard Cen tral Pte Ltd v Cupid Jewels Pte Ltd (Forever
f>te Ltd, non-party
(2013) 2 SLR 667 ............ . ................ . ................ . ............. 8.54
Orient Centre Investments Lid v Socieie Generole (2007] 3 Sl.R(R) 566...... .
. .. . 13.24
Omir
Ltd v Williams ( 1957( I WLR 370 ... . ... .. .. .. ... . ... .. .. .. ... . . 10.32, 13.40
Out of the Box Pte Ltd v Wt111in Industries Pte Lid 12013) 2 SLR 363
... . .. .. . . 18.40. 18.43, Rox IR.2. l!ox 18.3
Overbrooke Estate v Glencombe Properties (19741 1 WLR 1335 ...................... 13.57
Ovcrseo·Chinese llonking Corp Ltd v Chng S0<k Lee (200 1) 4 SLR 370.... 14.43, Figure 14.2
v
Ovcrseo-C:hinesc Honking Corp I.id v ·nrn ll:ck Khong (20051 2 Sl.R 694 . . .. . . .. . ... . 14.29
Overseas Tankship (UK) !Ad v Morts Dock & Engineering Co Ltd (Wagon Mound) (No 1)
(1961 ) AC 388. (No 2) 11967) ........................................ 6.52. 6.73, 6.74
Oversea.< Union Enlcrprise 1.td v 11lrte Sixty Degree J>tc l.td (2013) 3 Sl.R I . .
. .. . 18.53
xxvi
Tablc of Casts
Table of CoS<S
OYtrseas Union huu,.net Lid v Tuttgum lnronn« Co l20Cll I .l SLR 3.lO . • .. • • . • • • . 7.36
Proform Spo<u Management Ltd v Proocu•·c
Managm><nt Lid
120071 1 All ER (Comm) 356 .. ..
.. .. .. .. .. .. . .. .. .. ••• 9.27
PST Energy 7 Shipping UC v 0\\1 Bunkcr Maha ud (Thc Res Cogitans)
(20161 2 WLR 1193.. .. .. . .. .. .. .. .. .......................... 22.11, 22.95
PT Asunn.i Jasa Indonesia v Dcxoa Bank SA 120011 1 SLR 597 ...................•. , 26.99
PT Ma>ter Mandiri v Yama7-"ki Comtructlon (S) Pt< Ltd 120001 3 SLR(R) 797 ...... •. 18 45
PT Sandipala Arthaputra v STMiu odc<tronic• Asl• Pacific Pte Ltd 11018] I SLR 818 .. 2263
l'r Soonlee Mctalindo Perk•» v
Slupping Pt< 1.td 1200714 SLR(R) SI .....•.. 11 29
PT Surya Citr-• Multimedia v
Singapore Pte
12019) 3 StR 461 ......... 22.27
p
P:.<ific M>rin< Sh1pbu1lding Pie
,, Xin Ming liua Pi< I td 120141
102 ....... 22.SO
P>natron v Le• Chcow l cc 120011 3 SLR 405... ........ . , ..... ,. .. .. • 13.23, 13.24
P:.ng Kol F• v 1 lrn Oioe Phlng 11993) 3 SLR 317....... .. . .. . .. .. .. . .. ....... 6.47
Panwdl Pie I td v 11\dian !lank (No 2) 120021 4 SLR 963. , . , . . .. .. .. .. .. .. ........ 7.44
Pao On v L.iu Yiu I.ons 11980) AC 614., ..............8.IS. llox 8.1, 14 .7, 14.9. 14.12, 14.24
l'arndinc v Jone ( 1617) Alcyn 26 ....................... ,, ........... ,, ........ , .... 17.3
Paris v Stepney Borough Coull<il I 195 1I AC 367 , .. ..... , , ........ , , .. , ........ , ... . 6.50
Parker v Soulh Ea.tern Rollway
2 CPD 416 ......... , .. , .... , .... , .. , .... , .. , 11.12
Parkw.ty Propcrli<> Pi< Ltd v Pnge One - The Rook Shop Ptc Ltd ( 19851 Sl.R(R) 204 . , 18.64
Parnutcr v Coupl•lld (1840) 6 M & W 105 .................. , ....... , , ....... 5.48
Patcl v Ali 119841 Ch 283 .................................... , , .. , .......... 18.63
Patridge v Crinrnd(n ( 1968) I WLR 1204.. ..... ....... .......
. ............... 7. 18
Pearce v Brook> (1866) LR I f:x 213........... .. . . .. . .. .. .. . . ............. 15.12
Poeui• lntcrmark Lid' ANZ Bwking Group Ltd 120061 EWCA Ctv 386 •.••.. 13.24. 13.60
!'oh Nam Ktt v Pd1 1_.m Kong (199611 SLR 75.......
.. ..... 14.39, 1457
Perch-.! v Wnght
2 Ch 421 .. .... . .. • .. .. .. . .. . .. ..
• ........ 2157
Perry F.ngmttring Pl'Y '' ll<mold AG 12001) SASC 15.. .. .. ... .. ......... 19.IS
Pcnimmon llom•s I 1mited v Ovc Arnp & P.rtners l.im1tcd (20171 hWCA 373....... 11 .28
Pctcr's American O<llcacy Co Lid v lleath (1939) 61 CLR 457 ,
.. . .. . 21.61, 21.65
Peters v l'lcnnng (18•10) 6 M & W 42 .,,.............. .. • ,. , .. , ,. ........ ,, 9.17
Pl l llydnmlic1 Engrnttrmg Ptc Ltd v Airtrust (Hong Kong) Ltd 120171 2 Sl.R 129
................ ,,,,,,.,, ................. ,, .... ,,,.,, .......... , ... 18.3, 18.58, 1860
Pharmaceutical So<ICI)' of Great Rrltarn v !loots Cash Chcn1"ts ( 1953) I Qll 401
.. '' ' .. ' ' .. ' ' ... ' ... ' ' ... ' ... ' .. '' ... ' " ...... ' ... ' .. '' ... ' .... ' ' .. ' ... ' .... 7.27, 24. 14
l>hillip• v Brooks, l.td ( 1919) 2 Kl! 243 . . , ...... , .. . , .•. , , • 12.42, 12.43. 12,44, Figt1ro 12.3
Phoenix: Gcne-ro1.I ln.,ur.Lncc Co or Creect SA v Administralla Aslgur"1llor de Slat
I19881 Qll 216 ................... .................... ....... , ........... IS.S. 15.8
Pickford< Ltd v Ctl«tlc•
120031 EWCA Civ 1741 ... ... .... .. .............. 7.39
Pilmorc v Hood (18J8) S Ring NC 97 ........ .... . ... ... . ..................... 13.17
Pinnd's Case ( 1602) 5 Co Rtp 117A. ......... . ......
.. .... 843, 8.-14. 8.45. 8.47
Plani\;;ure PAC v G.cllc Inn> Pte Ltd (20071 4 Sl.R(R) 513
• . . . • .••• 6.49. 659
Plu; Group I.Id v
(20021 fWCA Ch• 370.. . .. .. .
.. • .. .. 21.54
Polo/Lauren Co. IP Thc v Shop· In O.:partmmt Slore Pte ltd. 11>< (20061 2 SI R(R) 690
.... 23.93
Portuguc;c Comolld•tcd C<>r1><r Mm« Limned, Re
45 Ch 0 16 • . . • . •• , . 20.27
PP v Low Atk Meng (2007) 2 SLR 814 .. .. .. .. ..
.. .. .. ..
.. 4.7
PP v Loh Soon Aik Andrew 120131 SGHC 16 .......... .. • .. • .. .. ,, .......... 4.8
PI' v Low T1ong Choon I 19981 2 SLR(R) 119 ........... ,, ............ , ........ ..t8, 4.SO
PI' v Monk l'mg Wuen Nh1urlcc (1999)., ............ , ....................... , , ... , 4.10
PI' v 'l'•m Pook Sam ( 1999) I SLlt(R) 1022. ............ , , ........ , ........... , .. , 4. 11
l'V v Teo Al Nt•c 11995) 2 SLR 69 •. , ........ , . , ..... ,., ......... , ,., , ........ , ... 23.28
Vr<sltlcnt Marine (l'tc) 1.td v Kojhno Singapore (l>te) LLd I19941 SCI IC 68, •. , .... , •. ,, 16.6
Press Auton1.1llon
f>tt Led \•
Exhibilion P.orw\\1·Jlns l'tc Ltd
(20031 I Sl.R 112 ..................... .. . . . . . ,, , .. .. .. ,, .. .11.7, I I.SS
Printing •nd Numcric.tl Rcgl>tering, Co v Samp<on (1875) LR 19 t<1 462 .,, •. , ... , . . 14.l
xxvi1
Q
Qont•U & O rang.star Co·opcrnLion Agreement, CCS 1100/003f06 (10 January 2007),, .. , 25. 10
QR Net Co Ltd v E.irnson Management (S) l'tc Ltd 120071 I SLR(R) 1 . . . . . , .•. , • 23.73
Qingdao Boh;U Construction Group Co. ud v Goh Te<k Ben:g 12016] 4 SLR 977 .... 5 47. 5.61
R
R & R Cu,.oms Rrol:er> Co l.ld v lJnltcd Oonnnion• Tru.11 Ltd 1198311 WI R 321
• ............... ..
. • • ......... ...
1149,
R (Mlllcr) v Secretary of State for Ex1hng the European lJnion (2017) \..'KSC S
•••• 26 11
R 1,.,shcl,d v Shc111 (1914) 3 KR 607 .. .. . .
.. • .. .. • .. ..
• 9 36
R ' ' Anomey·General for England and Wale• 12003) UKPC 22 .•• , . • • •
14 13, 14 26
R v 801v Strcet Metropolitan Sttprnd1ory M•g1stme, <J partc Pinochet Ugart< (No 2)
(2000) I AC 119 ................... ,,, ,, ............................ 2616
R••Clarkc( l927)40CLR227 ............................................ ,,..,, 7.71
R 1• I> 120071 EWCA Crim 1937............. , .. , ...... . ............. ,,.......... . 4 28
R v Willans ( 1858) 3 Kyshi< Repoll 16 ...... , .. ,, ......................... . , ....... 2. 11
l\adclltfc v 1::\-ans ( 1892) 2 QB 524 ,, ........ , .. , .. • .. .. . .
. .............. ... 5.4 I
Radford v De Froberville 119771 I WLR 1262,, ................................... 18. 19
l\allk< Town Club Pte Ltd v I.Im fng I lo..k Peter 12012) I Sl.R 374 .. . ............•.. , 5.28
R•1tfc1>tn 7..enirolbank O!lerr<ich A(J v Roy.I Bank of Scotland pk
12010] FWllC 1392 (Comnl) ..................................... 13.58, 1360
Rainfore.t Tr•ding Ltd" St.ie Bank ut India Singapore (2012] 2 SLR 713..
. , , . , 8 16
Rapbah Ju1mbhoy ,. Amccrah R Jum"1>hoy I 1997) l SIR 802 • . • • • • • • • • .
14 27. 14
R•m• Corporation v Pr0\-..1 Tin md Gen<r.tl ln\'<<tm<nh Ltd (1952) 2 QB H 7 ...... 20 39
Ramahng•n> Ravmthran v The Attotn<)' General 120121 2 SLR 49 .. •
.. .... 315
R•nmh s/o Kmhn•n ' 'AXA Life lnsur>n« S1ng•por< PI< Lld (20151 ·I SLR 1 • • 618. 6 ).I
R•n>rsh s/o Krishnan ,. AXA Luc lnsuronce Smg>porc PI< Lid 12016) 4 SLR
..... b l•I
Ran.,g>te Victoria Hot<I v Monte6or<(l866) l.R I Ex 109.... .. .. .. ... .. . ..... 7 IS
Rarlican A.ia l'te Lid v Global Cont•lner
l'te Ltd 12002) I SLR(R) 701 . , .
11 .29
RSC l'rop<rti<• Ptc Ltd v Defu l·urmturc Ptc Ltd (2015) I SLR 997 ............ 13.36. 13.39
RDC Coner<tr Pte Ltd v Sato Kogyo (S) l't< l.td 120071 4 SLH(R) 413
... " . " ... " .. " ... "." ... 10,68, 'l';ibl< 10.1, 10,69, 10.71. 10.72, 10,73, 10.74, 16.42, 22. 17
Reckltl & Cohna11 Products Ltd v Hordc11 Inc11990] I All P.R 873..
. .......... . 23. 11 0
Rccor.l'l'V Ptc Ltd v Mcdl11Corp TV Slng.ipore Pt< I td 12011 J I SLR 830 .. .....• , , ••. 23.26
RcJgr.ivc v Hurd ( 1881) 20 Ch D I , , .. , , .. , ...................................... 13 24
R<g•I (I lo>tings) L<d v Gulllvcr (1942) I All l\R
... , .. , ....... ..... ........ , ... 21.55
Regu' (UK) 1.ul v Epcot Solutions I id 120081 fWCA Civ 361..................... , . 11 Ml
XJCYHi
Tabl< of Cam
Tabl< of Cam
Reichman v Beveridge 120061 llWC A C iv 1659 , . .
.. .. .. .. .. ... 16.57
' 9.40
Resorts World at Sentosa Pte Ltd v Lee Fook Kheun 120181 5 SLR 1039. .
Review Publishing Co I.Id v Lee Hsien Loong 120101 I SLR 52. .
' 5.53, 5.82, 5.85
.5.84, 5.85
Reynolds v Times Newspapers Ltd (200 1) 2 AC 127 . .
Rickshaw Investments Ltd v Nicolai Baro!'1 von Uexkull 120071 I SLR (R) 377
26.26
' 9.22
Roberts v Gray ( 19 13) I Kil 520 .. ..
Seilw;ird Ill Frederick O liver v PP ( 1994) 3 SLR( R) 89 .
. 4.40
Sec Toh Siew Kee v Ho Ah Lorn Fcrrocemenl (Ptc) Ltd [2013] 3 SLR 284, ,., , •.. ,, .• ,, 6.23
Selectmove l.td. Re (1995] 1 W LR 474 . . . .. . .
. .. .. ... . .. . . . .. . .7.69. 8.45
Sembcorp Marine I.Id v PPL Holdings Pte Ltd 120131 4 SLR 193. .. .
I0.15
SH Cogent Logistics Pte Ltd v Singapore Agro Agricullural P te Ltd (20 1·1 ) 4 SLR 1208
.... .. .... . ' ' .. ' ' .. .. .. .. .. ..
' .. .. ' . .. .. .. .. . .. .. ..
' 5.28
Sh;mklin Pier LD v Detel Products l.D ( 1951) 2 All ER 471.
. 9.79
Simon Global Solutions Ptc Ltd v LG International (Singapore) Pte Ltd (200 I) 3 SLR 36S
. .. .... . ...... .. ............ .. . .. ........ .. . ... . .. ... . .... ..
. ..8.40, 14.1 5. 14.19
Shaw v Lighthousexpress Lid (20 10) EWCA Civ 161 . .
. 7.83
Shearson Lehman llutton Inc v Maclaine Watson & Co Lid (No 2) (1990) I Lloyd's Rep 44 1
.. .. .... .. . ' .. .. ' .. ............ .. ' .... .......... .. ' .. .. ' . .... .. .. .. ' ...... .... . 22.102
. .. . 12.56
Sheng Siong Supermarket Ltd v Carilh1 Pte ltd (2011) 4 SLR 1094 . .
Shipton, An<lcrson & Co v Weil Rros (1912] I KB 574 . .... . ....... . .. , . ............ . 16.8
Shirlaw v Southern Foundries ( 1926) Ltd 11939) 2 KB 206 .. , ... .. .. .. .. , ............ 10.43
Shogun Finance Lid v Hudson (2004( I AC 9 19
. .. .. .. .. .• ... .. .. •. . , .. .. .. .. 12.'14, 12.45, 12.46. 12.47, 12.49, Box 12.4, Figure 12.3, 12.57
Sim Tony v l.im Ah Ghee 11995 ) 2 SLR 466.. .. .. .. .. . .... . ... .. ...... . ........ .. .. . 8.16
. 5.48
Sim v Streic h (1936) 2 All ER 1237
Singapore Woodcroft Manufacturing v Mok Ah Sai [ 1979) 2 ML) 166., •. ,, .. ,, .. , , .. , 17.25
Singsung Pte IJ d v l.G 26 lile<tronics Pte l. td 12016) 4 SLR 86 .. .. ........... . 23.36, 23. 11 0
SiSTIC.com Pte Ltd v Compelitioll Commissio1l of Singapore (Appeal No. I of 2010}.
Competilion Appell I Board (28 May 20 12} ... . ........ . ....... . ................ 25.30
Siu Yin Kw'1n v Eastern Insurance Co Ltd ( 1994) 2 AC 199., .. ,, .. ,, .. , ,, .. ,, . 20.35, 20.36
Roberl$(J1) Quay lnvesunent Pte Lid" S1etn Consult.ants Pie Ltd (20081 2 SLR( R) 623
. .. .. .. .. .. .. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. .. . 18.40
Robin M Bridge v DelleOns (19841 I AC 705 ' .. .. .. .. ' .. ' ' .... .. .. .. .. ' ........ ' ... 15.48
Robin v Goh Roon C hoo (1965 ) MLI 2 15 . •. , .... .. .. . ... , ........ .. ...... , .... , ... 12.29
Robin1011 v llonmm (1848) 1 Ex 850 ... , .. , . .... .. ...... , .. , ..... .. ...... . .... 18.3, 18. 11
Roe v Minister of llcahh (195,t) 2 QB 66 ............ , .. , , ............ , .. , , .... , ... , 6.'19
Rookcs v Rarnard ( 1964) AC I 129 ...... , ..................................... .5.21 , S.25
Rose & Frank Co v I R C rompton & Bros Ltd 11923( 2 KB 261 ..... . ............ . ... . 8.76
Routh v Jones I 1947 ) I All ER 179 . . .... .
.. ....... , • .. .. .. .
15.48
Routledge v Grant ( 1828) 4 Bing 653 ....
.. ....... , ... , 7.38
Routledge v McK"y (19541 I WLR 615..
.. .. I0.29
. .. 22.129
Rover International Ltd v Cannon E'ilm Sal.s Ltd (1989) I WLR 912
Rowland v Divall I 19231 2 KB 500
. 22.118, 22.128
RO)"'I Bank of Scotland pie v Et ridge (No 2) (2002) 2 AC 773 . .. .. 13.28, 14.25, 14.32, 14.33,
.. .4.35, 14.37, 14.38, 14.42, 14.43, 14.48, 14.49, 14.50, 14.51 . 14.52
Royal British Bank v 1\Jrquand ( 1856) 6 E&B 327 , .. , ,, .. .
, .. . 21.43
RSP Al'chi1ec1s Planner$ & Engineers v Management Corporation Slrata Title Plan No 1075
("Eastern l. agoon·) ( 1999) 2 SILR 449 .... .. .. .. .. . ........ .. ...... . ........ . ... . 6.38
RSP Architccls Plonners & Engineers v Ocean Front Pte Lid ( 1996) I SLR 113 , •. , , •. , , 6.38
RTS Flexible Systems I.Id v Molkerci Alois Muller GMRI I (2010) UKSC M .. , .. , , , ... , ?.?9
Rubicon Computer Systems Lid v United Paints Ltd (2000) 2 TCLR 453 , , , • , , , •. , , .. , 22.39
Ruxlcy Elcclronics and Construclio·n Lid v Forsi1h 11996) AC 344 .......... . .. 18. 20. 18.30
s
Skandinaviska Er1skilda Baoken AB (Pub)). Singapore Hranch v Asia Pacific Breweries
(Singar ore) Pte Ltd 12011 [ 3 SLR 540 ....... . ... . .... . ....... . ........ 6.92, Box 20.1
SM lntegr:>ted Tr:rnswore Pte IJ d v Schenker Singoporc ( Ptc) Ltd (2005) 2 SLR(R) 65 1
.... 24.43
Smile Inc Dentol Surgeons Pte Ltd v Lui Andrew Stewart (20 12) 4 SLR 308 ........... 10.15.
Smilh New Court Securities v Scrimgeor Vickers (Asset Ma11agcmc111} (1997) AC 254
.... 13.30
S Pacific Resources Lid v Tomolugon Holdings Lid 12016) 3 SLR 1049 ... . .•. . ..• . ..... 8.20
Sadler v Whitemon (1910) I KR 868 ... , .. .. ........ , ... , ... , ........ , ... , .... , ... 2 1.69
Sainsbury v Streel [ 1972) I WLR 834....
.. .. 17.32
Salom;m v A Saloman & Co Lid I 1.897) AC 22 .. .. .. .. ................ . ...... 21.23, 2 1.27
Samsonite IP lloldings SARL v An Sheng Pte Ltd 1201?) 4 SLR 99 .. ........ , .... , .. 23. 10 1
San lntornolionol Pt• l.td v Keppel Engineering Pte I.Id 11998 ) 3 SLR(R) 447 .. .. .. . . .. 16.35
Sandar Aung v P;irkWil)' Hospilals S ingapore Pte Ltd (lrnding as Mount Elizabeth Ho,<pilal)
(200?) 2 SLR(R) 89 1 , ....... , , ... , ............ , ... , ............ , ... , .... , ... 10.18
. .. . 23.93
Sarika C o1rnoisseur Cofe Pt< Ltd v l'ermo SpA 12013) I SLR 531 . . .
Saunders v Anglia Building Sociely I 1971 I AC 1004 ... . ... .. ... . ... . ....... .. ... 11 .9, 12.54
Scornmell and Nephew Ltd v Ouslon ( 1941 J I All ER 14 .. , ............ , .. , , .... , ... , ?.82
Schawel v Ret1de 11913] 2 IR 64. ..
. ... 10.26
SeolSon v Pegg (1861) 6 H & N 295 . ........ . ... . ............ . .................... . 8. 31
Scott v Dllvis (2000) 74 ALJR 1,110 .. ............ , .. .. ......................... , ... , 20.3
Stoll v l.ondon & SI Katherine
Co (1865) 31i & C 596 . . . .. .. .. ... .. .
. 6.62
Seruuons Ltd v Midland Silicones Lid (1962) AC 446 . .. .. .. ... . ... . ... ..9.52, Box 9.3, 9.80
Seo-Land Service Inc v C heong Fook C hee Vincent 11994) 3 SLR 631 ............ , ... , 8.38
Seover '' Ranso m, 224 NY 233 ( 19 18) . .. .. ..
.. .... 19. SR, 19.59
xxix
Smith v Eric S Bush 11990) I AC 831 ........... . ... . .... . ....... . ............ 6.87. 11.53
Smith v Hughes (187 1) LR 6 QR 597... . .. .. .. .. .. .. . .. . . . . .. .. .. .. .. . .. . . .. .. .. .. 12.34
Smith v Leech Brain & Co Ltd ( 1962) 2 QB 405..
. 6.76
Smith v Littlewoods Organisalion Ltd 11987( 2 WLR 480 ... . ....... . ................. 6.27
Smith v M"whood (1845) 14 M & W 452 ............ , ... , , ....... .. .. , ... , ........ 15. 10
Sociele des !l'rod uits
SA v Petr.1 Foods Lid (20 17 ) I SLR 35. ..
. . 23.87, 23. 105
Societe halo-Beige pour le Commerce et l'lndustrie SA v Palm and Vegeiable Oils (Malaysia)
Sdn llhd, The Post Chaser I 1982) l All ER 19........ ,, .. , ............ . , .. , .8.53, 8.61
Societe Noli<:>nole lndustriclle Aerospatiale v Lee Kui fak ( 1987) 3 WLR 59...
.. .. 26.27
Solle v Butcher (1950) 1 KB 671 ... . ........... .. ... . ....... . .... . . 12.23. 12.25, Box 12.2
Soon Kok Ti,mg v DllS !lank Ltd (20 12) I SLR 39? ....... , . ........... . .. , , ........ , ?. IS
South Australi:.\ Asset !\1:1.nagcme1H C.:Orporatiot'I v York Montague 1.Jd 119971 AC191 . . 18.36
South Western General Property v Marton (1982) 263 EG 1090 .. ... . ... . ... . ... . .... 13.59
Southern Found ries (1926) I.Id v Shirlow [19<10) AC ?0 1 ... , ........... , ... , ........ 2 1.46
Southern Oect111 Shipbuilding Co Pie Lid v Deu1sehe Bank AG (1993) 3 SLR 686..
. 7.70
Sp;mdeck ELOgineering (S) f>te Ltd v Defence Science & Technology Agency (2007) 4 SLR 100
' .. ' ' .. ' ' .. '' ' .. ' ' .. ' ' .. ' ' ... ' ' .. ' ' .. ' ' .. ' ' ... ' . 6.7, 6.15 . 6.20. 6.21, 6.22. 6.39. 6.40, 6.42
SJ>l>rtnn S1eel & 1\lloys l.td v Mortin & Co (Contractors) I.Id ( 1973 ) QR 27.. ..
.. .. . 6.11
xxx
Tabl• of Cam
Tabl• of Cam
Specht v Netscape Communications Corp 306 F3d 17 (2d Ctr 2002) .................. 24.28
Spcedo Motoring Pte Lid v Ong Gek Sing [2014] 2 SLR 1398 •.. . •.. .. •. .. •. . . 22.52. 22.133.
..................... " .. " .. " . . " ... " ............. . " ......... 22. 136. 22.141, 22.145
Spedman v P;1scal 10 NY2d 313, 178 NE2d 723 (1961) .............................. 19.77
Spencer v !larding (1870) LR 5 CP 561., .. ,, ........ , .. ,,, .. ......... , ........ , ... , 7.3 1
Girls v Aprilio World Servi« [20021 EWCA Civ IS. CA . ....... .. ... . .. . 13..16. 13. IS
Spilioda Maritime Corp v Cansulex Ltd I19871 AC 460 .............................. 26.26
Sports C-0mte<Lion Ptc Ltd v Dcutc. Sports Gmbll [2009] 3 SLR(R) 883,, .•• , .• 10.68, 10.69.
............................ I0.71, 10.73. 10.74, 10.7S. 10.76. 10.78, 'fable 10.l. 16.42. 22.17
S1>ring v Guardian Assurance pie ( 19941 3 All ER 129 . . .... , .. . , .. , ... , .... . .....15.33, 6.34
Springwell Navigation Corp v JPMorgan Chase Bonk 120101 EWCA Civ 122 1.. ... , ... 13.60
Spurling v l!rnd,how I1956] I WLR 46 1 .............................. , ...... 11. 21, 11.23
St Albons City & DC v International Compulers Ltd (19961 4 All ER 481 .......... .... 22.9
Standard Chartered Bank v Coopers v Lybrand (1993] 3 SLR 712 ................ , .... 6.31
Stondnrd Chnrtered l!ank v P.1kiS1nn National Shif>Ving (No 2) (2002) 3 WLR 1547
............................. '" .......... ' .. ...... ............ ..... .... " 13.)0, 13.31
Stoic Oil Co v Khan (1997) 522 US 3 ................ , .. , ..................... , Box 25.2
T
Tom Tak Ch11en v Khnirul bin Ahdul Rohin.m 120091 2 SLR(R) 240,, .. ,, .•...... ,, ., , 14.9
Tamiz v Googl• [2013) I WLR 21S I........................................... , .... S.66
Tamplin Steamship v Anglo·Mexico.n Petroleum Products I 19161 2 AC 397 ... , ... , ... ,, 17.5
Tun Soo Leng David v Um 1hian Chai Charles I 1998) I SLR(R) SSO
... . ....................... ...................... .. 16A8, 16,5S, 16.58, 16.59, 18.45, 18.55
Tan Tze Chye v PP (1997 1 I SLR(R) 876 ..... ,, .,, ................ , ............ , .... 4.34
Ton Yeow Kho<m 1· Tun Ytow Tot (No I) I2000) 3 Sl.l\ 3•t I , ..................... , ... , 7.SO
•rang Siew Choy v Ccrtact Ptc Ltd ( 1993 ) 3 SLR 44 ........................... .. , ... 23.80
T;1y Joo Sing v Ku Yu Sang 11994) 3 SLR 719, ...... . .............................. , 18.27
Tnylor v llhnil (19961 CJ..C. 377 .................................................. 15.12
Taylor v Rowers (1876) I QBI) 29 1. ....... ............ , ...... ,. ............... , .. , IS.24
Tnylor v Caldwell (1863) 3 8 & S 826 .............................................. li .3
Tekdnt:• Interconnections Ltd v Amphenol (2009) EWCA Civ 1209.,, .•. , ... , ..•...•. , 7.75
Tembusu Gr.owth fund Ltd v ACTAtek Inc (20 18) 4 Sl.R 1213 .. , .. , ......•• . ,. 16.34, 16.37
Temple or P·rc:.h Vihe<lr (Cambodia v Thllilond) (1962) JCJ 6 •. , , .• , , .. , , , •. , , •. , , .• , , 26.9
Teng Ah Kow v Ho Sek Chiu (19931 3 Sl.R 769 ..... ...... , ......................... 6.62
T<:<> Kcng Pong v Public Prosecutor I19961 2 SLR(R) 890 •... •. .. •• . , .• , .. •. ,, •. , .3.36, 4.14
1lrni Kenaf Co Ud v Keck Seng (S) Pie Ltd jl992( 3 SLR(R) 194 .... . . .. . ............. 20.3
Thllkc ,, Mamice 11986) QB 644 ... , ........ , .. ... ..... .. , ....... , ... , ............. 16.5
'me "Bunga Melatl S" 12016( 2 SLR 11 111 ...... .. .......................... ........ 20.42
'!he "Cherry" (2003 1 I SLR(R) 1171 . .. .. .. .. .. ............ , .. .. ....... .. .. ,, ....... IS.35
'!he "l'eitg H:1ng" l200ll 3 SLR(R) 864............................................. IS.JS
The "STX Mumbai" 12015) 5 SLR I ... ................... . ........................ 16.37
11tc Achillc•s [2008 1 3 WLR 345......................... . ..................... Box 18.2
The
of Inland Revenue v Muller & Co's Mnrgarin• l.Ld (1901) AC 217
............................................................................... 23. 111
The Heron II ( 19691 I AC 350.. ................... .. ............... , ............. 18.38
'me Wellne"-< Group Pie Ltd v OSIM International Lid [20161 3 Sl.l.R 729.. • ,, .•. , ... ,, S.34
111omas v Bradbury. Agnew & Co Ltd ( 19061 2 KB 627 .... . ....... . ... . ............ . 5.7·1
'n\01npson Ltd v Robinson (Gunmakers) Ltd (1955) Ch 177, ........... , .... 22.103. 22. 104
111ompson v London, Midland and Scottish Railway Co [19301 I Kl\ 41 .............. 11.1 6
'lllomson Plaz.i (Ple) l.td v Liquidators o( Yaohan Dcpor1mcnl Store Sing;;iporc Ptc Ltd
(20011 3 SI.I\ 437 ... .. .................... . ... . .................... . ... . .7.78, 14.2
'!home v Motor Trade Association I19371 AC 7?7 ......... , ....... , ............ , .. , 14.20
'lhornton v Shoe Lane Parking Ltd f 1971( 2 QB 163 ........... . Box 7.3. I I.IS, 11.20, 11.22
Tickctmaster Corp v Tickets.Com. Inc 54 USPQ2d 1344 (CD Col 2000)•. ,, •. . , ••. , ..• 2•1.28
Ting Siew May v Boon Lay Choo (2014 ) 3 $1.R 609 ....................... IS.7, l:U4. 15. IS
Tinn v Holfmonn & Co (1873) 29 LT 271 ... ,, .. , ..... , , , , ....... , ................ , 7.72
Tjong Mark r:.dward-s v PP )201SI 3 Sl.R 37S ........... ........... .................. 4.50
Tong Gutm Food Products Pte Ltd v Hoe Huat Hng Foodstuff Pte Ltd )199 11 1 SLR(R) 903
............................................................................... 23. 11 6
Tong Sc<1k Kan v Jaya Sudhir Ml Jay<trum IZ016I 5 SLR 887 .. .. ....... ............... . 8.54
Torquay l loicl Co Ltd v Cousin• 1196912 Ch 106 .. ... , .. , ......................... S. 1·1
Tozzi Sri v Bumi Armada Offshore Holdings Ltd (20 17) S SLR 156 .................... 5.10
Trnde F;icili1ie; Pte Ltd 1• Public Prosecutor ( 1995) 2 SLR •l7S .. , .. . , , .• , , .• , .. .. , .•. , 21.26
Ttansniko Pte Ltd v Communlcalion Technology Sdn Bhd) 19961 I SLR 580 . . ... . ..... 7.59
Trnn1o<e:m Drilling UK l,ld v Providence Resources pie 12016) EWCA 372 •. ,, •. ,, ,. , 11.28
v Commission, Case '1'- 141/89 (1995], ECR 11·79 1..... .......... ...... .. 2S. 16
Trek Technology (Singapore) Pie 1.td v FE Global Glrctrouics Ptc Ltd 12005) 3 SLR(R) 389
................................................................................ 23.S4
Triangle Aulo Pte Ltd v Zheng Zi Construction Ptr Ltd )200()) 3 SLR(R) 594 . , •• , , •• , 18.SO
Tribune lnvcsllt>ent Trust Inc v Soo>an Tt:iding Co Ltd l200DI 3 SLR 405 .... . ... . .S.7, 12.48
Tndent Turboprop (D11blin) Ud v First Plight Couriers Ltd (2009] EWCA C1v 290., .. , 11.39
Ts:1kiroglou & Co 1.td v Noblec 'lhorl Gmbt-1 11960) 2 QR 31K........ 17. 19, Box 17.1 , 17.24
TSC Europ•• (UK) Ltd v Massey I19991 IRLR 22 .................................... IS.33
'l\olk v Moxhay (1848) 2 Ph 774 ....................... ............... ..... ........ . 9.88
1\1rf Club Auto Emporium i>te Ltd v Yeo Boong Hua [20181 lSLR655
........................... . .............................. IK.3, 18.1 1. 18.12.18.24. 18.60
'l\1rner v Grovlt 120021 I WLR 107 .......... , ..... , . , ............................ 26.27
TV Medio Pte Ltd v De Cruz Andreu Heidi 1200413SLR 543.,, •• ,,,.,,, •. ,, •• , .6.71. 6.94
'I\\•cddlc v Atkinson (1861) I R & S 393, ................ .. ............ .S.18, !lo.< 9.3. 9.58
.xxxi
xxxll
Sla)rwell Hos:pitali1y Group Pty Ltd v S1<1rwood l-lotds &
\Vorldwide Inc
(2014 1 I SLR 911 ...................... ....... .. ............... 23.90. 23.9'9, 23.112
Steinberg v Scalo (Leeds) Ltd [ 1923) 2 Cb 452 . .•. , .•. ,, •. ,, •• ,, •.. ,, . , , .•. 9.12, 9.30, 9.35
Stc1·cnS<m v Mcl.ean (1880) S QRD 346............................................. 7.42
Stilk v Myrick (1809) 2 c,un p 317
...................................8.32, 8.33, 8.35, 8.36. 8.37. 8.40, Box 8.2, Tnblc 8.1, 8.42
Sto".ni11 Gdanska SA 1• l,atvian Shipping Co 12002) 2 Lloyd:< Rep 436 .•. , .... ,. 16.SI, 16.52
Stone & Rolls Ltd v Moore S1ephc1>s 120091 I AC 1391. .............................. 6.82
Strnits Engineering Contrncting Pte Ltd v Mrrteks Pie Lid I19951 3 SLR(R) 864 . . , , .. , 18.23
S11·otcd1 S)•stems Ud v Ny:un Chiu Shin (alias Yan Qiuxin) (200SI 2 SLR S79 . .. .. ... .. 15.46
Su Ah Tee v Allister Lim and 1hrum11rgan [2014 1 SGHC IS9 ........................ 18.26
Sudbrook Trading E.<tole v Eggleton I19831 I AC 4•M .......... , .. , , ............ , .... 7.80
Suikcr Unie v Comini.sion. I1975) ECR 1663: I 1976) I CMl.R 295 ............... , .... 2S.8
Sun Qi v Syscon Pto lld 120131 SGHC 38 ........................................ 22.11 9
Sunrise Crane, The 120041 4 SLR 715 ....... ,, .•. . . , , , •. , .... , .•.. 6.24, 6.2S. Box 6.1. 6.52
Super Colfccmix lvlonufacluring Ltd'' Unico Trading Ptc l,td 120001 2 SLR(R) 214
...... .. ..... ............................... ............. .................... .. 23. 11 3
Super Servant Two, The I 1990) I Lloyd's Rep I .• , .............................. , ... 17.30
Suthcrl.i><I Shire Council v li cyman I19851 60 ALR I . . , .. ,, .. , •.. ,, ... , •.. , .... , .. ,, (>. 12
T•bl< of CaS<S
Tobi< of Casts
u
Ultr.ima"'' Corpor.illon v Touchc 255 NY 170: NE 441 (1931) ......................6.9
llnic>n Cub1dc Corp. Re 809 Fed 195 (2d Cir 1987) .••..•• . •.•..•..•••.••• .. .• . .... 26.21
llniitd Rank ofKuw•1t v llammond ( 1988) I \\'LR 1051 .• . ..
. •. . . . . . . 20.40
lln11ed Ovtrs<» R;nk Lid v B;nk of China (2006] I SLR(R) 5 . , . • •
.
.
• . • 20.42
Vnih::d Project C<m,uhunt• Ptc Ltd v Leong Kwok. Onn (tn,drng ;u I cong
Onn & Co)
(20051 4 SLR 214 . . • . . . . . . . . . . .. . . .. . . . . . . . . . . . . . . . • . . . .. •• .. • .. ... . ... . 6.83
Univmnl Cargo Carrie,. Corporati<>n v Citati ( 1957] 2 Qll 401 .... ... •. .. •. .. •• ... • . 16.36
Uni\'ertii<: Tnnki-hipx Inc or
v
Tmn1>por1 \\lorkcrs PtdetJtlou
li9R3I I AC 366 .. .. .. .. ... . ............. . . . ... . . , . .. .. .. ... 14.7, 14.8.
Univcrsny
London Press Lid v Universitr Tu1orial Pre"' Lid ( 1916) 2 Ch 601 • .. •.• 23. 11
UOL Dcvelopinenl (NovcnJ) Pie LLd v Commis.<ioner S1omp Dulle; 120081 I SLR(R) 126
.... .. .. . .. .. ... . ... .. .. . ...... . ......... . .. . ...... . . . . . . . . . . . . . . . ... 7.31
or
or
v
Vancou\'cr Mah and Sake Brewing Co Lid v \lancou\'er Brewen<• Lid (1934( AC 181
•• •• .••.. .•. .. .•
•. .. ••
15.56
Varl<y v Wl11pp (1900( I QR 513 . . . ... • . . . . . . . • • . . • • . . . • . . .
. .... . .... 2H3
\li<1om Laundry (Windsor) Lid v Ne ..man lndwtnes Lid ( 1919] 2 1'8 528
. . •. .••.
.
.
•
. 18.42. Box 18.3
Vireu•l Map (Slngaroro) PI< l.1J , . Suncool lntcm•uonal Pet I.Id (20051 251. R 157. .. .. 23.11
Viio Food Producb Inc v Unus
Co Lid 119391 AC 277 . . • . . • . . . . . . . . . 26.23
Viwelly v Mud1is Sclec1 Library Ltd ( 190012 QB 170.. .. . •.. .... . .. . . . . . • . 5.86
Volk,.
Cn« 5/69 ( 19691 ECR 295 .. . . .. ... . ... .. .. .. ....... .. .. .. .. ... .. 25. 19
w
W I Alan & C(1 Ltd'' l!I N.1>r llxpnrt and l1npor1 Co ( 1972) 2 Q ll IK9 . .... . . ...... . .. 8.53
Wade v Simeon (1846) 135 ER 1061. . . .... . ... .. . . . .... . .... , .. , .. ... . .. . ... ... ... 8.27
Wail. Re I 1927) I Ch 606 .. .. .. .. ... .. ... . ... . .. ... . ... .. .. .. .. . , ...... ....... . . 22.SR
Wakley v Cooke 118491 4 hxch 511 . .. ... .. ... ...................... . .... . .. .. .. . . 5,67
Walker v Wunborne (1976) 3 ACLR 529.. .. .. .. .. . . . • . • . • • . • • . • . . . . llox 21.1
Wahm v Morgan (1861) 3 GF & ) 718.. . ... . . . . . . • .. •
•
• • . • . • . • • 13.14
Wahon ln1erna1lon•I Grour (Singapore) Pie Lid v Yau K"·ok Seng Wln11on (2011 ) SGHC 144
•• •• .• ..... .. .. .. .. ... .......
• . . . . . . . . .. 5.39
Wud Lid v R1gn•ll (196711 QR 534 .• .... •.•. •
2264. 22.!>4. 22.109
\\'arn<r Bro1htrs l'1<tur<> Inc v l':cl<on (1937) I KR 209. . • . . • . • •• . • • .
. 18.64
\\'ucsll• Smg>pore P1e Lid v Lau Yew Choong (20171 5 SI R 261! ..... • • , . 11 18. 11 19. 14.4
WalSOn v Orn<> ( 19311 I Ch 455 . . .. . . .. . . .. . . . . . . . . • . . • . •• • . •• • • . . . . ... . 20.28
,
. ... .. . . .• . 21.5
Watson v P•rk Roy•I (C•l<rcrs) Ltd ( 1961 1 I WLR 727.. ••. •.
Wall v l.ongMlon )19301 I KB 130 . ........... . .. . .. ...... . .. .. . .. . . .... . . ... 5.81
Wee Poh Huch Florence v
Motors Ltd )20041 l SI R(K) 58 ., . . .• .. . 18.26. 18.30
Wee l\ichor<I v Wong Mtng Meng & Parlner< ( 1995) 3 Sl.R 68 . .. .. ... ...... ., ... . . ... 5.80
Wee Soon Kim Anthony v Lim Ch<ll' Pee 1200514 SLR(I\) 367 .. , .. , .. . .. ... .. .. ... . . 24.44
Weller v Dcn1011 ( 192 1) 3 Kil 103 . ... .. ... . ... . ... . ... . .. ... .. .. . , ... .. . ... . ...... 2 1.5
Wellmix
(lntcrna1ionol) l'•c Lid'' Lau Yu Mon (2()06 1 2 SI. I\ 117 ,., 12,30, Box 12.2
Whilc ond Ct1r1cr (Coundl;) I Id v McGregor ( 196212 1\C 411 .. .. ... .. . .. .. . 16.54. 16.57
Whitt v Blutll ( 1853) 23 l.J Ex 36 .. • • . . .. .. . • • . . • . .. . • . . • • .. • • . .. . .. • . ... . .. ... 8.2•1
Whi11ing1on v Seal H•rn<(l900) 82 LT •19.. .. . . . . .................. ,
13.39
William Morlon & Co v Muir Rro1'1m & Co (1907) SC 1211 .•• , . .......... .. . . 1049
JCXXIU
Wdbams v Rolfey Bros & N1cholb (Conu·•cton) Ltd (1991 ( I QB I . .. 8.35, S.37, 8.33. 839,
.• •... •• .••..••.
•• 8.40, 841 , Box 8.2. T•bl< 81. 845. 8.81, Ro• 141
Wdsh<r v ess.x Ace• Health Authorit) 119881 A(; 1074 . .. . •. . . . .. . .. • . . .• . . ... ••
6.53
Wm Lin• (UK) Led v Masi<rparl (Singapore) l't< Lid (20001 2 SLR 98 . . . . .
•. 20 8
Wm Suprtme lnvesemtnl (S) Pee IAd v Johoroh b1e Abdul Wah•b (1997( I SIR 679. • 17oi0
( 1985( RPC 59. . . . . . . . . . . . . • . . . • . . • • • . . • 23.54
Wind>urfing lnlernation;I v Tabur
Wing Joo loong Ginseng Hong (Singoporel Co l'ee Ltd v Qinghai Xmyu•n Foreign 1hd• Co Ltd
(2009] 2 SLR(R) 8 14 . . .............. , , . . . . . . . . . . • . .. • . . . • • . . . •. , ... 2H3
Winn v Bull (1877) 7 Ch D 29 . .. ... .. ... ... . . ...... . ................ .. ... . ... .. . 7.78
With" O'Flanogao 119361 Ch575 . . , . .. .. .. ... . .. .. ... . ... .. .. . ..... . . ... ... . . , . • . 1). 18
Wolcro P1c I.Id v Lun Arvin Sylvcslcr (2017) I20 171 4 SLR 747 .. •. ... • .. ••. .. .. , . •... 5,39
Wong Lai Keen v Allgreen Proptrli<> Lid 120091 I SLR(R) l48 . ....... . .. ... . ... .. .. . 12.22
Wong Seng Kwan v PI' l2012J 3 SLR 12.. . . . . . .. ...... .. .. .. .. ... . . .. . .. .... 4.) 1
166 • . . . . . . • . . . • . . . • . .
18S7
Woo Ko.h Woi v Chew Ai llua Sondm (2014)
Woodar lm«Slmcnl Dcvelopmcnl Lid v Wunp<)' Cnns1ru<tion UK Lt.d I 1980) I All FR 571
.
• · • ···•· · · • .... . .. ...
..• .••• .•.
.•
.•
. • .. • . .. .. . .. . ..
••
.•
Wooldridge ,. Sumner I 1963) 2 QB 4) • • • • • •
• • • • .. • • • • • • • • • • . •
Wrolh•m Park Eo.<>1e Co Lid v Park>ide llom« Ud (19741 1 WLR 798 ... ... • • . •• • .
WT Lamb & Sons v Gonng Bnd: Co (193211 KB 710.. . • .
• .. . . . . . . . . .
Wu Yang Construruon Group Lid ,. Zhejiang lm)'I Group Co. Led (2006) 4 SLR 451
Wyall v Kreghnger & Femou (193311 KB 793..
• 9.iO
685
18 H
• 206
14 .7
15.62
x
Xi; Zhengy-Jn v Geng Changqlng (20 15) 3 SLR 732 . ...... .. .. ... .. ... . . 10.15. 10.21 , 18.51
y
Y.ll.S. F&B Group Pie Lid v Soup Resrnura111 Singapore l'te Lid (20 15) 5 SLR 1187.. ... 10. 15
'""'Jun•• Attorney·Genernl (2015 1 I SLR 752, . .. . . ..... .. .. .. ... . ... ... . . . .... . H> 1
\\11>
Ktng Sonny v P•'ifi' PrhM h11e1
Pie J.!d I
I SJ.R(R) )8S. , , , , , I
Y:uuda Fire and /\1arinc Insurance Co or Europe LIJ v Orion ,t..1..a.rine lnsunncc Undcrwn1lng
Agency Ltd (19951 2 WLR 49 • ,
•
20 8
Y<O Soong Hua v Turf Club Aulo Fmporium Ptc l)d (20181.) SLR 806..... . • • . • • • 5. 10
\'co P<ng Hock H•nry v Pal Lil)'
. . • . . . . .. .. .. .. . . .. . . . . 6.S3, 665
Yeo Yok< Mw v Ng Li.mg Poh (19991 )
S29 •
•
•
•
•
.
o 51
Yokog•w• Engmcmng A'" Pee l.cd •• "lhMtcl I ngme<rlng Pie Lid (20091 2 SI R(R) 5U
·• · · • · · · .. ...... .... .•. .. •••
... .. . . .. . ..... .
855
Yong \'u1 Kong v Pubbc Prostcueor (20101 3
849 .
•. . •. . ••
. . . . .26.7. 2611
Yuen Kun \"tu" Allorney-Gcn<nl of llong Kong ( 19881 AC 175. ,.. . .... . •• . . •• . . • . 6 12
z
Yu Sl1an v Li•rn lleng Con<lrucelon (19RR) Pie I 1d 120091 2 SLR (R) 587 ... .. .. .. 6 52
Zhou Weld<>ng v Li•w Kai t.ung (2018 1 3 SLR 1236 . .. ...... . ..... . ....... . .. .. ... .. 18.56
Zurich lnrnrance (Sm!J'1porc) l'le IJd v il Cold l111orior Oe•lg11 & Construciion Pie lid (20081
3 SLll(R) 1029 .. ... .. .. ... . ... ... . ...... .. . .... . .. , .. .. .. ... . .. 10.10. 10.15, 10. 16
XXJUY
Table of Singaport kgislation
Conununity Mediation Cer1tres Ac1 (Cap 49A. 1998 Rev E.d). .. .
Table of Singapore Legislation
A
Applirnion of Engli:ih Law Mt {Cap 7A, 1994 Rev Ed) , . , , , , , •• , . , , , 2.34. 9.lo, 9.32, 10.sz.
. . . . . . .. ..
. .. . . . . .. .. .. . .. . .
.11.4, 13.3, 22.2
Apportionment Act (Cap 8, 1998 Rev Ed}.. .. .... . .. .... .. ............ . .... .... . . .. 16.23
Al'bilr;1tion (Foreign Awards) Act (Cap I OA, 1985 Rev Ed) (repealed) . . . . . . . . . . . . .
. 2.45
Arbitration {International lnvestmen1 Disputes) Acl (Cap l l, 2012 Rev Ed)...
. .. . 26.82
B
Bills of Exchange Act (Cap 23, 2004 Rev Ed )
sU. . .
. . .. .. .. . . .. .
20.55
Bills of Lad ing Act (Cap 384, I 994 Rev Ed)
' 2.
Bu.<1iness Name.<1 Registr.itio1) Act 2014 (No 29 of 2014}
. 9.68
'4. ....
. .. .. .. .. .. .. .. . . . .. .. .. ..
.
4( 1){m) .. .. . .. .. .. .. .... .. . . . .... .... .. .. . .. . .
.... . .. . ..... ...
.
4( 1)(n) ... .. . ........ .. .. . .. .. ............ . ........ .. ...... . ........ .. .. . ... .
S{l) ... . .. ... .. . ................ . .... .. .. .. ...... . ........ .. ............... .
20 . .... .. .. . ... . ... . ............ . ........ .. ...... . ........ .. ...... . ........ .
3 1 . .... . .. .. ... . ... . ....... . .... . ........ .. .. . ... . ............ . ... . .... . ... .
3 I(5) .. . .. .. .... . .. .. .. .. ... . .... . .. , , .. , , .. .. .... , .. , ............. , .. , , ... ,
21.4
21.4
2 1.4
21.4
21.4
2 1.5
2 1.5
35 ' .... ' '." " .. " .. " .. ' " " " .. " .. " .. ' "" " .. " .. " .. ' "' ' "" " .. ' " ' ' 2 1.6
Business Trusts Act (Cap 31A, 2005 Rev Ed) . .... . ................ . ............ 21. I, 2 1.79
c
Civil Low Act (Cap 43, 1988 Rev F..d}
5 .. .. .. .. .. . ........ .. .. . .. .. .......... ... ............ .. .. . ...... .. .... .2.34, 2.35
Civil l.aw Acl (Cap 43, 1999 Rev E<I)
s 4(8) .. .. .. . .. ' . ... ' .. .. .. . ' . ' .. . ........ .. . " ... . ........ .. ...... . ... ' . ... . 9.8 3
6 .......... ' ... ' "' ' ....... ' .. .. ' .. .. ............ ' "' ' ............ ' .... ' ... 19.42
6(d) " ' ' .. ' ' ' " ' ' " ' ' " " .. ' ' .. ' ' ... ' .... ' " ' ' ' " ' ........ ' ... ' ... ' ' ... ' " ' 2'1.43
21 '' .. '' ' .. ' ' .. ' ' .. ' ' .. ' ' ... ' ' .. ' ' .. ' ' .. ' ' .. ' ' ' .. ' ' ..••.. ' ' ' .. ' ' .. ' ' .. , ' .. ' ' 6.80
28(4) .. . ... . ................ . ........ , .. , , .. , , ............ , .. , , ........ , ... I8 .53
35(1) .. . .. .. ........... " " " ............ . ... " ...............................9.7
35(4)(a)- (d ) . ............ . .. .. ............ . .. .. ................ . ........ . .. .. ..9.8
. 2.49
Companies Act (Cap 50, 2006 Rev Ed} . .
. .. .. .. 4.55, 21.48
'4
. 21.8, 21.14, 2 1.1 5
17(3) .
. 21.3
18(1) ..
.. .. .. .. .. . .. 2 1.14
19 .. . ..
.. ... ... .. . .. 21.16
19(5) .
.. .. ... .. ... 21.16
. .. .... ...... .. .. . .. ...... .... . ........ . . .... ............... .. .. 21. 1 I
19(61\).
20/\ .. .. .. .. ............ .. .. . .... .. ...... . .. . ..... . ... .. ............... .. .. 21. 16
22 ... . .. .. . ............. . ... . ............ . ..... " .. ... .. ...... . ........ .. .. 21. 17
23 . ... .. " . .... . ........ . .. . .. " . ........ .. .... " .. ... .. ...... . ........ " .. . 9.47
23(1) . .. .. .. ............ . .. .. ............ . .. .. .... . ....... " .. . .... " ...... 2 1.19
23(1A) .. ... . , .. .. .. . .... .. .. .. .. .. ....... .. .. . ... .. ... . ... .. .. . ... .. .. .. ... 2 1. 19
23(18) . . ............ . ... . ............ . ... . ........ . ....... .. .. . ........ . ... 2 1. 19
25 • • • • ••• •• • I•• •• •• J • t • ••• •• • It• •• •• J • t •• •• •• • It• •• t • • • • • • , .9.46) 9.471 2).191 21.20
25(3) ..
.. .. .. ... .. ...... .. .. .. .. .. ... 21.20
25A
. .. .. .. .. .. ..
. ........ . . .. . .. . . ...... .. .. 21.42, 21.44
25B.
• .. .. .. .. .. •
.. 21.43, 2 1.44
25C. .. ... .. ...
.. .. 21.44
250
.. . .. ... 21.44
37 .
.. .. .. .. .. .. .. . ..
.. .. .. .. .. . .. 2 1.17
39 . ... . . .. .. .. ..
.. .... .. 9.56, 21.59
4 1 ... . .. .. .. .... .. . .. ... . .. .. .. .... ...... . ........ . ... .. ........... .. .. 9.49, 20.2 1
4 1(1) . .. .. .. .... .. .. .. .. . ........ .. ...... . ........ . ... .. ........... .. .. .. .. . 9.49
4 1( 2) . ... " .. " .. " . .... . .. . .. " .. " . .... . ....... .. .. .. ....... . ... .. " .9.49, 20.55
1•15 ... .. .. . ............. . .. .. .. .. ........ .. .. . .. ... ........... . ... . ........ 2 1.45
14 5(1) .. .. .. ........... .. .. .. ............ . ........ . ... . .. . ............ . .... 21. 16
156 . ... . ................................. . ........ . ... .. ... . ............... 2 1.53
157 . .. .. ................ .. .......... " ... . ........ . ... .. ....... . .4.57, 21.51 , 2 1.56
157A . .. ........ . ....... . ................ . ................................. 21.36
159 . .. .. ... . ........ . .. .. ... . ........ . .. .. ........ . ... . ... . ............ . ...
.. ..
162.
163 . ... . ...... ..
.. ..
184 . ... . ........ .. ..
184A- 1.84 F. .. ...
.. .. .. .. .. . ..
.. ..
184G .
• .. .. .. .. .. •
.. ..
205 A .
.. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. ...
205C. .
.... .... ....
.. .......... . ........ . ... .. ........... .. ......
2 16.. .
. ........ .. .. .. ............... . ... . .... . ... .. ...... . 21.6 3. 21.65.
2 16A . .. .. .. ... . .... .. .. . .. .. ........ .. .. .. .. . ... .. ... .. ...... . ... . ........
Thirteenth Schedule . .. ... .. .. .. .. . ... .. ... . ... . ... . ... .. ... . ... . ... . ... .. ...
Companies {Model Cons1itutions) Regulations 2015, 5833/2015 ... •. . .•. .. •. .. .• .
First Schedule
Art 73 . . .... . ... . .. .. ........ . .. .. .. .. ........ . .. .. ... . ... . ........ .. ..
Art 74 . . ........ . .. .. ... . ............ . ........ . ...... .. ................
Art 83(1) .. . ......................... . ........ . ........................
Art 85 . .
. ... . ............ . ... . ........ . ... . ... . ................
Art 94 ...... .................................. . .................... . ...
xxxvi
21.52
2 1.14
2 1.14
21.31
21.3 1
2 1.29
21. 14
2 1.14
21.66
21 .58
21. 14
2 1. 17
2 1.45
21.45
2 1.32
21.53
21.29
Table
Tablt of Singaporr l cgislotion
Competition Act (Cap SOB, 2006 Rev Ed ) .. . ... .. . .. 3.35, 25.3, 25.4, 25.9, 25.20, 25 ..22, 25.39
s 2( l ) . ...... ... . .... . ...... ... .. ...... ... . ....... . ... ...... ... . ... . ... .. .. .. 25.9
s 34 ....................... . ........ 25.3. 25.6. 25. 10, 25.19, 25.20. 25.21. 25.23, 25.45
s 47 . .... . .... . .. . ... .• . ..... 25.3, 25.14, 25.26, 25.27, 25.30, 25.31, 25.32, 25.33, 25.45
' 47(3) ........... . .... ..... ...... ... .......... .. .. .. ........ .. . ........ . ... 25.27
s 48-53 ..... .. ........ ..... ............... .. ................ . ........... ... 25.26
'54 . ........ ... ...... ..... . ........ .. .. . 25.3, 25. 14, 25.35, 25.37, 25.39, 25.42, 25.45
s 54(5). ' ... . ... .. .......... .. ... . ... . ' ... . ... . ... . ... .. ... . ........ .. 25. 36, 25.39
' 54(7) ... . ....... ... .... ... . ... ........ . .. .. .... . ........... ..... ......... . 25.38
'55 ... . ........ ...... .... .. .. ........ .. ...... .. ............... .... .. .. . ... 25.35
s 92 . ... .. ...... ........... ... . ........ . .. ...... .. ........ .. .. . ........ . ... 25.22
SS 56-60 ... , ................ ., ....... .. .. . ... . ......................... , . .. 25.35
SS 54(2}(a) 10 (c) . . ............................ ., .. ....... ... .... .. .... .. . ... 25.36
·n1ird Schedule .......... , .. .. .......................................... , ... 25.22
Constitulion {A 1nendmcnt) Acl (Act 8 o( 196S) .. .. .. . •.. ..... •... . ........ . .. ... ... 2.28
Constitution (Amendment) Act (Ac1 19of1969) ............................... , .... 2.32
Constitution (Amendment) Act (Ac1 2R of 20 16) ... ...... .............. ........ . ...... 3.7
Constitu1ion or 11\e Republic of Singo.port (l999 Reprinl)
35(8) ... ... ... . . . .. . ....... ........ ...... . ... . ....................... ....... ..4.5
39( l )(c) . .. • . .. .. . .. . .. .. .. • • . .. .. .. • . . • .. . .. • . .. • . .. .. .. • . . .. . .. • . • • .. .... 2.40
39A ............ . ....... . ................ .. .. . .............................. 2.40
C onsumer Pro1ee1lon (Pm Trading) Act (Cap 52A, 2009 Rev Ed) ... ... . .. 3.35, 11.6 1. 1 l.6R,
.. .. .. .. .. .. . .. . .. .. . .. .. .. .. .. . .. .. .. .. .. .. .. .. • .. . . . ........ .. . .. ........ 22.6, 24.29
Part Ill ................... . ....................... T:tblc 22.3. 22. 132. 22.133, 22. 145
s2( l) .. . ................... . ............................................... 11.61
4 . ... .. . ... . ... .. ... .. ..... .. ............ . ... . ............ . ....... . .... . ... l l.62
6( 1) .. ....... . .. .... ...... ..... .. ........ ...... ..... .. .. ...... ......... .... 11.63
11 (1) ..... ... .............. .. .. .... . .......... . ..... ....... .. .... .... .. . . .. 11.63
I 2A(5)(c) .. . ................ . .......................................... . .. 22. 145
121!(3) ........... ... .. . ... ...... ... . ... .. . ........................ . ....... 22. 134
12C( 1) . . . .. . ... . • .. . . . • . . • .. . • .. . ..... ••. . . .. . • . . . ... .... .. . .. .. .. . ... . .•. 22. 138
12C(2) .. ....... . .... . ... ..................................... ..... . ... .. .. 22,138
12C(4) ....... .............. ........ ...... .. . .. ............ .. ........... ... 22. 139
120 ... ........ .... ..... ... .. .. ........ .. ..... .. .............. .... ...... .. 22.142
120(3) .. .. .. ... . ... . ' .. .. .. .. ... .. ....... .. .. . ... . ' .. .. ... . ....... .. .. . ... 22.142
12E ......................... . ............................................. 22. 143
121' .... . ... . ... .. ..... .... .. . ... .... . ... . . ............ . ... .... . .. . . ... . ... 22. 14 1
13 .. ........... . , ... . ............ . ...... .. ... . ... . ... . ............ . . 11.64,22.145
IS(I) .................................................................. . ... 11.64
16 . ........................ . .. ......... .. . .... .... .... .... ..... .. ....... ... 11.63
First Schedule . ............................................ , ... . ........ , , .. 11.6 1
Second Schedule . .. . . . .. . . .. . . .. . . .. . . . .. . .. .. . . .. . .. . . .. . . . . .. . . .. . .. . . . .. . 11.62
ConsumL·r Protcctio1\ ( Fair T rading) (A1neudment) Act 20l6 ( Ac1 25 of 20 16) . ... . .•.. I t.66
Contract (Rli;hts of Third Parties) Act (Cap 538, 2002 Rei' Ed) . , •. , ... , . , .. 3.35, !>.53, 9.55,
... . ... . ... .. . .... .. .. .. .. .. .. ... . ... . ... . ... ... .. .. .. . ... ... . ....... ..9.68. 9.91, 19.55
s 1(2) ...................... . ........... .. .. . .. .. .... ........................ 9.56
1(3) ... . .. ... .............. . ................. . ............ .. .. . ........ ' ... ' 9.56
2 ........................................................................... 9.65
2( I)(o) .. .. ... .............. .. ............ .. ..... ........... ............ . .... 9.58
xxxvll
o(
Singaport lt'.gislation
2( l)(b). . .. . .. . .. .. .. .. .. .. . .. .. .. .. . .. .. . .. .... .............. 9. 58, 9.59, 9.60,
2(2) ...... . ........ . .... . .......... ... .. .. ........ . . .......... 9.58, 9.59, 9.60,
2(3).... ... ... ..
. ... . ............................ . .................
2('1) ... . ... . ... ... . . .... . ... .. .. ... . . .. .. . ... . ............ . ............ . ....
2(5) .. .. ........ .. . " ... .. ....... .. ..... .......... ' ... .. . " ............ .9.53.
2(6) ..................................... . ........ ' ....... . ............ .9.63,
3( 1) ............... .. .. ..................... " ........ ............... . ......
3(3) ................. ... ..... .. ..... ..... .. . .. .... . . ........................
3(3)(•) ..... . ................................................................
3(3)(b) .... ............. ............ . " ............ ' .................... .. ...
4(6) ........ .. .. .... .. ........ .. ...... .. ...... ... .. ....................... ..
7(1) ...... . .................. .. .................... . ....................... .
7(2) ............................. . .. .... ...... .. ............ ... .......... ...
7(2A) .................................... . ... . ... .. ... ...... .. .. .. ....... .. .
7(3)
It• I I
ao
I I t I I I •
o•
1 I
o
1 I I t• I I I• I I •
o
I 1 1
o
I 1 I
o•
1 I I
a•
I
It I I•
o
I I' I I I 1
o
J I I I
a
1 I I
o
I I
9.62
9.62
9.58
9.57
9.64
9.82
9.65
9.6 1
9.65
9.65
9.63
9.56
9.56
9.56
9,56
7(4) ............ .... ... .. .. . ............ ...... .............................. 9.56
8( 1) ... . ........ . ... . .. . . ........ ........ . ... . .............................. 9.54
8(2) .................... . ................ . ................... " ............. 9.67
Contributory Negligence and Personal Injuries Act (Cap 5 4, 2002 Re" Ed )
s 3.. ........ ...... .. . .. ............ .. . ... . .... . .. .. . ........................ 6.88
Copyright Act (Car 63, 2006 Rev Ed) ......................................... 23.S, 23.9
Part \I . .. .. . ... . . ... . .. .. ... . ... .. .. . . . .. . ... . ... . . . . . .... . • . . .... . .... . ... 23.37
Divisio11 6 .. ......... .. . ... .. . , .• .. ....•. .. .........•...••..•• . ... • .. .• ... •. 23.39
s 7( 1) ..... ............ .. ..... ........... .. ........ . ............. 23.8, 23.16, 23. 33
7(2) ...... " ............ ' .................................................. 23.32
7(2A) .................. . .... ., ..... ..... ...... ..... , .. .. .... ..... .......... 23.32
7A.. ................ . ........................ . ..... . ............... . ........ 23.8
10(1) . ................ .. ........... ..... ...... ... .. ... .. .. .. ........... .. .. 23.24
16 .. .. ...... ..................... . .. . ............. . ....... . ............ .. .. 23. 12
17 ... ............... . .. ...... ........ . ... . .. .. .... . ........................ 23.12
2SA ... . .. . ., ... . ... . ... .... .... .. ...... ..... . ............................. 23.20
26 . ........................ . ......... .. ...... .. ... . ...... ..... .. .... ...... 23. 19
26(1)(<) .. ....... . ... . ........ ' .. .. .. ... .. . ... . ... ' . .. .. ........... . .. " . ... 23.20
27 .. .. ...... ........ .. .. . ............ . ............ . .................... . ... 23. 11
27(1) . .. ........ .. . " ................... ' . ........ . ........................ 23.13
27(2) ................. ..... ........... .. . . ............. ....... ... .. .... .... 23. 13
27(4) ....... .. .... ...... ..... .. .... . .. .. .. .. .. .. ... . ....... .... .... ........ 23. l3
28(2) . ..... ............. . .......................................... .. ...... 23.lS
28(3)
28(6)
30(2)
3()(3)
.. ..... ............ .. .. . ........ . ............ . ... .. ............... . ...
..... " ............ . ................... .. .... . ....... .................
... ....... ....... ..... ........... .. ...... ........ .... ..... ...... ......
....... .... ............. .. ............... .... . ... .. ...... ..... .. ..... .
30(4) ............................................. ' ........................
30(5) . ........... .. .. .. ...... ........ . ... . .... . ... . ... . ... . ............ . ...
30(6) . .. ... .. ... .. ......... .. ....... .. .. ..................................
3 1 ........... ... ... " .. .... ............. ........... ... ............... 23.22,
32 ........................ ....... .... .... . ........ ........... ........ 23.27.
xxxviil
23. 15
23. 15
23. 16
23. 17
23.17
23.17
23. 17
23.25
2).2R
Tablr: of Singaport ltgislation
Tablr: of Singaport ltgislation
33... .. .. . . .. .. .. .. . .. .
.. .... .. . .. .. ... . .. .. .. .. . ... . .. . . .. .... 23.27,
35 .. .. . .... . ................... . ............... .. .................... . ...
35(2) .. .. . . ... . .... .. .. . ................ . ... . ............ . ... . ...... 23. 30,
35(3) .. . ................................. . ............ . ... . ........... .. ...
35(4) .. . .. .. .. .. ........... .. ............ . .. .. ................ . ........ . ...
36 .. .. ... .. . . .. . ... .. ...... . .... .. .. . .... . ....... .. .. . .... . ....... . .. 23. 29,
37 ... .. .. .. . ... . ... ... ..... . .... . ........ .. ...... . ........ .. ...... . .. 23. 29,
82 ... .. . .. . . ... . .... .. .......... . ........ .. ............... . ............ . ...
82(1 )(b) . .. . . . .. . ... .. .. . ... . .... .. .. . ... .. ....... .. ...... .. ....... ... . .. .. .
83. ....
.. .. .. .. .. ...... .. .. .
.. ...... . ...... .... .. . ...
.. .. ... .. .. .. ...
84 .
85 .
86 .
.. ..
87 .
88 .
89 .
. ...
92 ..
.. .. ... ...... .... . ...
93.. .. . ..... ....
.. .............. . .... . ........... .. ...
94 .. .. .. ... . .... . .. . .... . ... . ........ . .. .. ... . ........ . ... . ............ . ...
95 . .... . ................................. . ................ . ............ . ...
96 ... .. . ............ .. ................... . ................ . ............ . ...
97(2) .. . .. .. ............... .. ............ . .. .. ............... .. ........ . .. .
98(2) .. . .. . . ... . ... . ....... ... .. . .. .. .... .. .. . ... . ... . .... .. .. . ... . .... . ...
119 .. .. .. .. . ... . ... ... ..... . .... . ........ .. ...... . ........ .. ...... . .... . ...
119(2)(0) . . . . . .. . . .. .. .. . ........ . . .. . ... .. ....... . ....... .. ....... . ... .. .. .
I 19(2)(b) .. .
. .. . .... .. .. .. .. . ... .. ....... .. ...... .. ....... ... . .. .. .
.. .. ......... .... .... . ........ .... .... . .. . ..... ..... ...
I I9(2)(c) .. . .
I I9(2)(d) .. .
.. . .. • . .. .. ..
.. . .. .. .. • ..
119(4)
.. . .. • . .. • • ..
.. . .. .. • .. ..
119(5) ",." ,..' " .. " .. ' ,. . " .. ' " .. " .. " .. .. ,. ' " .. " .. " ..
120 .. ..
120A .. .. ... . ...................... ..
123 .. . ..
.. .... ...... ..... .... .. .. . . ..
136 ..... .. ... .......................................................... . ...
136(1) .. .. .. ........ . .. .. .. .. ........ . .. .. ... . ........ . ... . ... . ........ . ...
136(2) .. ... . ............................. . ... . ............ . ............ . ...
136(3) . . .. .. ........ . .. .. ... . ........ . .. .. ... . ........ . ... . ... . ........ . ...
136(4) .. ............ .. ................... . ................ . ............ . ...
136(3A) . .. .. ... .. .. .. .. . ... .. ... . ... . ... .. ... . ... .. .. . .... . ... . ... . ... .. .. .
136(6A) . .. .. .. .. ... . ....... . .... . .. .. ............ . ........ .. ...... . .... . ...
136(611) . .. ... .. .. .. .. .. . ... . .... .. ...... .. ....... . ... . ... .. ....... .. .. .. .. .
I 401l( I) . . . .
. .. . ........ .. .. . ... .. ....... . ... . ... .. ....... . ... .. ...
1401! (4) .
.. .. .. . . .. . .. .. .. .. .. . .. . .. . .. .. . .. • .. . .. . .. . ..
. ..
140H(7} .
.. .. .. . .. .. ..
.. .. .. . .. .. .. .. ..
23.28
23.29
23.3 1
23.3 1
23.3 1
23.33
23.33
23.20
23.20
23.20
23.20
23.20
23.20
23.13
23. 13
23.13
23.15
23.1 5
23.15
23.15
23.15
23. 16
23. 16
23.22
23.37
23.37
23.37
23.37
23.37
2).37
23.37
23.37
23.22
23.38
23.38
23.38
23.38
23.38
23.38
23.38
23.38
23.39
23.39
23.39
140M(I )
23.39
... .. .. ... .. .......
184 ....
193A .. . .... .... .. .. .... . •. . . ... .
193B...
.... .. .. .... .
xxxix
23.14
. . .. 23.4 1
23.41
193C.. . . .. . .
. .. . . .. .. . ... . .. . . .. .. .. ...... . .. .
193C(2}(b} .. ..... ...
.. . .. .. .. . ..
.. ..
. .... .. .. . . ..
.. ..
1930 . . . .... .. .. ....
1930 (1)(a) ..
... .. .. .. ...
.. ..
1930 (1 )(b} . .. . ..
.. ..
1930 (2)(b} .
• .. .. .. .. . ..
.. ..
1930 (4}(b).. .. ..
.. .. .. .. .. . ..
.. .. ... .. ...
1930A ... .. . .. .... ...... .. .. . .. ...... .... . .. .. .... . . .... ......... .. .... .. ..
I93DA(2) .. . . .. . . ...... .. ... .. .. .. .. . ... .. .. . .... .. ... . ....... . ....... .. ...
193DR . . .. . . ............ . ... . ........ .. .. . ....... .. ... .. ...... . ........ .. ..
193DC .. .. .. .. .. .. .. .... . .. . .... . ........ .. ...... .. ... .. ...... . ............
193DD .. .. .. .. .. ........ . .. .. ............ . .. .. .. ... ........... . ............
193DOA ... .. .. .. ....... .. .. .. .. .. ....... .. .. . ... .. ... . ....... . ... . ... .. ...
1930 08 ............ . ... . ............ . ... . ........ . ....... . ... . ........ . ...
1930 0 c •••••t • • • • • J • t • • • • • • • It• • • • • J • t • • • • • • • It• • • t • • • • • J • t • • • • • ' t
• •• •
1930 E .. ............... . ............... . ............................. . ...
194(3) .. .. . .. .. .. .. ..
.. .. .. .. .. ..
.. . .. • .. .. • ..
.. ..
200( I) . .. . .. .. .. .. .. • .. . .. . . .. .. .. .. • .. .. ..... ... . .... ......... .... 23.35,
252COA .. .
. .. .. .. .. .. ..
. .... , . .. . . .. . .. . . .. .... .. ...... ..
252COll .. .. ........ . .. .. ............ . .. .. ........ . ... .. ...................
252CDC . ... .. ............ .. . .... ...... .. . ... . .... . . .... ............. .... ..
23.4 1
23.42
23.4 1
23.4 1
23.41
23.42
23.42
23.41
23.42
23.41
23.41
23.4 1
23.44
23.44
23.44
23.4 1
23. 18
23.36
23.44
23.44
23.44
Copyrighl (Border
Measures) Rcgul;.tions
(Cap 63, Rg 5. 2009 Rev Ed} .. . ............ . ........ . . ........ . .............. 23.39
Copyrigh1 (l' h•grontly Infringing O nline Location) Regulalions 20 14 (S802/2014) .. .. .. . 23.44
Copyright (International Protection) Regulations (RG2. 2009 'Rev Ed) . .• .. .•. .. •. .. .• . 23. 14
Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Acl
(Cap 65A, 2000 Rev Ed).. . ............
. .. .. .. .. . . ..
. ... 20.47
52(2).
. .. .. .... ....
. .. .......... . .. . .. ... . ........ . .. .. .. .. ...... . 4.23
Countcrw1iling :rnd Anti-Dumping Duties A<t (Cap 65R. 1997 Rev Ed) .. .. .. .. . 26.34. 26.37
Part Ill . .. .. .. .. .. .. . .. .. .. .. .. .. .. .. . .. . . .. .. .. .. . . .. .. .. . .. .. .. .. .. .. .. .. 26.38
s 2 ... .. ... . ........ . .. .. ... . ........ . .. .. ... . ............ . ................ 26.37
3..
. . .... .... .. ..
. .... .... .. ..
. .. ...... . .................... . .. . 26.45
Criminal Procedure Code (Cap 68. 2012 Rev Ed)
; 303 . . . .. . . ........ .. .. . .. .. ........ .. .. .. ...... .. ... .. ...... . ........ .. .. . 3.45
359 .. . .. ............ . .. .. ............ . ............ . ... .. ................... . 3.36
s II .. .. .. .. ............ . ... . ........ . .. .. ... . .... . ....... . ................ . . 4.5
0
Defam ation Act (Ct11> 75. 2014 Rev Ed)
; 4. ... . . .. .. ............ . .. .. ............ . .. . .... .. ... .. ...... . ... . ........ . 5.47
5 . .. .• ... •. .. •. .. ... . .. ... .. .. .. .. .•• . ••. .. •. .. .. .. .• .. ... . ••. .. •. .. .. . .5.43, 5.47
7 ..... .. .. .. ............ . ... . ........ . .. .. ... . .... . ... . .. .. ................ . 5.87
8.. . .. .. ........ ......... ........ ................. . ... ............. ....
. 5.67
9 . .. ..
... .. ..... ..
.. .. .. .. .. .. .. .. . ... .. .. .. .. .. ... .. . .. ... .. .. .. 5.7 1
10 . ... . . .. . .... . ........ . .. . .... . ........ . .. . .... .. ........... . ............ . 5.88
12 . .... . ................ . ................ . ........ . ........................ . 5.83
xl
Tablr: of Singaport ltgislation
Tablr: of Singaport Ltgislation
94(e) .. ..
94(f) ..
E
Elecironic
Act (Cap 88, 20 11 Rev Ed) .. ... . . . . . . .. . . . . .. ... ..24.12, Table 24.2
Part Ill .. .. . .. ........ .. .. . .. .. ........ .. .. . .. .... .... .... .. .. . .. .... .. . .. . 24.42
TV ... .. . .. .. .. .. ... . .... .. . ... .. . .... .. .. .. .. .. .. . ........ .. .. . ... . .. 24.40, 2"'42
v... .. .. ... .. .. .... .. ....... ..... ....... .. ........ ....... .. ........ .... . ... 24.46
VJ .
. ... .. .. .. .. . .... .. .. . ... .. .. . .... .. .. . .. ..... . .... . .. . 24.52
' 2. .... .. .. .. ...... . .. .... . ..... . . .. . .... .... .... . .. ...... ... ... .. . .. 24. 36, 24.45
4 . .. .. . ... . . .. .. .. .. .. . ........ .. .. .. .. .. ....... .. .. . ... .. ....... ... 24.13, 24.43
5 .. ........ . .. .. ........... . .... . ........ .. .. . ... . ........ .. .. . ... . .... . .. . 2•!.13
6 . .. ....... .. .. . ... .. ....... . ... .. ....... . ... . ... .. .. . .... . ... . .... . . 24.13, 24 .36
7 ..
. .. .. .. .. .. ..
. .... ... . .... .. .. . .... ... . .... .. .. . .... ... ... 24. 13, 24.36,
s ...... .. .. . .... .. ...... .. .. .. .. . .... .. .. . ... .. .. . .. .... ...... .. .. .. . .. . ... 24.36
9 . .. .. . .... .. .. .. .. .. .. .. .. . .... .. .. . ... .. ....... .. ...... ... ...... ... 24.36, 24.45
10 .. .. . .... .. .. . ... .. .. .. .. .. ... . ... . .... . .. .. ... .. .. . .... . .. .. ... .. . 24.36, 24.45
11 .. .. .
. .. . . .... . .. . .... . . .. . .... . .. . . .. . . . .. . . ...
F
l'•ctors Act (Cap 386, 1994 Rev Ed)
'2( 1) . ... .. .. .. .. .. .. .. ... .. .. .. .. .. . .... .. ...... .. .. ... ...... .. ....... .. ..
8 .. . .. .. .. .. ...... .. .... . .. .. .. .. .... . .. .. .. .. .. .. ... .. .. .. .. .. ... . ... .. .. .
9 .. . .. ... .. .. .. .. ... . .. ... .. .. .. .. .. .. ... .. ... . .. .. .. .. ... .. ... . ... . ... . ...
Frustrated Contracts Act (Cap 115, 1985 Rev Ed) . . . .. . , •. .. •.. . .• , . . .. . 17.42, 17.43,
' 2(2) . .
. .. .. .. .. .. ..
. .... . .. .. .. . ...... .. . ...... 17.44,
2(3) .. .. .. ... .. . .... . .. .. .. ... .. . .... .. .. . .. . .... .. ... . .. . .... . .... .. .. .. ..
3('1) .. .. .. .. ' .. . .... . .. .. .. .. ............ . .. .. .... . .. .. .. . .... . ........ . .. .
3(5) .. . .
. .. . . .. . . . .. . . .. . . .. . . ... . . .. . . .. . . .. . . .. . . . .. . . .. .
. ...
3(5)(c) . .. ...... .. ................ . ....... . ....... .. ........... . ....... . . .. .
22.74
22.78
22.79
17.51
17.47
17.46
17.48
17.49
22.85
.. . 24.13
12 .
. ... 24 .13
. .. ... . .... ..... . .... . .. .... .. . ... .... . .. .... .. . .. . .... . .. .. . .. . 24 .22
13 .
I3(1)(a) . .. ... .. .. .. .. .. .. ....... .. .. .. .. .. ....... .. .. . ... .. ....... , . .. .. .. . 24 .22
13(1)(b) .. .. .. .. . .... . .. .. .... . .. .. .. . .... . ........ . .. . .... . ....... . .... . ... 24.22
13(2) ..
. .. .. .. .. .. ... . ... . ... . ... . .... .. .. . ... . ... .. ... 24 .22
13(3) ..
.. .. .. • .. • .. . .. • .. • .. .. .. .. ..
. ... 24.22
14. .....
. . .. .. .. ..
. . .. .. .. . .. ..
. .. . .... . .. 24. 15, 24.48
IS ... .. . .. .. ... . ... .. .. . ... . .... . ........ .. ...... . ........ .. ...... . .... . .. . 24.49
16 .. .. .. ........ . .. .. ........ . .. . ........ . ........ . .. . .... . ....... .. ... . ... 24.S l
16(1) ..
.. .. . ... .. .. .. .. . .... . ... .. .. .. .. .. ... 24 .51
16(2) .. . .. .. .. • .. .. . .. .. .. . .. • .. . .. .. .. .. .. .. .. .. . .. .. .. .. .. .. .. ..
. .. . 24.51
17 . . .. . . .. .. .... . .. . . .. . . .. .. .... . .. . .... . .. . .... .. .. . .... . .. . .... . .. 24. 41 , 24.42
18 .. .. .. .. ... .. .. .. .. .. . ........ .. .. . ... .. .. . .... . ... . ... .. ....... . .. 24.41 , 24.42
19 .. .. .. ... .. .. .. .. .. .. . .... .. .. .. ....... .. .. . .... . ....... .. .. . .... . . 24. 41, 24.42
First Schedule . .. .. ........... . ......................................... ... 24.13, 24.43
. ... . .... .. ...... . . .. .. .. .. .. . 24.40
Second Schedule
. .. . . .. .. .. .
Third Schedule .. .. .. .. .. .. .. .. .. ... .. .. .. .. .. .. ....... .. ...... .. ....... .. .. .. .. . 24.40
Fourth Schedule .. ... .. .. .. .. .. .. .. ... . ... .. .. .. .. .. ... . ... .. .. .. .. . .... . .... . .. . 24.40
Employment Cloims Act (Act 21 of 2016) .... . ... . ... . ........ . ... .. .. .. ....... . .... 3.35
Employment of Foreign Mtmpowcr Act (Cop 91 A, 2009 Rev Ed)
s5
. .... .. . . ....
. . .... .... ....
. .... .... .... .... .. .. . ....
. 4.59
Employment of Fo1-eign Workers A<t (Cnp 91 A. 1997 Rev !ld)
' 5(3) .. . .. .. ... . ........... .. ... . ....... . .... . ... . ............ .. .. . ........ . •I.20
Enterprise SingopoT<' Board Act 2018 (No 10 of 20 18) . . ........ . ... . ............ . ... 11.66
Evidence Act (Cap 97, 1997 Rev Ed) . . . . . . . . .
. .. . . . .. . .
10.6
65 . ....
. .... .... ....
. . .... .... ....
. .... .... .... ....
10.9
93.. .. .. .. ... .. .. .. .. .. .. ........ . .. .. .. .. ... .
. .. . lo.6, 10.9. 10.10. 10.11 . 19.35
9•1. .... . .. .. ............ . .. .. .. .. ........ . 10.8, 10.9. 10.10. 10.11 , 10.14, 10.1 7, 19.35
94(b) .. . .. ... ....... . ........... .. ....... . ... . ....... . .... . ................ 10.14
94(c)...
.. .. .. .. .. .. ..
. .. . 10. 14
94(d) .. . ... ........ . .. .. . ........ . .. .. .. ... ....... . .. .. .. . .... . .... . ...... . 10.14
xii
.. . . .... . .. .. .. .. ... I0.14
. . . . 10.14, 10.15, 10.17, 10.22
H
Hire-l'urchase Act (Cap 125, 1999 Rev Ed) .. . .. .. .. ...... ..
6( 1) .. .. .. .. .... . .. .. .. .. .. .. .... . .. . . .. .. ... . .... .
6(2) .. .. .. .. .. .. ........ .. .. . .. .. .. .... .. .. ...... ..
6(3) ... . ... . ... .. ....... . ... . ... .. ....... . ... . .... .
........... ... , .... . ....
.. . . .. . .... . ....... . . .. .
.. . ............ . .... .. ..
... . ........ . ....... . ...
22. 14
11.46
11.46
11.46
Income Tax Act (Cap 13,1, 2014 Rev Ed) .. .. . ... . . . .. .. .. .. .. . ..... . .. . ... . ... . ..... 6.83
s 36A . . . .......... ..
...... .......... 21.77
lnternnLiona I Atbitration Act (C ap l 43A, 2002 Rev Ed) , .. . , .. . , .. . . •.. . , .. . , . 26.89, 26.99
lntcrpretolion Act (Cap I , 2002 Rev Ed)
s 9A .. .. ............ . .. .. ............... .. .. .. .... . .................... .3.SI, 3.52
L
Land Acquis ition Act (Cap 152, 1985 Rev Ed) . ... . ........ . ....... . .............. Box I. I
!.<gal Aid tmd Advice Act (Cap 160, 2014 Rev Ed).
. . .. .. .. .. .. .. ... . .. .. 3.60
!.<gal Profession Act (Cap 16 1, 2001 Rev Ed)
s 11 1 . . . .. . . . .. . . .. . . .. . . ... . ....
. .. .. ... . .. . 24.44
Limit;otion Acl (Cap 163, 1996 Rev Ed)
24/\ ..
. .. .. .. .. .. ..
. .. .. .. .. .. .. . .. .
. .. . .... .... . ........ .6.97, 6.98
24A(3) .. ... .. .. .. .. .. ... .. .. .. .. .. .. .. •.. . .. , . , •. .. •.. . ... . , •. .. .. .. ... . ... . 6.97
2•tB... .. .. .. ............ . .. .. ............ . ... . ................ . ............ . 6.97
241!(3)
. .. .. .. .. .. ..
.. .......... . .. .. .. .. . .. . .... ... .. .. .......... . 6.97
Lim ited Lit1bility Partnerships Act (Act •12 of 2005) . .. .. .. .. ... . .. .. ••. .. •. .. ... . .. .. 9.56
Limited Lit1bilil)' Partnerships Act (Cap 163A, 2006 Revised Ed) . ••. . ••• .. •• .. ••. 21.I , 2 1.75
s 4.. .. .. .. ... .. .. .. .. .. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. ... . ........ . .. .. ... 21.76
. .... .. .. . .. .
. . .. . .......... .... . . 21.76
4(3) .. . . .... .... . .. .
5( 1) ..
.. .. .. .... ..
.. .. .. .. . .. .. .. ..
.. .......... .. .. . 21.76
8 ..... .. ....... . ........ . ... . ............ . ....... .. .. .. ....... . ....... .. ... 2 1.76
9(1) ... . ................ . ................ . ........ . ... . ... . ............ .. .. 2 1.77
9(2) ............ . ....... . ........ . ................ . ........................ 2 1.77
xiii
Tablr: of Singaport ltgislation
limited Partnerships Act (Cap 163B, 2010 Re"ised Ed) . .. . .
s 6( 1). .
. . .. . . .. . . .. .
. .. .. .. .. .. .. .
6(2) .. .
6(3) . . ... .. .. .. .. . . .
First Schedule . ... .. .. .. .. . .
Tablr: of Singaport ltgislation
. • ...... 21.), 2 1.73
. .. . 21.74
.. .. . •. . .. ... . ... 2 1.74
2 1.74
. .. . 21.74
M
Maintenance of Parents Act (Cap 1678, 1996 Re" Ed). .. .. .. .. .. .. . .. .. .. .. . . ..
. .. 3.9
Maritime and Port Authority of Sii>gapore Act (Cap I 70A. I997 Re" Ed).
. 2 I .8
. 9.32
Minors' C ontracts Act (Cap 389, 1994 Rev Ed} . . .
' 2.. .. .. .. .. ... . ... .. .. .. ..
. ... .. .. .. .. .. .. .. ... .. .. .. .. .. .. .. ... .. .. .. 9.39
3( 1) . . . . . . . .
. ... . ... . .... . . .. . ... . ....... • . •.. . .... 9.34, 9.36, 9.37. Rox 9.2, 9.38
3(2) . . . . . . .
. .. ... . ... . ................................................. 9.33
Misrepresent:ttion Act (C:tp 390. I 994 Re'' Ed) .........•................•...•• I 3.3, I3.34
s 2( 1) . ... . ... . ... . ... .. ... . ...... .. 6.42. 10.25, 13.35. 13.36, 13.37, 13.43. 13.50. 13.53
2(2) .. . . .. ... .. . ... ... .. .. . ... .. . ... ... .. .. ... 13.43, 13.49, 13.50, 13.51. 13.52. 13.53
2(3) ... .. . .. .. .. ........... ... .. . ............ . ... . ............ . ... . .... . ... 13.53
3 ...... . ................ . .. .. ............ . ... . ................ . ........ . ... 13.55
Misuse of Drugs Act (Cap 185, 2008 Re'' Ed)
s SA .. .. ... . .... . .. .. .. .. ... . ................ . ......................... . ... 26. 14
Motor Vehicles (Third Party Risks o nd Compensation) Act (Cap I 89, 2000 Re" Ed)
s 9(1)..
. . .. . . .. . . .. .
. . . .. . . .. . . .. .
. . ....... . ... . .. ....... .. . . ... . 9.68
p
17 . . .. . . ... . .... . ... . ... .. .. . .... . ... · • · · .. .. . .... . . .. . ... . ... . ..... .. .....
17(1) . . . . . . . . . . . . . .. . . .. . . . • . • . . . . . • . . • . .
• .... ... . ... . . . . . .. . . ... ... . .
25(4) ......................................................................
30(1)(a) . .. . .... ....... .. . .. . . ..............................................
33 .. .. .. ... . ... .. ....... . ... .. .. .. ....... .. .. . ... .. .. ....... " . ........ . ...
34 .. .. .
. . .. . . .. . .•. . . . .. . . .. . . .. . .•. . . .. . . . .. . . .. .
. .. . .. .. .. .. .. ...
34(1) . ... .. . . .. . .. .. . . . . .. . . . . .. .. . . .. . . . .. . . . . . . . ... . .. . . . . . . . .. . . .. . .. .. .
66 ... . ............ ...... ........... ...... ...... .. .. ... .. .............. ... ..
66(1)(a) . .. .. , .. .. .. ..... . .. . .... .. .. ... . .. .. . .... .. .. . . .. ... .. . ... .. .. .. .. .
66(1 )(I>) . ................ . .... " .......... . ........ . .. ... . .. ........... ... ..
. ... . , . . . . . . .
. . .. . , . . . . • . .
. .. .. .. .. .. .
66(1)(c) . ...
66(2) . ... .. . . . . . .. .. . . .. .. . . . . . . .. .. . . . .. .. . . . . . . .. .. .. .. . . . .. .. . . . . .. .. .. .
66(2)(a) . .. ... .. ............... .. ............ ..... .. .. .. .. . .... ...... .. .. .. .
66(2)(1>) . .. . .... .......... .. . ............. .. ...... .. ........... . ... . ........
23.50
23.50
23.47
23.63
23.57
23.57
23.57
23.62
23.62
23.62
23.62
23.64
23.64
23.64
66(2)(g)' ". ' ' .. ' ' .. ' ' .. ' ' ' .. ' ' " ' ' .. ' ' .. ' ' ' .. ' ... ' ' .. ' ' ' " ' ... ' ' .. ' • " ' ' " • 23.64
66(2)(i) . . .. . • " .. ... . ... . ... . ... .. ... . ... . ... . ... .. ... . ... . ... . ....... . . ...
67 .. .. ... . .. . .. .. .. .. • . ... .. . • .. .. .. .. • . ... .. . • .. .. .. .. .. .. • . ... .. . • .. .. .. .
67(1 )(a) ...... .. .. .. ... . .. .. ... .. ....... . .. ....... .. .. ... ...... .. .. . ... ... . .
67(1)(1>) .. .. . ... .. .. . ... ... ...... .. .. . .... .. ...... .. .. .. ....... . ... . ... .. ...
67(1 )(c) .. .. .. .. ... . ... . ... .. .. •. ... . ... .. .. .. ...... •. ............... •. .....
67(1)(d ) .. .. . ... .. ... . ... . ... . ... .. ... . ... . ... . ... .. ... . ... . ... . .... . .. . . ...
. ... . ... .. • . .. ... . • .. . ... .. .. .. • .. . ... . • .. .. .. .
67(1)(e) . .. .. . .. . .... ... .
69(1 ) . ... . .. ... .. .. ... . ... . ... .. .. .. ... . ... .. .. .. .. .. ... ...... . ....... ... ..
7 1 ... . .. .. .. ............ . .. .. ............ . .. .. .... . ... ........... ...... ....
7 1(1) . .. ... .. .. .. .. .. .. ... .. .. .. .. .. .. ....... . ... .. ........... . ... . ... .. ...
7 1(2) . ... .. . .... .. .. . ... . ... . .... . ... . ... . ... . .... . ....... . ....... . ... .. .. .
7 1(3) .
. . .. . ... . ... .. .. .. . .. . ... .... .. .. .. ... . ... . ... .. . .. . . .. . . .. . ... .
76(1 ) . ....... .. .. .. ... .. . ... .. .. .. .. ... .. . ....... .. .. ... ...... . ... . ... .. ...
76(3) . ... .. . ... .. ....... . ... . ... .. ...... .. ... .. .. .. ... . ....... . ... .. .. .. ...
23.64
23.66
23.66
23.66
23.66
23.66
23.66
23.67
23.65
23.65
23.65
23.65
23.63
23.63
Parliament (Pri" ilcgcs. Immunities <1nd Powers) Act (Cap 2 17. 2000 Re" Ed)
s 7... .. . ... . ............ . ............ . .. .. ... .. ....... . ............ . ....... . 5.76
8.. . .. . .
. . .. . . .. . . . . . . . . . . . .. . . .. .
. . .. . . .. . . .. .
5.76
Partnership Act (Cap 39 1, 1994 Rev Ed )
' I. ..... .. .. ........ ...... . ................ .. .... ..... ... ..
.. ...... 21.68
21.70
8 .............................................................. ...... ...... 21.70
9 ..
. . .. .. .. .. .. .. . . . . ... . .. .... . . . .. .. ... . .. .... . . . ... 2 1.7 1
Patent.< Rules 1995 (Cap 22 1, R I , 21)()7 Rev Ed)
r 47(1 ) ...... ... ........... . .. ... ........... ............... .. ........... . .. . 23.63
Patents Act (Cap 221, RI . 2005 Rev F.d)
.. .. .. .. . 23.45
s 2( 1) .............................. ...... . ....... ... ...... . ............ . ... 23.52
. . . .. . . . . . . . . . . ..
. . ............... 23.48
13(1) . ..
14(1 ) . ... ..... . . .... . . .. . ... . .. .. . .. .. . . . . .. . . .... . ... . . ..... . . ........ . .. . 23.49
I 4(2) . .. .. .. ........ ...... . ............... ....... .......... ........ ..... .. . 23.49
1'1(4) ...... . .. .. ........... .. ... . ............ . ... . ............ . ........ . ... 23.52
14(5) .. . ... . .................... ... ...... ...... . ............... ...... ...... 23.52
I 4(5A). . . . . . . . .. .. . . . . .. . . . .. . . . . .. . . .
. . ............... 23.52
14(58) .. .. .. ... . .... . . . .. ... . . ... . .. . ... .. .. . . . ... . ... . .. .. ... . . ... . ... . .. . 23.52
IS , ........ , .. , ,. ... , .. ,, .. ,,. .. , .. ,. ...... .. .. .. , , .. , ...... .. .. .. , .. ,. , ... 23.S3
16(1 ) .. . .. .. ............................. . .. .. ......................... . ... 23.56
16(2) .. . ... ..... ........ . ... ..... ........ . ... . ............ . ................ 23.56
16(3) .. .. .... . . .. .... .. . ... . .. .... " . ... .. .. . .. .... " . .. .. ... . .. .... .. . .. . 23.56
77{3)(a ) .. .. .. .. .. ..
. .. . . . .. . . .. .
. .. . .•. . . . •. .
. .. . 23.68
77(3)(1>) .. .. .. .. . . .. . . .. .. .. . .. .. . ... .... .. .. . .... . . .. . ... .. .. . . . .. . ... . .... 2).68
77(3)(<) .. . ... . .... . .. ... . ... .. . .... . ........... .. .. .. .. ....... . ....... .. ... 23.68
I 13(1) ............................................. ... .. ................... 23.59
Penal Code (Cap 224, 2008 Rev Ed ) ....... ...... ...... ... . ........... .. .......... .. 4.32
. . .. .. .. .. 4.35, 4.42
24 .
. . . .. . . .. . . .. .
. . .. . . .. . . .. . .•. .
25 . . .. . ... . .. .. . . .. . . .. . ... . .. .. . . .. ... . . .. ...... . . .. . .. . . .... .. .. .. .. . ... . . 4.42
t20A . .. ....... .. .. ... .. . ........ . .. . .... . ....... .. ... . ....... . ... . .... . ... . 5.27
16 1-165 . ................ . ................ . ........ . .. ................ .. . ... . 4.43
405 . .. .. ... . ... .. ....... . ....... .. ....... . ....... .. ... . ....... . ........ . ... . 4.32
. . .. .. .. .. .. .. .4.39
4 15 . .. ... .. .. .. .. .. .. • . .. · ·· · • ·· · . .. . . • . .
499 .. .. .. .. .. .. .. .. ... .. ..... . .. .. .. . .. . .. ... . . .. .. .. .... ..... . . .. . . ... . .. .. 5.47
499(1) ... .. . ... .. .. .. ... . ... . ... .. .. .. ... . ... . ... .. .. .. ....... . ... .. ... . ... . 5.47
Pmonal Dato Protection Act 2012 (Act No. 26 of 2012) . .. ... . ... . ... •. .. .. ... 24.52. 24 .55
s 2.. ... .. .. . ... ...... ... .. ........... . ... .. ....... . ... . ... . .... . ..... 24.55, 24 .58
3. .. .. . . . .. . . .. . . .. .
. . .. . ............ . ... . . .. .. .. .. ... 24.57
4{4)(o) ....... .. .. .. . ... ....... .. .. .. . ... ... .. .. .. .. .. .. .. ... .. . ... ... .. . .. . 24.SS
xliii
xliv
s .......... ... .. ........... .. ... ......... ... .... .. ..................... . .. .
7? .. .. ... .............. .. ................ . ........................... 23.6&. 2l.69
Tablr: of Singaport ltgislation
4(4)(b).
.. . 24.58
4(6) .. .
. .. . 24.56
11 .. .. .
.. . 24.57
13 . ....... .. ... . ... ... ..... . .... . .... . ... .. ...... . ........ .. .. . ... . .... Table 24.3
14 .. ....... . ... .. .. .. ....... . ... .. .. , .... . ... . ... . ... . .... . ... . .. 24.59, Table 24.3
15 . . . . .
. . 24.59, Table 24.3
16 .. .. . .... . ... . , .. .. .. . .. . ..... .. .. . .. . . . ....... . . ... .. . . . .. .. .. 24.59, Table 24.3
17 .. .. . ... ... ...... .. ........... .. ...... .. ....... .. .. . ... .. ... . .. 24.59. Table 24 .3
18' ' .. ' ... '' ' .. ' ' .. ' ' .. ' ... ' .... ' ' .. . ... ' ' ....... ' ' ...... ' ' ... ' .. 24.59, Table 24.3
20 .. ....... . ... .. ... . ....... . ... .. ....... . ... . ... . ........ . ... . .. 24.59, Table 24.3
. .. . .. . . .. .. .
.. .. .. .... . .......... Table 24.3
2I
22 .. ... .. . . .. .. . , .. .. .. ... . ..... .. .. . .. . . . .. ..... .. .. . .. . . . ... . .. . . .... Table 24.3
23 .. .. . ... ... .. . ... .. .. . ... . .... .. .. . ... .. ....... .. ...... .. .. . .... ... . . Table 24.3
24,, .. ,, •• ,,, . ,,, ., ,, .. ,, •• ,, •. , ,, .. ,, •. ,, .• ,, •• , ,, •. ,, •• ,, .• ,,, ., ., •. , T.1 blc 24.3
zs . ' ... ' ... ' ' ... ' ... ' ... ' ... ' .... ' ... ' ... ' ' .. ' .... ' ....... ' ' ...... ' ' .. ' T.1blr 24.3
26 . . ... .... . ........ . ........... . ........ . ....... . ........ . ....... . . .. . Table 24.3
36 . ....
. .... .. .. .... ... . .. ..
. ... .. ....... .. ...... .. ....... . . .. 24.63
37 ... .. . .. .. ...... .... ..... . ..... .. ..... .. ........ .. ...... . ........ .. .. . ... 24.63
43(3) .. . .. ... .. ' ........... ' .... ' ........ .. ..... .. ................ . .... . ... 2•1.63
44 .. .. .. ... . .... . .. .. .. .. ... . ............ . ... . ........ . ... . ............ . ... 24.63
45 .
. ............ ............................................... .... . .. . 24 .63
Second Schedule . . .. . ... .... . .. .. . . .. . ... ..... .. .. . . ...... .. .. . .... . ... . Table 24.3
'Third Schedule .. .. .. .. .. . ... .. ... , . .. . ... .. ....... , ... . ... .. ....... , .. . . Table 24.3
Fourlh Schedule . , .. , , ...... , , ... . , •. , ... , . .. , . ... , , ...... , , ....... , ... , Table 24.3
Fifth Schedule ... . .. .. .. .. ... . ........ . ................................. Table 24.3
Sixth Schedule .. .. .... ....... ., .. .. ....... . ........ . ....... . ....... . . ... Table 24.3
Eighth Schedule........ ..... . .. . .. .. .. .. .. . .. .. • .. . .. . • .. ..
. . .. 24 .64
P:1rt IV . , .. .. .. .. .. .. ........... , . .. . .... , ....... , .. . , .... . ....... . ... . Table 24.3
Part V • , , .. . , .. , , .. , , ....... , , .. , , ....... , ... , ... , , .. , .... , ....... , , .. , Table 24.3
Part \II . .. .. .. .. .. .. . .. . . .. .. .. .. . .. . . .. . . .. .. .. .. . .. . . .. ..
. ... Table 24J
Pan IX. .. • . .. . . .
. ... 24.62
Personr.I Da1::1 Protection (Do Nol Coll Regi$tq1) Regulations o( 2013
(S709/ 20 13} ' ... ' .. .. .. .. ' ... ' .... .. .. .. .. ' ... ' ........ .. .. ' ... ' .... .. .. . ... 24.63
Personal Dahl Protection (Exemption from Scclion 43) Order o( 2013
(S817/ 2013) . .... . .. .. ... . ........ . .. .. ................ . ................ . ... 24.63
Practice State1neot on Judicial Precedem 1994 . . . .
. . .. . . .. . . .. .
. 3.40
Pre,1enti01\ of Cor1·up1io1\ J\ ct (Cop 241. 1993 Rev Ed) .. .. . . ..• . •• ... •. . •.. .. .. .4.43, 20.47
s 5. , .. , , .. , , .. .. .... , .. , , .. , , .. , , .... .. .. , .. , , ............ , .. , ......... .4,44, M S
6 .. ' ............ ' ... ' ... ' ............ ' ... ' ........ .. .. ' ... ' ............ ' .... 4.46
8 .. . ... . .... .... . ... . ... . .. .. .... . ... . ....
.............
. .... 4.51
37(1} .. . ...
. ............ .. .. . ............ . ... . 4.51
Proressional Engineers Acl (Cop 253. 1992 Rev Ed)
' 11 (1),, .. , , .. .. ........ . ... . .. .. ........ . ... . ... . ........ . ............ . ... . 15.4
R
Rapid Transil Systems Act. . ... . ... . ... .. ... . ... . ....... . .... . ... . ....... .. ... . ... 25.22
xiv
Tablr: of Singaport ltgislation
Reciprocal Enforcemenl of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) .. .. 26.29
...... .. 26.98
Reciprocal Enforcemenl of Foreign Judgments Act (Cap 265, 200 I Rev Ed) . .. .. . 26.29, 26.98
Rtpublic of Singapore lndependtnce Act (Act 9 of 1965)
s 7. ... .
. .... .... ....
. 2.29
ResidenLial Propcrty Act (Cap 274, 2009 Rev Ed) .. . . ....... . . . . . . .
15.23
Rules of Courl (Cap 322, R5, 2006 Rev Ed) .. .. .. .. .. .. • .. . . .. .. .. .. .. .
..2.44
s
Sale or Goods Act (Cap 393, 1999 Rev Ed)
... . .... . .9.16. 10.!, 10.52, 22.2, 22.3, 22.4, 22.5, 22.7, 22.9, 22.10, 22.11, 22.12.
... .. 22.14, 22.16. 22. 18, 22.23, 22.33, 22.59. 22.61, 22.86, 22.88, 26.48, 26.50
.. .. .. ... .. 22.10, 22.21
2( 1)
3(1)
........ 9.16, 22.15
3(2)
.9.21. Box 9.1. 9.23
3(3)
. . .... .... .. ..
4( 1) .. .
. ........ .9. 17, 9.43
.. .... . .. . .. 22. 15
6.. .. .. .
.. .... . .. ... 22.IS
7.. .. . . . .. .. .. ..
.. .. . ... .. ...... . ........ . . .. ......... .. .... 22.83, 22.85
8 .. .. . .. ........ .. . .. ... . ........ .. ...... . ........ . ... .. ........... .. ...... 22.2 1
9 . ' . .. ' ' ' .. ' ' .. ' . .. ' . •.. ' ' .. ' . .. ' . .. ' ' •.. ' ' •. ' . •. ' . •. ' ' .•. ' ••. ' . •. ' . .. ' ' ... 22.22
10., .. ,, .. . , ............ , .. . , .. .. ........ .. ....... , ... .. ...... , .. Tobie 22.1, 22.27
10(1) . .. ................ ' ................ ' ........ ' ... ' .. . ' .......... 22.58, 22.92
11 .............. . .. . ............. . ............ . ... . ................ . ....... 22.55
I 1(2) ............... . ........ . ... . ... . ............ . .. .. ............ . ... . ... 22.20
I 1(3) ........... . ............ . .. .. ... . .... . .. . ........ . ................... 22. 118
12 .. ... . ........ . .. .. ... . ........ . .. .. ... . ........ . 11.46, 22.4 1, 22.55, 22.56, 22.113
12(1) .. ...... .......... . .... .. .. 10.52, T.1 ble 22.1, 22.34, 22.36, 22.37, 22.118, 22.128
12(2)(a).
. .. .. .. .. .. ..
. .. .. .. .. .. ..
Table 22.1, 22.38, 22.39
12(2)(1>)
... . . .. . . .. .
. . .. . .. . . . .. .
.'lbble 22.1. 22.39
12(3) .. .. .. .. • . .. .. •
.. .... . .. .. . 22.40
12(4) ..
.. .............. 22.40
I 2(5) . ..
.. .. .. .. . .. ..
. .. .. .. .. .. .. . . .. . .. .. .. .. .. .. .. ... ... 22.40
13. .. . . .
.. .... I 1.46. 22.27, 22.55, 22.56. 22.113, 22. 134
13( 1) . . . .... ....
.. .. . .... . ... .. .. . .......... 10.s2. Thble 22. 1. 22.42. 22.44, 22.46
13(3) .' . ................ ' ............ . ... ' ... ' .... ' ... .. .. . ... ' ............ 22.44
14 '' ' .' ' ' .. ' ' .. ' ' ....... ' ' .. ' ' .. ' ' ... ,) 1.46, 22.'19, 22.52, 22.55, 22.56. 22.113, 22. 134
14(2) . .. ........... .. .. .. ............ , .......... 10.52, T.1 blc 22. I, 22.50, 22.52, 22.54
14(28) . ' ' .. ' .... ' ....... ' ' .. ' .... ' ... ' ... ' ' .. ' ' ... ' ... ' ... ' ' ... ' .. ' '' 22.50, 22.5 1
14 (2C) .......... ' ................ ' ................ ' ............ .. .. ' ....... 22.53
1<1(3) ....... , ... . .. .. .... , .. .. .. . . . .. . ............... , . .......... Tobie 22.1, 22.54
15 .. ................................. . 11.46, 22.27, 22.47. 22.55, 22.56, 22.113, 22. 134
15(2) . .. .. .. . .. . . .. . . .. .. .. ..
.. ...... . ........ Table 22.1, 22.47, 10.52
15(2)(a) ... ..
.. .. .. • .. .. . . .. .. .. .. .. .. .
. .. .......... . ... ... . . ... 22.48
15(2)(c ).. .. .
.. 22.49, 22.53
15A
..22.6, 22.1 8, 22.27, 22.56, Table 22.3, 22.113, 22. 11 5
16.
.. .. .. . .. ....
.. .. .. . .. ....
.. .. 22.63
17 .
.. .. .... ....
.. .... .. ..... .. . .. .. .... .... ....... 22.63
xlvi
Tablr: of Singaport ltgislation
. . 22. 64, 22.69
18 . . .. .
19 .. .. .
. .. . 22.70
20 .
.. .. 22.8 1
20(1) . .
. . . 22. 81, 22.83
20(2) ..
.. .. 22.82
20A . ..
.. . 22. 68, 22.69
2 1(1)..
22.72. 22.73, 22.75
23. .. ..
... .. . .. .. . .... . .... .
.. ..... .. ...... .... 22.76, 22.77
24 ... ...... . ... .. ... .. ........... .. . .. ... . ........ .. ...... . ... . .... .. .. . ... 22.78
25 .. .. . .... . ... .. .. .. .. . ........ . ... . ... . . ....... . ... . .... . ... . ... . .. 22. 79, 2 2.90
27 .. .. . .... .. .. . ... .. ...... . .... .. ....... . ....... . ... . ... .. ... 22.24. 22.S.7. 2 2. 11 5
28 .. ... .. .. .. .. .. .. .. ...... .. ... .. .. . .... . .. .. ... .. .. . .... . .. .. 16 .16., 22.30, 2 2.58
29(1 ) . .. ... . ... .. .. .. ....... . ... .. ....... . ... . ... .. ....... . ... . ... .. ... . ... 22.25
29(2) .. . ... . ........ . ... . ... . ........ . ... . ... . ........ . ... . ............ . ... 22.25
• t • • • • • t • t • • • It• •• • t t t •• •• •• • It• •• •• •• t • • • • • • • t t • •
• • • 22.28
29{3) • •
29(4) ..
.. . .. ....... .. ...... .. ....... .. ....... 22.26
30. . .. .
.. .. Table 22.1
30(1) ..
.. .. .. . 16.25, 22.3 1
. .. . 22.3 1
30(2) ..
30( 2A) .
. 22.6. 22.3 1, 22.11 5
30(5) . .
. .. . 16 .25
3 1(1 ) . ..
.. .. 22.32
3 1( 2) .. . .. .. .. .. .... .. ......... .... ...... . ........ .. ...... . ........ .. .. . ... 16.46
32 .. .. ... .. .. .. . ... .. .. . ........ . . .. . ... .. ....... .. .. . ... .. ....... ... . .. ... 22.26
34 ... .. . .. . . ... . .... .. .......... . ........ .. ...... ... ...... .. .. . ........ . .. 22.11 7
35 (1 )(b) . .. .. .. .. ........... .. ... . ........ .. .. . ... . ........ .. .. . ... . .... . .. 2 2.11 8
35(2) .. . .. .. ........ . .. . ................. . .. .. ............ . ... 22.48. 22.S.7, 22. 11 7
35(4) .. . ............ . ... . ............... .. ............... .. ............ . .. 22. 119
35(5) .. . ............ . .................... . ................ . ............ . .. 22. 119
35(6) . .. ... .. ...... .. ....... . ... .. ....... . ... . ... . ... . .... . ....... . ... . ... 22. 11 8
3SA .. .
.... . .. .. ............ . ... . ................ . ............ . .. 22.12 1
36.
• ................................ . .. 22.117
37(1) ..
. .. 22.106
38( 1) ..
. .. 22.107
39 .
. .. 22.107
4 1 . . . .. . • . ..
. Table 22. 2, 22.107
42 .
. .. .. .. .. .. .. . .. . .. .. . .. .. .. .. . .. .. • .. .
.. .... .. Table 22.2
43 .
. ........... .. .. . ... .. ....... .. .. . .... . ... . ... . . .. . Tab le 22.2
44 ... ...... . ........ .. ...... . .... .. ...... . ........ .. ...... . .... . Tnblc 22. 2, 2 2.108
47 . . .. ... . ... .. .. •. . . ..• . •• .. •.. .. .. . . •. .. .•. . ••. .. .. .. •• .. .•. .. •. .. .. . T.1ble 22.2
48 .. .. ... .. .. .. .. .. .. ...... .. ... . ........ . ... . ... .. ....... . ... . ... . ... . Table 22.2
48(2) . .. ............ . .. . ................. . .. .. ............ . ............ . .. 22. 110
48(3) .. . ............ .. ........................... . .... . ... . ............ . .. 22. 109
49 .. .. .. ............ . .. .. ... . ........ . .. .. ............ . 22.58, Table 22.2, T.1 blc 22.3
49(I) .. . .. .. .... . .. .. .. .. ............ . .. .. ............ . ... . ................ 22.95
49 (2) .. . ... . ... . ... .. ........... .. .. . .... . ....... .. .. .. .. .. ... . ... .. .. .. ... 2 2.95
50 . . ... . ............ . ... . ........ . ... . ... . ........ . ....... . ... .. Tab le 22. 2, 22.124
50(1 ) .. . .. .. .. .. .. .. .. • .. .. .. .. .. .. • .. • . . .. • .. .. .. .. .. .. . .. .. . .
. ... 22.98
xlvii
Tablr: of Singaport ltgislation
50(2) . ..
.. . .. .. ........ .. .. . .. .. .. ... 22.99
50(3) . .
. .. 22.99, 22. IQI, 22.102, 22.103, 22.104, 22.124
SI
. . .. .. .. .. .. ..
. .... . Tab le 22.3, 22.124
51(3) .
. 18.16, 22. 124
52 .
. . .. .. .. .. .. ..
. . 'fab le 22.3, 22.130
53 .. .. .
.. Table 22.3, 22.126
54 . .. . .
... ..... . .. .
. . .... . Table 22.3 . 22.106. 22.127
57(2) .
. .. .... ...... . .. .. .... .. ...... . ...... ... ... .. .. . ........ .. ...... . 7.30
6 1 ... . .. .. .. .... .. ...... . ........ .. ...... . ........ . ... .. .. . ........ .. .. 22.9. 22.6 2
6 1(1) . . . .. .. ............ . ... . .... .. ...... . ....... .. ... .. ...... . ........ .. .. 22.2 5
6 1( 5) . . . .. .. ...... ... .. . . .. .. ... . ........ .. .. . ... .. ... .. .. .. .. . ... . .... .. .. 2 2.64
62(2) . .. .. .. ........ . .. .. ... . ........ . .. .. ........ . .. . .... . .. .. .. 22.8, 22.1 5, 22.85
Sale of Good s (United Nntions Convention ) Act (Cap 238A. 2013 Rev Ed ) ... .. .. . 10.52, 22.3
........ . ... . ............ . ... . ............ . ............ . ... . ... . ... . .. Tobie 24.2, 26.48
Securities ond Futures Act (Cap 289, 2006 Rev Ed) . • . . . . . . . . . .
. ... 4.52, 2 1.1 5
s2
. .. .. .. .. . .. .
. .... .... . ... ......... ....
. 4.53
. .... .... ....
. .. .. 4.52, 4.54
2 18 . .. .. .... .... .. ..
2 18(2) .. ... .. .. .. .. •
• . .. ....... .. .. .. .. .. ... .. .. .. .. .. .. .. 4.53
2 19 .. . . . .. . ............. . .. . ............. . ........ . ... .. .......... . .... .4.52. 4.54
2 19 (2) . . ............ . ... . ......................... . ... .. .................... 4.53
22 1
.......................... . ........................ . 4.52
. .... .... ....
. . ...... .. .. . .... .. ...... . .4.52
232 . .. .. .. .. .. .. ....
Singapore Regulations 1823 . .. . ,, .. ,, .. ,, .. . , .. . ,, .. , ... ,, .. . , .. , , ... ,, .. , ... . , .. . , , .2.9
Spom Control Act (Cop 31 IA. 2008 Rev Ed ) . .... .. ...... .. ........... . ........ .. ..
s 3. .. .
. ............ . .. .. ............ . .. ...... . ... .. .............. . ....
4 . .. .. .. ... .. .. .. .. .. .. ... .. .. .. .. .. .. .. .. ... .. .. .. •. .. ... . ... . ... . ... . ....
5 ..... .. .. . ............. . .. . ... .. ............... .. ............ . ... . ........
24.62
24.65
24.65
24.6 5
6.. .. . .
. .. ...... .. .. . .. ..... ... .... .. . ....... .. ... .... . .. .. .. .. ... . .... 24.65
7 .. .
. ........ . .. .. .. .. ........ . .. .. ... . .... . ... . ... . ................ 24.68
Fim Sch edule .. .. .. .. ... .. .. .. .. . ... . .... . ... . ... . .... . ....... . ... . ... .. ... 24.68
State Cou r ts Act (Cap 321, 2007 Rev Ed) .... . ... . ........ . ........................ . 3.44
State o f Sing.ipore Act 1958. .. . . .. .. .. .. .. .. .
. .. . ... ...... .... .. . .. 2.20
Sup ply of Good.< Act (Cap 394 , 1999 Rev Ed) .. . .. .. .. ... .. .. .. ....... .. ...... .. ... 22. 14
s 2. ... . . .. . . ... . .... .... . .. . . .... .... .... . ... . .... . .. . .... . ... . .... ....
11.47
. 2.32
Sup reme C ourt of Judicature Act (Act 24 of 1969) . . . . . . . .
Sup1·eme C ourt of Judicature J\ct (Cap 322. 2007 R<v Ed) . .. .. . . .. .. •. . . .•. . •.. .. .. .. 3.38
T
Tcrroristn (Suppression of Financing Ac:t (Cap 325. 2003 Rev Ed} .. , , .. , , . . , , ... ,, . 13ox 4.l
Third C har t<r 1855 ....... . .. .. ............ . ... . ........ . ... .. .................... 2. 13
Thode Morks Act (Cap 332, 200 5 Rev Ed) ........ . ... . .... . .. . .... . ... . ............ 23.82
Part vr . .. .. .. .. .. ..
. .. .. .. .. .. .. .. . .. .. .. .. .. . . ..
. .. .. ........ ... 21. 101
'2( 1).
.. .. .. .. .. .. .. .. . .. .. .. .. .. ..
. . ...... 23.83. 23.84. 23.89, 23.9 4
2(7) .. . . .. . .... . ........ . ....... . ........ .. ...... .. ........... . ... . .. 23.R9, 2 3.99
2(8) ... . ................ . ................ . ........ . ... .. ............. 23.89. 23.99
2(9) .. . ................. . ................ . ........ . .................. 23.89. 23.99
4( 1) .. .. .. . .. ... ....
.. . .. . .. 23.82
4( 2) .. . . ........ .... .... . ...... .. ........ . ....... . . ..... .. .... . ........... 23. 109
xlviii
Tablr: of Singaport ltgislation
Tablr: of Singaport ltgislation
5(2) . . . . . . . . . . . .. . . . . . .
. ... . ...... ... .. . .. . ... . . . ... . ... . .. . .. .. ... ..
5(4) . . . .. .. . ....... ... ........ .... .. .. ........ .. . . .. .. . .. . ....... . .... . .. .
7 . .. .. . . .. . . . .. . . •. . . .... .. . . • .
. .................................
7( 1) .. . . . . . . . .. ...... .. . . .. . . ... .. .. .. .. ... . .. ... .. .. . ... ... .. . ... .. .. ... . .
7( l)(o) ... •. .. •. .. .. .. ..• . ••. .. •. .. ..• . •.. .. •. . ••. .. •. .. •.. .. •. . ••. .. •. .. ...
7(l)(b) .
. . .. .. • . .. .. . · • · . .. . . .. .. . · • · .
. . .. .. ... · • · .. .. . · • ·· .. . 23.84,
7( 1)(<) ... . .. ....... .. .. .. . . ... .. .. .. .. . . . . ... . . . . . ... .. . .. . .. . . . . ... . 23.84,
7( 1)(d) . . . • .... . . •.. ... .• . ••• . ••. .... • . •. ...•.. ••. ...... •. ...... ••. ..• 23.84,
7(2) ................................. . .. ... . .. ... .. .. . . .. ... .. . ... .. .. ... . .
7(3) .. ... . ... .. .. .. .. .. .. .. .. ... .. .. .. .. ... . .. .. ...................... ' ' ...
7(4) ..................... ... .. .. .. .. .. ... . ' .. . ... .. .. .. ... . ... .. .. .. .. .. ...
7(5) ... . ... .. .. .. ... . ... . ... .. .. .. ... . .. ........... .. . .... .. .. .. ... . ... . ...
7(6) .............•............•............ • ... •. .. .. ... .. .. •.. . ... . .. ... ..
8 . ..... .... .. .. .. .. ... .. . ... . ... .. .. .. ... . ....... .. .. .. .. ...... 23.84, 23. 89,
8( 1} '• ' ' t
• ' • • • o I It• • ' '• I ' t • ' ' too • ' • •I ft • ' ' • o • Ito• • ' • o I It• • ' • o o
' • o • • ' •
23.96
23.97
23.84
23.84
23.84
23.86
23.86
23.86
23.86
23.87
23.88
23.88
23.88
23.99
23,89, 23,90
8(2) . . . . . . . . . . . . . . . . . . . . . • . . . • . . . . . . . . • . .
. ... . • .. .. .. .. .. .. . 23. 89, 23.90
8(4) . . . . • • . . . .. . . • • . . . • .. • . .. • . . . . . •• . • . . . . .. . • • . . . . • . . • . . . . . • . • . . .
. . . . 23.94
8(9) . . . . . . . . . . . . . • . .
. . . .. . . .. . .•. .
. . .. .. .. • . • . ... . .. • .. .. .. .. .. . 23.95
9( 1) .. .. .. . . .. . . ... .. . .. . ....... .. ... . . . .. ... . ... .. ·· • · •· .. .. • . ••. .. .. .. .. . 23.95
10(1) . . .
. . . . . • • . . • . . . . . .. . • . . . . • . . • . . . . . . • . • . .
. .. 23.96
15(2) ...........••.....•.••..•...... . . •. . .. .. . •.. .... . . •. . .. •. . ••. ..•. . .. •. 23.97
18 ... . ... . ... .. .. .. ... .. .. .. . ... ... . .. .. ... .. . ... ... . .. .. .. ... . ... ... . ... . . 23.97
19, .... ' ... ' ... ' ................ ' .. .. . .. ... ....... . ....... ' ............ ' ••. 23.97
22' ' .. ' ' .. ' ' .. ' ' ........... ' .... ' ................ ' ................ ' ... . ' ... 23.97
22(1 )(•) ...... .. . ... ... ...... . .. ......... . .. .. . .. ......... . .. .. . ... .... . .. .. 23.97
. . .. .. .. .. • . .. .. .. • .. .. .. .. .. . 23.97
23 .
. . . .. . . .. . .•. .
23(4) ... . ..... . .. .. .. ... . ....... .. .. .. ... . ... . ... .. ... . .. .... . . ... .. ... .... 23.97
26(1 ) . ........... .. ... . ... .. ... .. . ... .. .. . .... . ... . ... .. .. . .... . ... . ... . ... 23.98
27' .... ' .. ' ' ............... ' .... ' ................ ' ................ ' .... ' ... 23.99
27(1 ) . . .. .. .. .. .. •. ... . . .. •. . •.. ...... •. . .. .. . •. .......•. . .. •. . • •...•. . . ... 23.99
27(2) . ... ...... . .... . ... . . ... ... .. ....... .. .. . ... .. ... . . ..... . . ... .. .. .. .. . 23.99
27(3) •. . . .. .. .. .. •. ... •. . . ................ . .................•.............. 23.99
28 . . . • . ' ............ ' . .. . .. ......... . . .. . ' . ........... . ... . ............ ' •• 23. 100
28(1 )(0) . .. . ' .. .. ........... '' ... ' ............ ' ... ' ................ ' .... ' •• 23. 100
28(1)(b) .. .. .. .. .. •. ... . ... .. . •.. ...... •. ... .. . •. .......•....•.. •• ......... 23. 100
28(1)(<) .. . .. ........ . ........... .. ... . ... .. .. . ... .. ... . ... .. .. . ... ... . .. .. 23. 100
28(2) •. . . .. .. .. .. •. ....................•.. . ....•........... . .............. 23.100
28(3) .. ' ... . ........ ' ....... . ............ . ........... . ................ . ' •• 23.100
28(4) .. ' . .. ' .. .. ........... '' ... ' ............ ' ... ' ............ ' ... ' .... ' •• 23. 100
29 ... . ... .. .. .. .. •. ... .• .. .. . •.. ...... •. ... •. . •.. ... . .. •. ...•.. ••. . .. . .. .. 23. 10 1
31
.. .. .. .. . .... .. .. . ....... .. ... . ... . . ...... ... .. . ... ... . . ... ... . .. .. 23. 102
3 1(2)(•) . . .. .. .. .. •. ....................•................•...•...•.... . ...• 23. 102
3 1(2)(b) . ... . ........ ' ...... '' ............ ' ............................. ' •• 23.102
3 1(2)(c) ' .. ' ' ............... ' ' .. ' ' ... " ....... ' ....... ... ...... ' ........ ' •• 23. 102
3 1(2)(d ) .. .. .. .. . ••. . .. .• . •.. . •.. . .. . . . •. ... •. . •.. . .. . .. •. . .. •. .. .. . .. . .. .. 23. 102
3 1(3) . . . . .. . . .. . . • . .
. . . .. . . .. . . • . .. . . . . • .. . . .. . . • . .
. . .. .. .. .. .. 23. 102
3 1(5)(c) .. .. .. .. .. .. ... .. . ... . ... .. ... . ... .. .. . ... .. ... . ... .. .. .. ... 23.102, 23.108
32.' .. . ' ... ' ........ ' ... ' .. '' ............ ' ................ ' ... ' ........ ' .. 23.102
xlix
32(1) . . . ... . .... . ... . ... .. .. . .. . . . ... . . . ... .. . .. . . . .. . . ... . ... . .. . .. .. ....
32(3) . ... .. .. .. .. .. . .... .. .. .. .. .. .. . .... .. .. .. .. .. .. .. ... . ... .. .. . ... ... .
33 ... . '' ... ' ............ ' ... ' .................... '' ... .. ...... ' ... ' .......
33(1) .... .. . . .. .... . . .. ... .. . ....... . . .. ... ...... .. .. ...... ... ..... ... ... .
34 .
. .. . . .... . .. ...... . . . . . ... ... . . .... .. . . . ... .. ... . ... . ... .. .. .. .. ... .
34(1) ... . .. . ...... . .. . .. . ... .. .. .. ... ... . . ... .. .... .. ..... . ... . ...........
35 ... . ... .. . ... .. .. . ... ... .. .. .. .. ... . ... .. .. .. .. .. .. .. ....... .. .. . 23.104,
35(1)(•)' .. ' ' ••. ' ' •. ' . ... ' .. ' ' ... ' ' •. ' ... '' .. ' .... '' •. ' ' •. ' .... ' ... ' .... ' ••
35(1 )(b) .. .. .. .. .... ' . •. ... •. . ....... • . •. ... •. . •.. .. •. ...... ••. . .......... •
35(1)(<) .. .. . . . . . .. ...... . . . . . ... ... .. . ... . ... . ... .. ... . ... . ... . ... . .. . ... .
35(2)(0 ). . ... . .. .. ... ... . . . . . . . . . . . . . .. • . . . . . . . . . . . .. .
. .. .. .. . ... .. . •
35(2)(1>) . ....... .. .. . ... ... .. .. .. .. ... . ... .. .. .. .. .. .. .. ....... .. .. . ... ....
35(2)(c) , .. . ............. ' .. . ' ............ ' ....... '' ... ...... .. ' ...........
36 ....... .. ....... .. . . .... .. . ... . .. .. . .. ... .. ... . . ......... ... .. .. . ... . ...
38(1 ) •...•...........•................•....•..•....•.......••......••.....
38(2) . ........ . ... . .. .. ...... ....... ... . .. ... . .... ' .. ... . .. ... .. ... . .. ... .
38(3) . ' ' .. ... ...... .. ... ' .. ... ....... . ... ' .. ... ... ' ... ...... .. ' ...........
39(2) . '' ....... ' ........ ' .. ... . .................. '' ........... ' ... ' .......
39(3) . .. .. .. ... .. .. . .... .. . .. ... .. .. .. ... . .. .. ... .. .. .. ... . ... . ... . ... .. ..
39(4) • ... •. .. •. .. .• ... • ... •. .. .. .. .• .. •• ...• . .. .. .. .• ..• •. .. •. .. .. .. .. .. •.
42(2) . ... .. . .... . ... . .. ... .. .. ... . ....... .. .. . ... .. .. ... ...... .. ...... ... .
42(3) . ... .. .. .. ... . ... . ... .. .. .. ... . ... ... . .. .. .. .. .. ... ...... .. .. . ... ... .
46(1) . .
.. . .. ... . .. .. ... . ... .. ....... . ... . ... .. .. .. ... . ... . ... .. .. .. ..
46(2) . .
. . .. . . .. . . .. .
. . ....... . .. .. . . . . . .. .. ... . .. . . ..
47 .
... .. ....... . ....... .. ....... . ....... ' . ... . ....... . .... . . .. . ..
23. 102
23. 102
23. 102
23. 102
23. 102
23. 102
23. 1OS
23. 105
23. 105
23. 105
23. 104
23. 104
23. 104
23. 106
23. 106
23. 106
23. 106
23. 108
23. 108
23. 108
23. 107
23. 107
23. 103
23. 103
23.103
u
Unfa ir Conlroct Terms Act (Cop 396, 199•1 Rev Ed) ... ,, 10.36, I 1.4, I l.5, 11.28, 11.36, 11.37.
........ , .. , , ............ , .. , , ........ 11 .38, I 1.39, 11.41. 11.51. 11.57, 13.55. 22.3 1, 24.29
s 1(1) .. . ....... . .... . ........... .. .. ............... .. ... . ........ . .. .. ..... 11.41
1(3) . . ... .. .. .. ... . ... . ... .. . ... ... . ... .. .. ... . .. .. ... .. .. 11.37, I 1.40, Figure I I.I
2 . ... . ... . .. ... .. ...... ... . .. ... .. ....... .. .. . ... .. .. ... . ...... 11.37, I 1.39, I 1.4 1
. . . ............................ .. ...... 6.87, I 1.42, Figure I I.I
2( 1) . • . .
2(2) .... . ...... .. ... . ... .. ...... .. ... . ... . ........ . ... ..... .6.87, 9.66, 11.39, 11.43
s 2(3). . . . . . . . . . . . . • .
. .. . . .. . . . .. .
. 6.86
2- 4 .. . ... ...... .. ....... . ... .. .. ... .. . ... . ............ .. .. . .. . . .. .. . . .. .. . 11.39
2-7 .. . .
. . . . . • . . . . . . . . • . . . . . . . .. . . . . . .. . . . . . . . . . . .
. .. .. .. .. .. . 11.40
3. .. .. . . . ... . •. . . ... . . .. . . .. ••• .. ... . . . .. . . ... .• . . • . . . ...
. .. .. .. .. .. . I 1.44
3( 1) .. . .. .. . . .. ... . .. .. . .. .. .. .. ... . .. .. . .. .. . . .. .. .. ... . .. ... . . 11.44, Figure I I. I
3(2) . • .
. . • . . • • . . . . . . . . . . . . . . . • • . . . . . . • . . . . • . . . . • . . • • . . . • . . . . . . . . • . 11.45
4 . ... .. ... . .. ... .. . .. ... .. .. . .... .. .. . ... .. .. . .... .. .. . ... . ... .. .. ... .. .. . . 11.39
6 .. ' .. '' ................ ' ... ' .... . ........... ' .... ' ............ 11.46, 11.52. 22.55
6(1) .................... ' ................ ' .. .. .... ' ... ' .............. 11.46, 22.4 1
6(2) ............ ' .. ' ............. ' ................ ' .. .. .................... 11.•16
6(3) ............ .. .. ' ............ ' ... ' ............ ' .. . ' ... ' ........ ' ... ' ... 11.46
7. ' ' ... ' ' ...... ' ' ....... ' ' ...... ' ' ....... ' ' ...... ' . .. ' ' ... ' ' •• ' .11.39, 11.47, 11.52
7(2) .. ' .. .. .. .. ... . .. ... .. .. .. .. ... . ... .. .. .. . ... ... .. ... . . ... .. .. ... .. . ... 11.47
7(3) ... .. ... . .. .. ... . ... .. ... . .. .. ... . ... .. ....... . ... . ... . ... .. ... . ... .. .. 11.47
Tablr: of Singaport ltgislation
7(3A) . .
7(4) .. .
8..
.. .......... I 1.47
I 1.47
.. .. 13.55
JI
11.43
I 1(1) ..
.. .. .. .. .. , .
11.51 , 11. 52, 13.55
I 1(2) . .
. .. . 11.52
11(5) . .
.. ........... 11.51
12.....
. . . .. • • .. • . . .
.. . ... . .. ... ... 11.37, 11.50
12( 1) . ... . ... .. .. .. ... . ... . ... .. .. .. .. .. ... ...... ... ...... .. ...... ... . ... . . 11.48
12(1)(•) .. . . . .................... . . .. .. .. ... .. . ... .. ...... ... ...... .. ...... . 11.50
12(1 )(b) .. . ... . ... .. ... ..... ... .. .. ...... ... ...... .. ...... ... ...... .. ...... . I I.SO
I 2(2) . ... . ... .. .. .. .. .. ... . ... .. .. .. . ... ... . ... .. .. .. . ... .. ... .. .. .. .. .. .. . 11.48
12(3) . ... .. .. .. .. .. .. ....... .. .. .. ...... ... .. . ... .. ... . ... .. .. .. .. .. .. .. ... 11.48
14 . . .•. .. •. .. .. .. ... .. •. .. .. .. •.. . ... .. .. .. •. .. •.. . ... . ... .. •. . 11.40. 11.42, 11.46
26 • • • • •
• ! • • • • • t • t • • • t t • • • • t t t •• •• •• • It• •• • t •
• • • • • • • • • • • • J l ,39
First Schedule .. ,
........ .. 11.39, Figure I I. I
par;1 I . .. ... . ... . .. .
. .. . I 1.39
panl 2 . .. .. . .... . ..•
11.39
. .. . 11.39
parn 3 .
pAra 4 . .
. .. . I 1.39
Second Schedule . ... .
. .. 11.52, 11.53, 11.58, 13. 59, 22.55
.. • • . .. . • .
w
Workplace Safety and I leal1h Act (Cap 354A, 2007 Rev Ed) .... •.. ... •. . ••. ..... 4.55, 4.56
Workplace Safety and Health Act (Cap 354A, 2009 Rev Ed) . . . . . • • • . . • • . • • . . . . . .
. 3.35
Ii
This page inremio11a//y left bhmk
Table of Foreign kgislation
N
New York Convention on •he Recognition and Enforcement of Foreign Arbi1ral Awards 1958
.. . ....... . ... .. ........... .. ............... .. .......... .. ... .. 2.45, 26.89. 26.98. 26.100
Art V.
. 26.89, 26. 10 1
V(I) .. .. .. .. ........ . .. .. .. .. ............ . .. ... ... . ... .. . .. ............ .. . 26. 104
. . . ... . 26.105
V(ll). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • • .. . . . . . • . . . . • . . . . . . . • . . .
North A1'11crican Free Tuade Agreenlent. .
p
Table of Foreign Legislation
Protection e>f Birds Act 1954 (UK) . .
. ... . 7. 18
R
Renl Reslriction Ordinance l949 (Uganda).. .
A
Age of
. ... 26.33
M1 1971
.... .. .. .. .. .. ..... .... .. ,. .. .. ............ ... .. •9.7
B
Rcrne Convention for the PrOle<:tion of LilcrOr)' :.tnd 1\ rtistic \Vorks .. . . .. •. ... .. ... . . 23.14
Build ·Orcrate-Trans fer Law [Republic Act No 77 18) (Philippines)
. .. . 26.69
c
Competition Act 1998 (c 41) (U K)
Constitution of the United States ofi" America (US)
. 25.2
Arl II, s 2 . ... .. . ... ... . ... . ... .. ... . ... . ... . .. ... .. .. . ... ... .. . .. ... .. .. .. . 26.11
l 4th Arnendment . . . .
. • . . . ... .. . . . . . . • . •.. . .. . .. .. . 26. 17
Contract (Rights of Third Parties) Act 1999 (UK) .. ... . .. .... ...... . ... . .. .. .... . .. . 19.55
15.20
Restatement of Contrncts. S42 (1932) (US) .. .. .. ... .. .. .. .. .. .. .. .. ... .. .. . ... .. .. .
Resldlen1cnl (Finl} of CMlr;cls §133 (1932) (US) .. . ... .. .. •. ... . .. •. ... .. . ••. ... . .
Restatement (Second) of Contracts §43 (1981) (US)... .. . . .. ... . ... . . . . . . . . . .... .
Restatement (Second) of Contracts §302 (198 1) (US) .. .. .. .. .. .. .. ... •. .. .. .. .. .. .. .
Resintemcnt (Second) of Cont r:1cts §309 (198 1) (US) . ... .. .. .. ... .• . •. ... .. . •.. ... . .
Restatement (Second) of Controcts §3 11 (1981) {US).. .
. . • . . . . • . • . . . . . • . .. . . .
Restatement (Second) of Contracts §3 17 (198 1) (US) . ... .. .. .. ... . ... .. .. .. .. .. .. .. .
Reslnternent (Second) of Contrt1cts § 3 18(2) ( 198 1) (US) .. .. .. ... . .. •. ... .. . ••. ... . .
Restatement (Second) of Controcts §321 (1981) {US).. .
. . .. . . ... . . . . . . . . . ... . . .. .
Restatement (Second) of Contracts§ 328 ( 198 1) (US) ... .. .. .. .. .. ... .. .. .. .. •. .. .. .
19.29
19.59
19.29
19.59
t 9.63
19.62
19.69
t9.7 t
19.76
19.74
s
Elcclronic Signatures in Global and National Commerce Act 2000 (US) .. .. .. .. .. .. .. . 24 .38
Sale of Goods Act 1893 (UK) . ... . ... .. ... . .. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. .22.2. 22.18
Second Chtrrter of Justice 1826 (UK} . .. .. .. .. .. ... . .. ... .. .. ... .. .. .. . ... .. .. .. 2. 10, 2.11
Sherman A1'1i-·lhist Act ( 1890)
. . .. . • . . . . . • . .. . . . • . . . . . • . . . .
. Box 25.2
Statute of Frauds 1677 (UK) . . ... .. .. .. ... . ... . ... .. ... . .. .. ... . ... .. . 19.41, 19.42, 19.44
F
u
Family Law Reform Act 1969 (UK) ... . ... .. ... . .. ....... .. .. . ... ... ...... .. ...... .. ..9.7
Fertilisers and Fccding Stuffs Act, 1906 (UK) ... .. .. . .. ... ... ...... .. .. . ... . ........ . 15.8
UK competition law (Competition Act 1998 (c 41) (UK)) . .. .. .. .. ... .. .. .. .. .. ... . .. 25.2
Unft1ir Contract Terms Act 1977 (UK) . ... .. .. .. .. .. .. .. ... .. .. .. .. ... .. . 11.4. 11.36, 11.67
Uniform Commercial Code (US) . . .
. .19.32, 19.35, 19.43, 19.48. 19.50
Art 1·203 . ... .. .. .. ... . ... . ... .. .. ..• . •. ... . .. •.. .. .. ... . ... .. .. .. .. .. .. .. . 19. 13
2 . .. .. .. .. .. .. ... .. .. .. .. .. .. ... .. ... . ... . ... . ... .. ... . ... . ... . ... .. . 19.1 7, 19.47
2-205 .
19.33
2·207 . ... . ... .. .. ... . .. .. .. .. ... .. ... . .. ... .. . ... .. .. .. .. .. ... .. .. .. .. .. .. . 19.47
2·210 . ... . ... .. .. .. .. .. .. .. .. ... .. .. .. ... . ....... .. .. .. ... . ... . ... . ... .. ... 19.69
19.74
2-210{'1). ...
2· 718 . .. .. ... .. .. .. ... . .. .. ... .. .. .. .. .. ... .• . ••. .. •. .. .. .. ••. . ... .. •. .. .. . 19.88
9·204 . ... .. . ... .. .. .. ... . .. ... .. .. .. .. ... . ... . ... .. .. .. ... . ... . .. .. ... .. ... t9.76
E
L
IA1w Reform (Enforcement of Contr;icts) Act 1954 (UK) 2 & 3 Elit 2, Ch 34 . . . • . . . . • . 19.42
l-'lw Reform (Frustrnted Contr.cts) Act 1943 (UK). .. .
t7.42
Limited Partnerships Act (UK) .. .. ...... .. .... .. .. . ... ... . . .. .... . . .... ... . ...... . 21.73
M
Misrepresentation Act 1967 (UK) . .. .. ... ...... ... ............... .. .............. . ..13.3
Uniform Elec1ronic 'J'ra1u1actions Act 1999 (US) . .
. . . . 24.38
US Foreign Account Tax Compliance Act (26 USC §60380) . .. .. .. .. •.. .. .• . ••. .. .. . 26.14
liv
Table'. of Treaties and Conventions
1(3) . . . .
. .. . . .. . .•. .
. .. . . .. . . .. . . .. . .. .. . . .. . . ...
5. .
• .. . .. . . · • · · ·
... .. ... . ....... . ... . .... . . . .
8 . . . . .. . . . . . . .. . . ... . . .. . .. ... . ... ... . .. ... . .. ... .. .. .. .. .. ... .. .. . ... .. .. .
9 ..... ' ' " ' .... ' .. ...... ' .. , ' ............ ' " ' .... '' ... ""' .... ' "' ' ""' .. ..
18 .. .. ... .. . •.. .. ..• . •. ... .. .. .. .. ..• . •.. .. .. .. .. .. .. .. ... . ••. .. .. . •.. .. ...
22 . . . . .
. .. . .. .. .. .. .. ...
28 .
. . . .. ... . . .. ...... . . .. . ... .. . . .. ... . . .. . ... . .. .. . . .. . ... . ... . ... ... . .
28(3) . . . .. ... .. . . ... . .. . . . . ... .. .. ... . .. . . . . .. ... .. .. .. ... . ... .. ...... .. .. .
30, .. . ' ' " ' .... ' ... . .... ' " ' .... ' ... . .... .. ...... '' ... .. ...... ' "' ' ""' ....
Table of Treaties and Conventions
26.90
26.9 1
26.92
26.93
26.95
26.95
26.96
26.96
26.97
u
A
Agreement on Subsidies and Countervailing Measures,,,.,,,.,,,, .. , .•. ,, •. ,, .. ,, .. , 26.39
Agreement on Trade Related
Measures .
26.80
Anti-D umping Ag reemenl . . . . . . .. ... . , , . .. . . . . . . .. ,
. . . . . ... . . ... . ... . . .. . . .. . 26.36
c
Convention on the Use of Electronic Communk<'l tions in lntern:.'ltional Contracting . .. . 24.11
Art II
. .. . . . .. . . .. .
.
12 . . . . .
. . . . . . .. . . ... . .. . .. . . . . . . . .. . . . .. . .. . . . . ...... . . .. . .. .. . . . . ..
13 , . ... . .. . . ........ . ... . ... .. .. . .. . .. .. .. ....... , . ...... ... ....... . ... .
14 . " "' . " "' ""' ... . ... . ... .. ""' ... .. .. . ' " "' ""' ... . ......... ""' ... . '
.. .
.. .
.. .
...
24.15
24.49
2•l.26
24 .5 1
G
General Agrecn1ent on Tariffs and Tm.de . . .. . . .. ... .. . ... .. .. .. .. .. ... . .... .. 26. 30, 26.36
General Agreeinent on Trade in Services. . . . .
. . . . . •.. .. .. .. .. .. .. . . ... .. .. .. .. . 26.80
H
Hugue-Visby Rules . .. .. . . .
. 6.36
Centre for che Seule1nent of lnvestme1H Disputes . .. . .. . .•• . • . . . . . 26. 81, 26.83
Art 25 .. .. . .. .. .. .. .. .. .. .. . .. .. .. .. .. .. . .. .. .. .. .. .. .. .. . . ... . •.. .. .. . . .. . 26.82
M
Model l,aw 0 11 Electronic Commerce 1996 .. .. .. .. .. .. •.. .. .. .. .. 24. 1O. 24.1l , 24. 34. 2•l.48
Model Law on Electronic Signatures 2001, •. ,, .. ,,, ., , , •. ,, •. ,, .. ,, .. , , 24.33, 24.35, 2•1.36
Art 7 .. .. .. . .... . ... . .. ... . ... ... . .. ... . ... .. . .... . .. .. .. ... ...... . ... . .... 24.34
Model Law on International Com1n ercial Al'bilrntion 1985.
. . .. . . .. . . .. .
. . . .. . . .. . . .. .
, . . . 2.45, 26.89, 26.94, 26.99,
. . .. .. .. . . .. . . .. . . ... . 26.101. 26.105
Arl 1(1) ,, .. , ,, .. , .. , ,, .. ,,., , .... ,, .. ,, .. ,, .. , .... ,, .. ,, .. ,, .. , .. , , .... , .. , 26.90
UNIDRO IT Principles or ln1erno1ional Commercial Contracts 2010. ,. ,., . , •. . , . 19.16, 19.32
. .. . . .. . . .. . . . .. .
. ... .. ... . .. .. .. . .... l9.13
Art 1.7... .. .. .. .. .. .. .. .
2.4(2) .
. . .. .. . . ' . ... .. .. . ... .. .. ' . ... . . .. . ... . . ... . ... . ... . ... ' . ... . . .. 19.33
2.6(2) . .. . . . . .. . . . .. . . .. . . .. . . .. . . . . . . . .. . . ... . .. . . . . . . . .. . . .. . . . .. . .. . .. .. . 19.25
2. 11 .. . . .. . . ........... .. .. .. .... .. ..... .. ........ , .. .. ..• . ••. , . ...... .. .. .
2. l7 .. ... . .. ... . ... .. .. .. ....... .. .. ... .. .. .. . ... .. .. .. ... · •·· · . .. .. .. .. ...
2.20 . . .
.. . .. ... . ... . ... . ........... . ... . ....
2.21 . . . . . . . . . .. . . . .. . .. . . ... . .. . . . . . .
. . . . . . .. . .. . . ... .
. .. ... .. . ... . . . . . . ... . ... . . .. . ... . . ...
2.22 . .
. . . . . . . . . . .. . . . . .
7,4, 13 . ' . " ' ' ........ . ... ' ... ' .... . .. .. ... ' ... ' ""' . ... . ... .. .. ' ... ' . ... . ...
Unifonn Dorrn.lin Name Dispute Resolution
19.5 l
l9.40
l9.S I
l9.5 1
19.5 1
19.89
United Nations Convention on Contracts for the lnternationa.1 Sale of Goods . .. . 10.52, 19.14,
. .. .. .. .. . . . . . .. .. .. .. .. .. . . . . 19.32, 19.38, 19.39, 19.40, 19.43, 19.50. 22.3, 22.4, 22.5. 26.48
Part II . . .. . .. .. .. .. . . .. . .. . . .. .. .. . . . . .. . . .. . .. .. . . .. . . .. . .. .. .. .. . . .. . . .. . 26.52
111. ... ' ' .. , ' .. , ' .... .. .. ' .. ,' .. , ' ........ .. .. ' "' '' ... .. .. . ... ' "' ' ""' .. .. 26.53
Art I ( l )(a) . .. •. , . ... . ... .. .. .. .. . . ....... , ... .. .. .. ... . ....... . ... .. ... . ... 26.50
2 ..
• . .. ....... .. ....... . ....... .. ... . ....... . .... . ... . ... 26.51
3. .. . . .
. . . . . . .. . . . .. . . .. . . .. . . .. . . .. .
. . .. .. .. . . . .. . ... .. .. . . .. . 26.5 1
3(2) .. .
. . .. .. .. . ... .. .. . .. .. .. .. . ... . .. .. . ... .. .. .. .. . . ... .. .. . ... .. .. . 19. 15
6 ..... '' " ' .... ' ........ ' " ' .... ' ........ .. ..... .. ' ........... ' "' ......... 19. 15
7 . . ... ' ' . ........... . ... . ... .. ........... ' . ....... ' ....... . ................ l9. 14
8.. . . . . .
. . .. . . .. . . .. . . .. .
. .. . ... .. .. . . ....... ... . .. .. .. .. . l9.37
l 8(2) . . . . ...... . . .. .. ... . . ...... . . ....... . . ...... . . ... . ... . ... . . ....... . .. . 19.25
9 . .. .. .. .. ... .. .. .. .. .. ... . ... .. .. .. . ... ... ...... .. .. .. ... . ... .. .. .. .. .. .. . 19.37
l5(2) . '' '" ' ............. ' " ' ... .. ........ .. .. ' .... ' ........... ' "' ' ""' .... 19.27
16(l) . . ' " . . ' ... . ...... .. " .............. . " ...... . .. . ' ... . ........ . . 19.27. 26.52
16(2) . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . .
. . . .... . . . ... .. 19.33, 26.52
l 8(2) . . . . ...... . . . ...... . . ...... . . ... . ... .. ....... . ... . ....... .. . . . . . 19.27. 26.52
19 ... . ... .. .. .. .. .. . ... ... .. .. .. .. .. . ... ... .. .. .. .. .. .. ... .. .. . 19.48, 19.49. 19.5 1
19(1 ) ....... ""' ........ ' .... ""' ........ ' .... ""' ' ....... ' .... ""' ........ 19.48
l 9(2) • .. ' .. . ... ' ' ....... . ' .. .. .. .. ... . ... . ' .. ' ... .. .. .. "' .... . ' .. . .. 19.48. 26.52
19(3) .. . . .. .. .. .. . .. ... . . . .. .. .. . . . .. ... . .. .. .. .. . . . . .... . . ... . . ... .. 19.48. 26.52
2.4 . ' . . .
I
•
• •
'
• •
•
'
•
•• •
'
'
• •
'
•
•• '
• •
•
'
•
• •
•
'
'
•
•
I
•
•• '
•
•• •
•
•
•
•
I
• •• '
•
• •
'
•
•• •
'
• •
•
·1able 24.2
25 .. ' .. .. .. .. .. ' . .. ' . •.. .. .. .. .. .. .. .. •.. .. .. .. .. .. •.. .. .. . •.. .. .. .. ... .. .. 26.53
30,' ........ ""' ' .. . ..... ""' ""' ' " ' ..... ""' .... ' .... ""' ""' ""' .... ' ... 26.54
3 1- 44 .' . ... . ... .. .. .. .. , .. .. .. .. .. ... .. .. .. ....... . ... . ....... . .... . ... . ... 26.54
lvi
of Treaties and Conventions
35 .....
... ...... . ...
41
....
53.....
. .. .... .. ....
54 ...... ... . ... . ........ . .. .. ... ...... ... ..... ... ..... .... .. .. . ... ...... .. .
26.54
26.54
26.55
26.SS
57 .. ... . ... ... . .. .. .. ....... . ... .. .. , . ... .. .. . ... ... . .. ... ... . . ... . .... . ... 26.55
58 .
.. .. 26.55
66- 70 .. . ...... . ......... . ..... ..... .. . ... . ............ . .. .... ... ....... . ... 26.56
71
.. . ...... ... ... .. . ...... ....... ... . ................................. 26.57
72 ....... .. . ............ . .. .. ... ...... ... ..... ... ..... .... ..... ... ...... .. . 26.58
74 ... .. . ............ .. .. . ................ .. ............... .. ........... . ... 26.58
82 .
.. .. 26.58
United Nations Convention on 1he Use of Elec1ronic Communicalions in
hlltrnntionnl Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 19. 14
Unil'--d Slates of 1\merica-Singaporc Free Trade Agreement 2003 .. . ,, .. , .. . , .. .. 26.8. 26. 19.
"" "" "" ' "" "" "" "" ' " ' ' "" "" " " ' "' ' "" "" " " "" ' 26.33. 26. 79, 26.82
Ch;ipter XV
26.79
.... 26.79
Art 15.4.1 ..
v
Vienna Convention on the l.aw of Trea1ies l 969 . .
Ivii
. 26.6
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PART I
Introduction to Business Law
Principles of Singapore Business law
Chapter 1
Business, Society and the Law
I.I
Introduction
1.2
What i s Law?
Law as Norff1 s
Positivisnt
Na1urnl Law
Posilivism an<l Natu.ral Law: The i\'t iddlc Road
Other Schools of TI1ought
1.3
1.4-1.5
1.6- 1.7
1.8- 1.9
1.1 0
1.1 1
1.1 2
1.13- 1. 17
1.18-1.19
1.20- 1.21
1.22
1.23
Ethics and Law
Ethics as Norms
The Differences between l,egal and Eth ical Norms
( 1) Authority and processes
(2) Scope of' application
(3) Sanctions
Legul Enforcemenl of Morality
PosiLivist Ll!w and Ethics
Relationship behveen La\v and Society
1.24
1.25
1.26- 1.35
1.36-1.38
1.39- 1.41
1.42- 1.44
1.45- 1.48
1.49- 1.50
I.SI
Society's Code of Conduct
Obedience lo Law$
INTRODUCTION
1.1
interactions and web of relations arnongst these various fields.
WHAT 1s
LAw?
funda1n(•ntnl question of the 1neaning of ""Jaw" invites numerous queries.
1.2
Within tl1e mirrow scope of this section. we can only hope to provide a
b rief sketch as 10 how one might approach the issue. What follows is a very
condensed sun1mary o f the n1ajor dttvdop1ncnts concerning the foundat ions
o f "law''. This is kno,•n as the study of jurisprudence, Lhc legal philosophy
or science of law. We hope thot it will serve as a precursor to a deeper
appreciatio n of the bases of law and its interactions with business and society.
Law as Norms
1.3
Factors Deten11ining Law- Society Linkages
Legal Structu res
1-egal Culmres
Legal Trndilions
Relationship between Lnw and Economic Development
Law and the Management of Risk
Law and Economic Development in Singapore
The law is an amalgam of theory and practice. Al " 1hcoretic.1I and
p hilosophical level, the meaning and found'1tion of "law" pose a weigh!)•
a nd perplexing question for philosophers, la\\-yers, judges and law academics
:'!like. Each of us is also keen!)' aware of the profound and pract ic;1I elfeels of
the law in our everyday lives. It is inextricably connected to the overlapping
don1ains of ethics. sociology and econon1ic developn1ent. a1nongst others.
Law is thus a "many-splcndourcd" thing th"t traverses several disciplines.
Th is brief chapter hopes lo elucidate "law" within the broader canvas of its
Let us begin with the rudiments. It is generally occepted Lhat "law" ls. al its
core, :1 set of nonns which prescribe a course of conduct These
state
what sl1011/d or ought 10 happen. In this regard, they may be distinguished
from the laws of natural science such as "water boils at 100 degrees Celsius•
which are amenable 10 factua l verificat ion. Legal norms. on the other ha11d,
cannol be either true or false. lnstead, they essentially prescribe wh3t ought
to be. l'or instance, "one ought not lo kill anoLher person" is a legal norm in
most. if not all. socielle.<.
Positivism
1.4
l·faving estnblished the b:lsic core of the "law" as a set of nonns, we can
explore the various jurisprudential approaches and per.pcetives. One school
of thought. known as positivist jurisprudence, treats the "law" as a set of
4
Chapttr L Busintss, So<itty and tht
uw
norms thal nrc
and 1mintaincd pursuant to some legal authorit)'
within a legal sy>tcm. "lhc legal posilivbt. John Austin {t790- 1859'), defined
"law" {in John Au<tm , 1/tc Provi11cr of Jumpn1de11ce Dctrrmirrrd (1954)) as
a set of coercive commands from a d<1cnnina1e person or bod1• of persons
(known as th< >overeign) which arc habitually obeyed by the population.
These coercive commands constitute a type of norms broadly defined. Hans
Ke1'en (t881 1973), another legal po>itivi>J, contended in 71rt Plfrc 1l1tory
of l11w (lranslatcd by Max Knight, 1967), thal the legal >)'Stem consisL< of
norms backed by sanctions which arc derived from or vnlidn1cd by higher
norms. 11,is leads us uhima1ely to the "ba>1c norm" (grrmdriarm) from which
we cannot den\'e an)' higher norm. 1 his basic norm, according to Kdsen.
1s selected on the basis of its efficacy w1thm the legal system as a whole
(ic, the people generally conform to the basic norm). In some jurisdtction$.
thi> basic norm may underlie the highc>l fow of Lhe land embodied in the
1espective written con:stilutions.
1.5
II LA Hart ( 1907- 1992), in his work Cotrrr/11 of Law (1961), argued for a
more soph1sllcateJ conception of a legal S)'Stem as a system of rule; Af'3J'I
from the "prim•ri•" rules which impo« duucs on the popul>11on (which art
quue similar to A11>ti111on coercive comm•nds), 1lart obsrrved th3L there are
also "secondary" rules witl>in a legal sys1cm that create, determine. eliminate
or modify the prinlllry rules. Examples or "primary" rules ore those found
in criminal law (>CC Chapter 4) and the l.1w of torts (sec Clrnptcrs 5 and
6). "Seconda1 y" rules include those wh1d1 stipulate the powers 3Jld duties
conferred on the 1..,g1slatur<, Executive and Judiciary (<cc Chapt<r 3) as
well as rules which f.icihtate the making of contracts (see Chapt<r> 7-9).
These "secondary" rules arc subdivided into three cntegories, n.1me))', rules
or adjudication (to conler power on officials to pass judgment and nnplcment
the rules), rules of change (to confer power to pass legislat ion to effccl
changes) and 1 ulcs of recognition (to
the criteria by which the
rules within the legol system arc ''ahdMed). Apart from the requirement
that the rule• of the legal •ystem must be generally obeyed by •IS private
CJlllens. these latter rules of recognition must be accepted by the officials
within 1he legal >yitem from an "mtern•I poinl of
Thi< "intrrnal
point or view" refer. to the critic•! rclkctive attitude of an uilici•I to
certain patterns of social behaviour as ll common standard. 1hc ollicial.
when he or she reflects 011 social bchtivlour, inquires whe1her on<· ough1 10
du (or omit) c<rtaon acts and the
rca>ons.
s
Natural Law
1.6
Another major jurisprudential school of thought is that of natural law. In
c:ontrast to positivis1n, natural lav.• juris11; take the view that
Jaws
Wllhin a legal system arc not necess;inl)'
bu1 that there are objecth'<
and higher >tanduds or criteria which must be fulfilled before nonn may
These standards or criteria are generally based on
be regarded .,
truths about human n.lture. ethics and rc;ason. Natural law juriiats have since
lime immemorial relied on the cxbtencc or a supernatural deity or God.
some human life purpose and its underlying reasons or cer1a111 sclf· e\•ident
truths. For example, John Finnis conlcnds in his seminal work Natural Law
n1rd Natural Riglus (1980) that natural law is the set of principles
on practical reawnableness in the ordering of human hfo and community.
•there are cerlain forms of .,,If.evident human good (ie, object> of value 10
h umans) such as life, knowledge. sociability, acslhcLic experience, religion
a nd praclical rea>onablencss, and l' h1nls •11ggcs1s that Lhe purpose of "lnw•
is to realise the con11non good of the hu1nun communlty.
1.7
Thus. whilst the po<111v1st would treat a leg•I norm as binding insofar as it is
cr<atod or mnde in a certain manner (for rxample, by Parhamont passing a
piece oflegislation). the natural low 1unst would
look towards certain
ethical standard; (usuall)' of general or un iversal application) to resolve the
is.ue. An oli· cltcd illuslrntion <>f lhe dlniculLies in subscribing to n pure
positivist stance concerns the status of the lows of the Naii Germany regime.
These Nazi laws may l>e consistem with pure pos11h1sm. but the n;itural law
1urist would a<k whether such Nazi ).,,•• ouglrt to be reg>rded a<
From
a natural l•w point of \1ew, some, if not all. may contend that the so-calleJ
Nazi laws 1•cre so oppress"'" and unfoir that they should not be rogarded 35
"l•w", even though they had been duly passed by Lhe relevanl nu1 horilics. Yet,
at the same time. the >O·called objective standards within a pure naturalist
t hcory may be vulne1able to cri1icisn" of vagueness and sub1ec1"'1ty.
Positivism and Natural law: The Middle Road
1.8
Some jurists have lhus tended lownrds a middle palh between pure positivism
Md naturalism. A few examples would •ullic<" here. Lon l'ullds ( t902- 1978)
"internnl mornlit)' of law" suggested that In order 10 qualify :1s n legal si•stem.
the .statutes inu'I 1o.ath.fy
proC'tduroi1 rcquiren1ents: the
ha\'e
lo br sufficiently genrral. made known to the public, pro)ptcti\'C in rtTrct,
6
Chapter 1: Busintss,
Principles of Singapore Business law
and tht Law
dear 3nd without eo11tradictio11s. capable of being complied with and so
The above examples represent only some of the possible approaehes and
on (see 'Tlie Morality of /,nw ( 1964)). Tiiese procedural requi re:ments. a.1
the reader would be awnre, go beyond the pure positivist position that
perspectives 1owards the exploration of "law" and legal systems. Nonetheless.
we hope it
a tlavou1· of the potem ial richness and complexity of
j urisprudence •nd legal philosophy which the reader might wish to delve
further into.
norrns are ''lnws" as long as they e.-naniue fro1n cornpetent aut hori1ies
within a legal system. Hart, in his Concept of Lnw, described a model
of the conditions that are sufficient and necessary for the existence of a
legal system. Indeed, he referred to this work as "an essay in descriptive
sociology''. Yet, at the same time. lian argued that, to prevent society from
descending into chaos, there should be a "minimum content" of n3tural law
based on certain hun1an facrs (such as hu1nan \1 ulnerubility. approximate
equaJity, Jimitcd ahruisnl) li111iled resources, ctc). According to Harl. there
is a nalural necessity for certain niininn 11n forms of protection for persons,
property and contracts.
1.9
In addition. Hart would concede that his system of rules is not all-embracing
since the scope of son1e rules n1ay be uncertriin. For ex-a1nple, the rule that
no "vehicle" may be brought into the p<lrk may be unclear as 10 whether
bicycles are disallowed as weU, ahhough the centra.1 core of the rule may
be clear. Ronald Dworkin, a renowned legal J>hilosopher, countered that
Hart had ovel'looked the significance of "principles" (such as " 110 man may
profit from his own wrong") as an important component of the legal S)'Slem.
Principles, he said, argue in a certain direction but do not necessarily lead to
a part icular legal outcome as compared to rules that arc applied in an "all-ornothing" fashion. These relatively more llexible and malleable principles can.
arguably, :iccommodute nah1rul law precepts, although Dworkin appeared to
suggest that there is one right answer to an)' particular 1egal problem (see,
eg. Dworkin's Lnivs F.'11pire (1986)).
I.I I
We have ment ioned above that "law" is a set of norms that prescribe a
course of conduc1 and that the norm "one ought not to kill another person"
is one example of a legal norm. ll1e reader rnay legitimately ask: is not the
uorrn against killing also an ethicnl norm! As a starting point, we note that
and "law'' are si1nilar in at least one respec1, th:-ic is. ihey ::ire both
nonus prescribing a certain course of conduct. Within the lega.J context,
these legal norms may be referred to as "rules", "principles·: "guidelines"
a11d other similar terms. For instance, a rule that companies are required
lo register with the relevant authorities prio r to con1n1encing business is
a legal "norm''. Similarly, within the eUiical sphere, we may also refer to
ethic;il norms as ''rules': "principles" or "guidelines·: For example, the rule
o r principle thal one oughl not to lie is a.111 ethk:.il norn1. In relation to
"form", I.here docs not appear to be t>ny sig,,ificant difference between the
discipli nes of et hics and law.
The Differences between Legal and Ethical Norms
1.1 2
But are there not n1atcrial
us exami11e this
why" variety:
Other Schools of Thought
l.10
ETHICS AND LAW
Ethics as Norm s
Apart fro1n the abovt-, there arc nun1erous other jurisprudential approaches
which must be mentioned (if only in pa&<ing) such as American Realism
which focuses on the use of cmpiricil focts •nd law to make predictions as
to how court.s will decide, the Law mui f;c0110111ks approach which is based
on the economic efliciency of outcomes, the C-0rrective versus Oistri/1111/vc
justice approaches to particular areas of law such as torts, •mJ the approaches
embodied in Sorlologirnl /11risJ1r11de11ce and Sociology of law 1·elating to the
interactions between Law and society.
7
o
o
between legal und ethical nornis? Let
by reference to questions of the "what. who. how and
Who or which body creates or authorises an e1hical or legal norm {"the
authority")?
How are ethical and legal norJns
1naint::tined or modified ("the
processes")!
o
To whom arc ethical and legal norms appl:ied ("the scope of application")?
o
WIH1t :n·e the respective sanctions for a breach of ethical ,md ltgal norms
("the sanc1ions")?
8
Chap1'r 1: Busints,s. Sot'itty and 1ht Law
Princ1plts of Singapott Busintss law
(1} Authority and processes
1.13
standard for e1•errone else, and that one should resperi human beings <U
ends in lhrrnselves, ralhtr 1hon only as a means 10 one's end. For ins1onct,
slovery ough1 to be obolishcd since no raiional person would demo 10 be a
s lave or 10 be trea1cd as one: in addition, 10 1rea1 another human b<mg as
a slave is 10 1rea1 him or h<r ns n means only. These are merely ex'1mples of
t he many 1heories and modes of e1hical reasoning.
Let us diS<uss questions rela11ng 10 "au1honcy" and "proce.sses" 1oge1her.
Assume lh•t "legal norms" arc posi1ivis1 in nature. rrom the perspective
or 1hc legal pos11ivis1. 1hc relev•nl au1hori1ics wi1hm a leg•I sys1em are 1he
lcg•I il»titullons, bodies or
within n par1icubr 1urisdic1ion 1hat are
conferred specific lcg"I powers. For example, 1hc Lcgisl.llur< is empowered
lo pass legislalion in Parliament which p ro hibits an1i-compe1itive
agreements in Singapore. Tiie Execu1 ive may be cnthled 10 issue m inisterial
regulat ions. 'lhe judge is e1npowercd co pass JUdgmenc an a cour l roon1 on
lhe npproprmle con1pensa1ion to a victiln of a road accident. Hence. we can
1. 16
••Y that the norm> created b)• the rdcvant •uLhoritiC• via the acccp1ed legal
constitute the set of "legal norms" within the parametrrs of the
legal
1.14
SY""'"
a Se! or precep!S opplicablt IO a particular jurisdiClion by constn>US. 1ne
potential diversi1y g1vts
With rc•pect to ethical norms, howevrr, the delermmation or the authority
and proce>s« is more controversial. The moral .c1or may deter mine for
intu itive or lnrgely experiential, such as saving one's baby from 1hreatened
d11ngcr. 'I he moral actor may, allernativcly. choose to look !owards ethical
reasoni nij for guidJnce and direct ion when he
a 1norc
1.1 7
intractable
d llcm mn. Since lime immemorial, philosophers such os Ari>1otle. lmmanuel
Kanl, Confucius, Joh n Siuarl Mill '1nd o thers have pondered over 1hesc
ethical issu<> and endeavoured to construct and develop theones and
framework' lo de1ern11nc how one <hould conduc1
and ralional manner.
in a consistcnr
1hen 1hc ocrion •hould be undertaken. lns1cad of the model of u1iliunamsm,
o ne may find a <lislribu!ivc justice model more pcr>11asivc. A proponcnl or
the dlstrlbu1ive juslice model may argue, for lnsionce, 1hat 1hc needy in
society >hould obraln propo1·1ionately more o f the bt•ncfi1s than the wealthy.
Ahcrmuivcly. one might rely on Kantfon ethical imperat ives that one ought
to net •tecordi ng 10 a rule of conducl thot one would will to be 1he universal
9
furr her. there 1> no generally .icccpted process by which ethical norms
a re created, maint•uned or mod ified. ' Ilic creation and cvolutioi1
ethicol
11orms arc likel)• 10 lake pince in a more diffuse and indeterminate manner.
"Jhcrc is an absence of formal proccssc• for the crcalion, maintenance and
rnodificatio11 or ethical Mondards and \'alucs.
or
( 2) Scope of applicalion
1.18
Mill'> gener•I 1heory or utili1ariamsm, for 111>1ance, ad,'OCaled tha1 one
>hould acl lo the cxlcnl 1ha1 doing so promoics general happiness. Thal is. ir
1he pleasure or benefits accruing from an aciion outwC1ghs lhe pain or costs,
to rehuavdy greater uncer1:a1nl)' conctm1ng
the accep1oncc and legiumacy or tthical norms ..ithin a >oe1tl)'• when
compared 10 legal posi1lvh1 norms which may be more easily "loca1td"
wilhin !he posi1ivis1 legal
himsdr the appropriate course or conduc1 when faced with a particular
problem. Somelimes, the appropriote ethical re•pon>r may be obvious,
I.IS
Essentially, 1hc discipline of ethics is a search for underlying objw ivc
s tandards and reasoning for tuking. or no! taking, " parliculal" course
o r aciio n or conducl in any given •ituation. As can be seen. there Is
pOICnlially, a greal diversity or ethical theories, Outlook.' and judgmcnU
on any issue. It may be dilficull lo accommodal• these diverse (and
sometimes contradiclory) "ethic.I" lhtones, oullooks and judgmen1> wi1hin
In lerms of 1he •scope or
c!lucal norms may be or general
(or universal) or >pccific application. lthiul norms. such as 1he Kanrian
ethical imperolivc> mcnuoncd above, arc of universal applica11on. l:.thical
norm.s may also "ddrcss >pccifacJUy the oblisalions and nghl> or person< in
specific capacille< or role>. such os the employee> or direclors or a company
i.n relation 10 business c1hics. Legal norm>. similarly, ha\-c both general •111J
• pedfic application. Mos! o l the prov1S1ons slipul"'ing cruninal offence•
(such a• murder nnd cheating) 11orn1'illy apply to all persons within 1hc
j u risdiction. and do 1101 USUOJly >inglc OUI J>Ol"licular lypes or groups or
persons for separa1e trea1ment. In roc1, to do so might invhe accu,Mlon< or
u11faimess and di>crhnl natlon. ' l11crc arc also legal norms (as In company
10
Chapter 1: Busintss,
Principles of Singapore Business law
and tht Law
hlw) that specifically aiddress the duties of a director of 3 company. simibr to
an injunetion from c3rrying out partieular aets. 1he extent by whieh legal
ethie al norn1s.
sanctions arr enforced in a particular case 1nay vary fron1 jurisdictio n to
jurisdiction.
1.19
The material difference bel'"een et hical and legal norms in terms of the
"scope of application" is that legal norms. due to the historical devclopmem
of sovereign states. tend to emphasise their "territorial"
or
jurisdiction, unlike ethical norms. ·me domestic laws of one country apply
generally to its citize1is or to activities underl"ken within its territorial
boundaries and may differ quite significantly from the laws of another
(fo re ign) country. 'fucsc divergences in the respective domestic laws c.an
create inconvenience
worse, chaos especially in 1r:111snatio11al affairs
and transactions. Thus, countries attempt Lo .seek) where possible. the
harinonisalion of these disparate laws in this increasingly globaliscd world
we live in. Public international Jnw is the sel of Jnws which governs and
regulates the rebtionships between sovereign states and the international
1egal ,i:yste1n (eg. an :i ntern<ltional convention regulating the interprelation
1.21
O n the other llllnd, the sancLions for a breach or an ethical norm arc usually
more informal compared to legal sanctions. These may include the social
disapproval of an act ion or reprisals from other persons. For instance, lying
to frie nds might invite soda! disapproval fro1n one's peers but only so1nc
forms of lying. such as cheating offences <Uld misrepresentations which
induce nnolher to enter i11to a contract, attract legal sanctions.
Legil!
1.22
and effects of treaties signed by states). Private international law. on
the other hand, deals with cases involving foreign elements such as
issues relating 10 the applicable governing law in Intcrnet defamation or
transborder litigation. Not surprisingly, natural law has played a signi.ficanl
role in the inlcrmltio nal legal system in the search for universal objectiw
sttu1dards applicable to all, such <1s the development of human rights.
ll is generally less common for one to speak of ethical norms <1S having
s pecific "terrilorinl
though we arc aware that h istorical and
cultural factors have al tin1es been e1nployed in atte1npls 10 "differentialc"'
o ne value syste111 fro1n another 3 la lhc ..Asian versus \Vester n values"
debate of the 1990s.
of MQrill!ty
A rdat<•d question arises: should all morality be enforced by the law? Mill
a rgued. in 011 Liberty (1859), that legal enforcemenl should be undertaken
o nly for the purpose of preventing harm to others. The UK Wolfenden
Report on Prostitution and llomoscxuality (1957) ("the Report") staled that
there is a realm of private life which should not be subject to legal comrol
a nd enforcement. 111is subsequent!)• led to the now famous Devlin-Harl
debate. Lord Devlin disagreed with the Repo rt and countered that the law's
function is 10 maintrun public mo111lity, wl1ich constitutes rui important
aspect of human society. He argued that conduct provoking feelings or
"inlokrancc, indignation and disgust" should be suppressed by the law, lest
the fabric of the socict)• crumbles as a consequence. Hart. 0 11 the otlier hand,
doubted the broad connections drnwn by Devlin and cautioned against
unduly curtailing freedoms in the name of public morality, though Jlarl
conceded that !here should be some core shared lllorality in any society.
s uch as the prohibition of murder.
(3) Sanctions
1.20
Legal sanctions are normally specific and formal. The main sanctions
Positivist Law and Ethics
under crhnina1 law arc capital
1.23
in1prison1nent. fines and other
penalties. In civil law, the main sanction is the obligation of the person
who commits the civil wro1ig to compensate the ot her parl)' for losses or
damage. For example. the party who breaches a contractual obligation may
be required to compensate the other pnrty for the lnucr's loss oi profit;
resulting from the breach. Ot her legal sanctions may include Llte specific
performance or the legal obligat ion or the perpetrator may be rest rained via
11
\\le can now exan1ine) in a J:>Cncral fashion, the relationship bel\..·een positivist
law and elhics. In modern societ ies, ethical and positivist lega.i norms would
c;werlap partially. Indeed, some moral norms, such ;is the concept or equity
a nd foirness, are embedded in positivist kgal norms, thoush the scope and
manner of applicotlon may vary. Outside lhis overlapping area, the legal
norins •tre distinct fron1 ethical norn,s. 1be reasons why 1hese norn1s do not
correspond perfectly may lie in the difficuky or translating certain moral
11orms into positivist law. the conscious decision to leave certain conduct to
12
Chap1'r 1: Busints,s. Sot'itty and 1ht Law
indtv1dual moral rnnscience, or that
law has not kepi pace with the
de"elopment of ethical nonns within the soci<ty. ·1here could al$0 be othu
pr.c11cal reasons (such as limited parliamentary tune and resources).
RElATIONSHIP BETWEEN
l.Aw
Princ1plts of Singapott Busintss law
Factors Determining Law- Society linkages
1.26
f 1w is darit)' and knowledge of the law. Ate the laws in question clear or
ambiguous? 1r the l•ws nre 2mb1guous on the expected bcha,four, thtn non
compliance could result because road u.crs might be unaw•re th•t lh<y ore
committing traffic viola1ions. I r so, the legislation can and should be llmended
to remove 1he ambiguity and to make clear ! he scope of 1he law. Secondly,
n re t he traffic laws and sonclions for violatio ns widely k nown by the ro.1d
users? How accessible nrc the laws? While ignorance of 1he law h 110 excuse,
ii is cssentiDI 1hnt non-compliance is no1 due to road users' ignorance or
the applicable laws. 1r so, maklng the l•ws accessible and embarking on an
educational and publicity drive might be neces5'lt)'·
1.27
&rand is the concepl of deterrrncc. 1he current laws moy not hn't the
r«1uisi1e dct<rrent cffec1. '!he intuitive regulatory
to a •ituallon of
(traffic) "lawlessness" " 10 mcrea>e the legal sanctions or pumshmen1. More
ANO S OCIETY
Society's Code of Conduct
1.24
H is a u·uis1n that no society can func1 lon whhout n
of rul es, norJns
and value. (we shall refer to 1hem collectively as "code of conduct"). 1bis
code or conduct need 1101 alwai•s be enshrined as law for II 10 be observed and
effective. Ahhough commonly used. laws are not the onl)' means by which
desirable and desired
of indh•1duals, businesses, governments
and other orga111sations can be encouraged Consider, for a moment, how
families and <thnic business ne1works rcgula1e their conduc1 vrs-ii· 1•is famil)'
members
other businessmen. In these social and economic groupings,
1here ii hlllc use of the formal proctsses of law Informal rule. govern.
Even though lh<y do not have the force of l>w (und<r<iood l)'pically as
laws found m Slatute books), they can help 10 regulate beh•viour towards
desired ends.
severe disincentive' \\'Ould act QS ·slicks... discouraging would·bt \liolators.
This would be relevant in cases where the punishment is too light 10 >erve as
a serious deterrent. Howevrr, •s studies have shown. there 1< an up1>rr hnut
to deterrence. Even with punitive sanctions., hard core or irrational
wiU not be deterred by >anctions that other law-abiding and rntional road
users 01herwisc would.
Obedience to Laws
1.25
W hal h l11h11t makes people obey laws (formal and non-formal) and how can
1.28
It should come as no surprhe t hat there h a regulatory p1•rumid wi1h a range
of
from dmt rent
10
for
the diffemn
we enhance complian<e? People obey lhe low for
reasml>, including
obedience 10 a legicim3te authority, abiding by their per•onal convictions
and the fear or uncllons imposed by 1hc la.v for non compliance. Th< law,
understood h<rc as l<'gislation passed b)• • compctenl ksulature, does nol
Offer J OnC•>1le-fit>·alJ .olullon 10 the l$SUh •nd problems faced by any
society. Oft<n, th< law s<ts the m1n1mum .tand.rd of bcha\'1our <xp<eted
•s well "' provides o .et of sanctions if the law i• breached. Let us tal<e the
man.1gcmenl of road traffic in citi<s a. an example. Lows can be passed to
prevenl iraflic violations such as illegal parking and drink·dnving. and to
n1trn•gc the \'Olu me o f traffic entering 1he city area durlni; certain designated
periods. I low do people and businessc> react to the traffic h1w regomc? How
do 1hc law c11forccmen1 ngencies respond 10 1he road users' behaviour on
problem, sc,·ere pum>hmcnh rangini; from suspension and revocation of
driving licences 10 iail terim, refl<et the level of moral culpab1l11y of
Violators and societ)'°s •bhorrenu of such conduct. Also. there 1s a nocd
for proportionality in 1ho unct1ons meted out Legal sanction; that arc
excessively harsh nught affect th< legi1rn1acy of the laws. l.aw enforcers
may then be reluc1ont to cnforc< thcm, resuhmg m the uncuoM bt1ng
paradorically u ndt-ruscd. llcncc, 11 i> critic-al for the legal >ystcm to be
sensitive lo t he dynamic interaction; between t he law and the ndap1ivc
s lrulcgies of 1hosc 1hnt the law in q uestion seeks to reg11la1e. This would
e nable the authorities to belier CJllbr•lC tlU" effective zones or clctcrrcncc.
the road;? What follows is an outline of some factors 1hut can determine
lhc u1illt)' of law> in fos tering desired bclm•iour and the intimate linkages
exan1ple. lower insurance pre1nlun1s, for rnotorists who obey the laws and
bc1ween lnw nnd soc1e1y.
13
types of Lraffic viohuions. For Jn,1.ince. a.s dnnk·driv1ng as a very serious
1\no1hcr complcmc11rn1y appronch is to provide incentives or "carrots".
hove good driving records.
for
Chapter 1: Busintss,
l.29
l.30
Principles of Singapore Business law
and tht Law
111il'd is the Meed for consistelll and fair enforeement of the law. A welldrafled set of laws clearly sets out the expected minimum behaviour. Such
laws require effective and impartial ellforcement to achieve their desired
effect. Non-compliance may well be an is.<ue of enforcement (especially 1he
lack of il). Weak and ineffectual enforcement of traffic laws l ranslalc into
road users' perceplioms that they can get away with their violations. Studies
have shown that the extent of a proscribed activity (in this case, traffic
violations) is negatively correlated to the perceived certainly of punishment.
TI1erefore. there will be fewer violations when road users perceive •Or beliew
that active enfor(crnent in place resulting in
being rnore likely 10
be caught.
l.32
peer pressure can complement the formal legal framework. Such infotmal
controls ate potentially a more effective mode of enhancing compliance. In
a weak legal environ1ncnt, particularly, social nunns and inforn1al sanctions
can have the desired regulatory effect in preventing opportunistic
Where fonnal laws are in align1nent with con1rnunity standards of appropriate
behaviour, the fear of external non-kgal sanctions and social disapproval has
a significant regulatory and conforming effect.
1.33
An appcaJ to Qnc's own n1oral co1n rnitn1c nl to obey laws can also engender
strong compliance effects. As laws catlllot compel compliance, the objective
Enforcement can nlso be aided through the use of technolog)'. such as
of internal compliance is to socialise rMd users through the internalisation
closed circuit TVs. and giving the police Jnore c nfo rceincnt powers such as
o f Lhc desired norms and an appreciation of Lhe public good that the trallic
Iaws seek to uphold and promote. lnfonnal sanctions arc likeli• then to be
requiring mandatoq• b lood tests or breath analysis of suspected drink-drivers.
The intent is to demonstrate that there is a commitment to the enforcement
or traffic Jaws, wilh i ncreased .surveillance being fodlitatcd by tcchno1og:y.
This must be supported by effeclive and efficient law enforcement, otherwise
violations would resurne once the lnckadnisical co1nn1itn1ent and effor1s
1nore effective in de:iling \vi1h 1ninor 1ransgre..ssions, such as not tC>ming to a
co1n µlele stop at sto p signs.
1.34
Given the practical limits to policing and prosecution , such an in1ernally
towards enforcenu:nt are noliced. In so1ne .societies, there 1nay also be a
driven 1nodc of con1pliance could be far n1orl' e ffective. Even for n1ore
problem or corruptiol\ where violators get away with their offences by bribing
lnw enforcement officers. If so, then efforts would also have to be directed
serious violations. social norms - in addition to formal, legal sanctions can raise compliance levels through the social stigma and shome allnched
to such illegal and socially (and morally) repugnant conduct. For instance,
drink-driving can be targeted through demonstrating the moral callousness
a nd culpability trnd the negati\'c repercussions of such an act. Here. moral
towards curbing the corrupt praclices o f the law enforceJnent offic.ers.
l.31
Fifil1, as legislative fiats cannot be completely etfeetive in ineukating desired
legal nonns, info nnal and dtctntra1ised sanctions such as social norn1s and
Po111'1/i, the legal syslem has to manoge perceptions. In deciding whether
to obey a law, a per.son's perceptions on tlie likelihood of his transgression
s uasion provides an additional layer of deterrence and in forn1al sanct ions on
violators.
being caught would matter. While med ia blitzes and intensive enforcement
crackdowns would result In •deterrence effectiveness'; success is often
lc1nporary unless the enforce1ncnt efforts are sustained. Furt hennore, if
keen enforcement is accompanied by publicity campaigns and blitzes, the
perception of the like lihood of punishment is likely to be positiwe for law
enforcen1enl efforts as public consciousness of the law and
enforccn1l'nt is
raised ("the sermon elfcct"). However. such etfotts will sec declining util ity if
1hcy are accompanied by poor or in,1dequate enforcement. as was discussed
earlier. Using traffic Iaw :is an exan1ple, the re is the need ror such
to
have regulatory credibility and their acceptance as a legitimate source of
regulotoq• authority. "111is requires I hat the fows are - and are seen to be just :ind for the coin1non good (public safety considerotions) as well ns their
being applied fairly without undue harshness or laxity.
15
1.35
'lhe above example of n1anaging traffic issue.s demonstrates that low is not
a lways a panacea for the muhifocetcd societal problems. Indeed. there is a
patent need lo cCJnsider bw in its sodetnl context. What would be apparent is
that no legal system is fully autonomous in that it is completely independent
o f the society in which it operates. While law matters immensely in a legal
system. such a syslem cannot be effective if it ignores considerat ions such
as ethics and pressure fron1 interest groups serving busines.sj civil society
a nd economic interests. These social forces operating outside of tbe legal
system provide• better understanding of the intel'l'ace and interaction o( law,
society and
rest of this section looks at con11non txplan3tory
concepts used. namely. legal structures, culture (including legal culture) a.nd
16
Chapter 1: Busintss,
Principles of Singapore Business law
and tht Law
legal lfaditions. in helping us to lmter understa11d the relationship
However. there are also structural foetofs that reinforee these cultural
law and society.
inhibitio ns lO litigation, including inst itutio nal
Legal Structures
1.36
A legal system's structure c<in be regarded as its "hardware': Legal s tructures
are the compo.sit.e units that do the work of legal systems and include
legal actors, for t'Xample, lawyers. legislators, police, judges, legal. scholars.
etc (I H Merryman. "On rhe Convergence (and Divergence) of the Civil
Law and the Common Law• ( l 9RI) 17 Stn11ford Journal of /11temnt io11nl Lnw
357). ·n1c structure determines the patterns and framework of proe<sses.
actions and outcomes of the legal system. Rlankenburg's innovative
comparative socio·le,gal studies of the then West Germany and the
Netherlands, two cou.nt.rics silnilar in socio·ccono1nic tcrins and attitudinal
cultures, demonstrate how the legal infrastnicture can create inceiit ives
and disincentives for the use of the formal legal system {E Blo11kenburg,
"'t he Infrastructure for Avoiding Civil Litigation: Comparing Cultures of
Legal Behaviour in the Netherlands and West Germany" ( 1994) 28 U.111
nm/ Socicl)' Review 789). Usage of the court system is effected through
the inculcation of either a litigation-avoiding {Dutch) or a litigat;on·prone
(West German) min.dset. The Dutch "infrastructure of avoidance" has
a iding in, and in turn supported
l.37
by. the successful tr11nsn1ission of a mythic
aspect of Japanese legal culture!
t.38
"filtering institutions)• in t.he fornl of 1nore alternatives, such as pre·court
conllicl institutions, many forms of legal consultation beyond tine formal
legal system. the "routinising'' of issues such as traffic cases to displace
1he1n fron1 1he court calendars, and "dejudicialisntion.. in w·hich social
institutions rntht'r th an the courts regulate private contl ict. 1lic Gern1t\n
system, on the other hand. draws conflicts into the courts by discouraging
alternative dispute resolution and by consciously keeping the court s effective
(cllicicnl and inexpensive), creating little incentiv<' for disputar.ts not to
use them.
such as
delays in the court si•stem, the lack of lawyers, the courts' limited ability
to enforce their decisions and provide adequate relief. affecting access to
j us tice. Consequently, the widely held belief, inside and outside Japan, is
that the Japanese arc a non-litigious people. Thus, we have a legal structure
While legal systems can be fruitfully studied by examining formal processes,
much can be gained from a study of informal systems of regulation,
e nforcement and social norms. Such al!ernative structures tend to occur
in places where the legal infrastructure is n<>t well developed. Here, "moral
co1n n1unilics" develop with their parlicularistic networks of insiders (uslmHy
killsmen) and in-built compliance mechnllisms centred on trust. Macaulay's
classical study of the use of non-contractual relations in American business
is an excellent case in point. where infonnal reguhuory mcchanis1ns e ither
lower t.ransaction costs or provide additional informal governance structures
to reduce opportunistic behaviour (S Macaulay, "Non-Contractual Relations
in Business: A Preliminary Study" ( 1963) 28 America11 Sociologirnl Review
55). However. one should not ignore prejudices. cultural preferences. bias
and 1he hnportancc of dosed fa1nily networks tOr bu$iness transactions in
the structuring of these mcchanisn1s. 'Jhcre is a
nexus bccwcen formal
and informal controls. The former is likely to supplement, and perhaps
substitute for. the latter when inform;1l controls bec(lme inadequale.
Legal Cultures
the Dutch legal actors' attitudes. values and beliefs towards llhernative
modes of dispute resolution. This interaction is demonstrated in Ht1ley's
Legal culture refers lo Lhe "historically conditioned. deeply rooted altitudes
about tlie nature of law and about the proper structure and operation of
a legal system that are ;1t large m the society" (J H Merryman, "On the
Convergence (and Divergence) of the Civil Law and the Common Law"
{1981) 17 Sta11ford /011runl of /11tcr1111tio11al Lmv 357, at 381). It is the "iMas,
values, nttitudes, ;md opinions people hold, with regard to hiw and the leg:il
classical study of the ""reJuclant Japanesr litigant" n1yth
he shows lhal
systen1" and forn1s the basis for the creaLion and sustenance of legnl nonns
there arc cultural at11·ibu1cs in Japtu1cse S<>cial organisation and values sh:.11r1e, co1nn1uni1ariain consciousness ::tnd (enr of corn rnunity ostracisalion
- thllt mnke the JapM1esc rellll ivcly litigation-averse (J 0 Haley, "l'hc Myth
of the Rclucuu1t Litigant" ( 1973) 4 /011runl of Jnpn11ese S111rli<'S 359).
which either promote inertia or change in the legal S)'>tcm nnd legal actors
(L M Friedman. "ls 'l'hcrc n Modern Legal Culture?" (1994) 7 Ratio Juris
117). 'l ho internal leb'lll cuhur< of lcgnl actors, such as lawyers and judges.
i.mpuct upon the legal system as well. Lnwycr> arc both transmission (Ind
The legal s tructure intc1'3cts intilnately with the legal culture to condition
17
1.39
18
Pnnc1plts ot S1n9;iport Business Law
Chapter 1. 8usintS$, So.citty and tht law
Speelator Sports" (l 987) 21 L.nw n11d Sodtr)' Rmew 185). These alternative,
particularistic and anecdotal representations of law and th• legal >i·•tem
affect people's understandmg and de.ervc clc>ser scruuny. These pcrcepuons
and assumplions of 1he lrgal sy.tem constilute the external leg•l cuhure
and influence the users' perceptions of the lrgal sys1em's legitinMcy and
relevance. ln turn. thb atlecls how they interact with the legal system and
t·he legal actors.
tran1form3tion agents and the)' can alfoct how clients
the law (the
cxtrrnal legal cuhur<). lltne<, the management of the lcg•I actors' deeply
rooted and firmly held anitudes m many soc1e11e• 1s 11npor1an1 1n belpmg
lo cnlrench 1he norins desired. This is well demonmaltd in Ab<!'s study of
ll1e Japanese judiciary's inttrnal con1rol mechanism in the ;ekction. training
and pro11101ion of legal perso1Ulel resuhing in the
of the
judicfary:.. internal legal culture, ensuring a perpetuation and
of norn1s (M Abe, "" lhc Internal Control of a ll11rcaucrn1ic Judiciary: 'Jbc
Case of Jnpnn" (199S) 23 luternntio1wl /011n111/ of 1/1r Sorlology of Low 303).
·n1mugh a careful process of central control, !he legal personnel are
and
norn1s arc: 1naintainrd um.I i.ustaincd in an cnvironmenl whrrr
organisational au1onomy is critical amidst antagoni>tic polilu:al forces.
1.40
1.41
Ahhough kgal cuhure is malleable, it i• .!ow to change. Traruilion economies
111 the former communist bloc countne> often have 10 dNI wuh the lack
of a cuhure of legality and legal con.mousn«s among the legal s)'S!•m's
actors and users. BccauS(' it is perceivc-d to br an uutrumcnt of thr state.
po>t-Soviel Ru,.ia's legal system lacks legitimacy. fail< to msp1re confidence
and i< not depended upon for organising economic relations (K Hendley,
"L(•gal Devclopmcn1 in Post-Soviet Ru»ia (1997) 13 l'ost So1•.cl Affnfrs
228). Markovils' sensitive treatment or the then lfast Ge1·man legal system
highlights how 1he internal legal cuhurc (nnd >tl'llm1rc) inRucnces 1he
Judlciury's view of their role (l Markovil>. "Ln•I Days" ( 1992) 80 Cnlifomill
L;1w Review 55). They resolved social crhes rather than adjudicated on
individual rights. The courts functioned ns a "$Choolhou<e" to proied
public order, which might seem alien lo another legal tradilion. Contrary
to popular pcrccp11011s. East German courts were not bngaroo courts,
espcci•lly in non-political cases. The outcom« ori<mg from their resolution
of legal disputes may ha•·e differed but they rrRected a different ideological
>)'>lem and it; particularistic systemic ob1ec11ves In >OC13h>t legal S)'Stems.
law 1< ofien u<ed by 1he communist party ., an m<trument of control and
to improve go•·ernance. These 1wo objeclives art not regarded as mu1ually
exclusive: in (act, 1hey are seen as being complcmcnmy.
Social change impact• upon the legal cuhure, lnllucncins change< in 1he
legal system, For insrnnce, given the pervasive and i11 ilucntial role of the
111cdin, Macaulay polgna111ly shows the imtiges law In everyday American
hfc 1hal the education system and the mass media porlroy (S Macaulay,
"lrnagc> of Lnw in Everyday Life: The Lessons or School, h11tertai11me111, and
or
19
Legal Tra d itions
1.42
Legal traditions. such as the common law, civil law, socialist. Islamic and
Talmudic. originate from ditrercnl sources and influences. They contribute
to the persistence or di.tmcuve styles or legal though• and practice m •
legal syotem. 111U>, legal sy>ten». including legal traruplonb. from thr ••me
legal tradition exh1b11 common characteristics in the legal processc• >nd
opcranons of 1he legal sy.tem. l.tgal cuhure and legal tradition collecll\1'1)'
constitu1c the ".oftwarc" of a legal >)'>l<m. Jt is this "softw•r<" that helps
explain why countries with >imil3r socio-poli1ical ideal> and legal traditions
lll3f appro;;ich sin1ilar issues such a10 crin1e- and puni.shrncnt, defam:uion
nnd privacy
in \'cry different ways (.s« J Q Whitman. "Enforcing
Civility and Respect: 11ircc Societies" (2000) 109 Yale law /01mwl 1270; and
J Q Whilman, l·ltmli Justice: Crimuwl Pwusl1111eut and tlie Widening Divide
between Amerie<1 rmrl H11rop<· (2003)).
1.43
In a similar vein, ahhough Smgapore, the US and the UK share a common
legal tradition, their contra•ling approaches in dealing with defamation of
public figures retlect deeper pohucal values and different legal and lmtoncal
de.-elc>pments leading to a varicgaitd understandmg of freedom of expression,
journalistic freedom and cuhure, and the public interest. Even then. legal
tradition alone has Inadequate explanatory power. Structural d•fference.
and particularistic developmeni• m thr pol11 ico·econon11c and bureaucratlC
sys1ems in different socictie> can provide a nuanced understanding of wh)•
$OC1cties wilh similar legal 1rnd111011> di\'crge rather than con"erge m d1fferei11
racets of societal life.
Legal cultu1·c. structure and 1rudl1io11s are nol <lnly of lhcorcl1cal lnlcresl: lhC)'
enable us to hlwe • holbtk under>1a11ding of how the legal system acluolly
works. Euch conccpl. on il> own, lacks 1he nuanced explanatol'y power for
the dltTcrential evolution and development of legal ;y;1en1>. "lhe mutual
20
Chapter 1: Busintss,
Principles of Singapore Business law
and tht Law
interaetions among culture, m ueture and traditions affeet the development
legitimate legal system, the management of risk also requires
of Lhe legal system and vice versa. Legal structures develop from legal
cultures and traditions and, iJ1 tllrn, they help mould the evolutio n of legal
culture and tradition. 11ms, notwithstanding the apparent tendency towards
Lhe convergence of legal systems globally, legal pluralism remains a persistent
reality in today's globalised world.
a nd innovations in social and politic.al structures. All these work together to
provide a property rights regime that inspire$ confidence. A property rights
RELATIONSHIP BETWEEN
LAW
AND ECONOMIC D EVELOPMENT
Law and the Management of Risk
t.45
lhe rule of law and the legal system provide a necessary but insufficient
condition for good governance. Simply put, the rule of law means and requires
that everyone, including the government, is subject ro the law. There is a
vast literature on the relationship between law and economic development.
and this sect ion can only touch on son1e of the key ideas: o n Lhe rolt> of
law in economic development. A distinction should be dr"'"" ber,.•een "risk"
and "uncertainty". 1.-aw and institutions, if properly applied, help t<I manage
risk and reduce uncerLainty. To political econon1ists, "risk" (when q uantified,
regin1e is, in e.s.,;;ence, o ne that respects ownership rights and the nbility lo
deal with that property (whether real or personal). Such a regime recognises
the individual's right to property and the
protection of such a
right.
1.47
This connection of risk to property rights assumes that individllals and
businesses have information for which they can then make appropriate
decisions. In reality, infonn:Hion asym111ctry -
LO ensure
lhat asymnl<.' tric inforn1at.ion is nol widespread or is 1ninimised.
With risk abl)• managed, capital can then be applied productively; otherwise,
capital will be used speculat ively which may benefit individuals and
o rganisations in Lhc short ter111 bul will
threats nnd insecurities, with Lhe pro1nise of com1nt>nsurate returns fro1n
environ1nent. Where "uncertainly" prevails. the proper allocatio n of risk
and Lhe expectotion of returns on investment become more pro blematic.
No investor or individual is prepared or incent ivised to put their money in
business venturt>s, bat'lk dt>posit.s,
1.46
in such an econon1ic environ:n1enL
On the other hand, if uncertainty rather than risk prevails. individuals and
business entities will not be willing to pool their re.sources together (that
h, lo share the rhk) to invest
in
larger
C.(01101nic
activity outside of tJ1eir
parochial confines of family and closed commu nities. llut it is this 11ooling
of rescrnrces over a longer time hori7.on t h31 makes economic progress
Box 1.1
Should the right to property be o constitutional right?
The right 10 property has been considered as part or man's natural rights and on
par with the right to life and liberty. Many constitutions, such as the American
and Malaysian, provide for the constitutional righl to property. However, the
SingaJ"Ore Constitution does not provide ror such a conslltutlonal right to property.
The approach has been a communitarian one In which the rigid adherence 10
property rights is seen as being detriment.at to ec.onom1c. developmenl in land-scarce
The larger public good Is to be prelcrred over lhe Individual interest.
This utilitarian approach Is also evident In that, under Singapore's Land
Acquisition Act (Cap 152, 19115 Rev Ed), the state con compulsorily acquire land if
1t is needed lor economic development. This weighti1119 in favour ol public interest
eMblc<l the massive transformation ot Singapore through extensive infrastructure
works such as Industrial estates, land transport and public housing development in
the 19-60s and 1970s.
Consider whether a constitutional right to property would enhance the
management of risk with
like Singapore?
to real property. Or is such i.1 right a luxury in small
pO>Sible through Lhe mobilising of the sources of production tO genernlC
economic activity that benefits more people. Besides developing a viable and
21
co111prornisc a society in
the 1011g run.
measured and priced with a degree of confidence)
economic
activity that is conducted by those able and willing to bear the potential
such risk-bearing acth•ity. With l'isk properly managed, economic actors can
project their time and invest ments over the long term rather than engage in
spernlative economic activity (H L Root, Cnpiln/ n11rl Collusion:
Politicnl
Logic of Global Economic Dcvelopmc111 (2006)). ·n1us, a viable legal system
helps ensure thtlt risk.. rat her than uncertainty, prevails in the economic
where one party to a
transaction knows more than another pariy about it - is common. A stable
business e1wironment, undergirded b)' the rule of law and inMitutions, helps
22
Chap1'r 1: Busints,s. Sot'itty and 1ht Law
1.48
Princ1plts of Singapott Busintss law
In short, a society tho.t wishes to promote economic de1'l'lopment will nttd
lo hav• good lows, a stable legal system. • viable tlhocal framework. and
sust01noble poh11cal and economic 1ns11tu11on< wnh 1ht goal of allocating
capilal dficienlly under 1he rule of law. There obo needs 10 be adequa1e
invcs1menl> in educa1ion and public heahh as economic del'elopmcn1 en1ails
noi Ju>t a legal framework but non-market improvements (IS well. 1liis
thal cco11omlc developmem is occompanicd by equity, fair play and
adequate social .afct)' nets.
Law and Economic Development in Singapore
1.49
Singapore'> economic dcvelopmenl highlights 1hc interpla)' of the issues
raised abol'c. Since its modern founding in 1819 by Sir lhomas Stamford
Rallles. Smgapor< has transformed from a colonial seaport to being the
second richrsl Asian counlry. wi1h one of lhe world's most compelilil'e
econom10> But thJS de1'dopmen1 did not come about by chance or good
fortune. 1he developmenl of a sustainable framework for econonuc progress
was mc11culously planned and de1erminedly implcmenled. Bold decisions
hi.,VC been taken and innovative changes inlplen"lcnted $ince
independence in 1965 in the drive 10 develop an n111och1honous legol
S)'>ICrn 1lrn1 responds 10 1hc need$ of 1hc people "'ho live. work and do
business in Singopore. Singapore's economic dcl'elop111en1 drive necessimed
1hc eslAbli>hmcnt of an cflicienl and effec1ivc legal •YSlcm, complemented
by poli1i,al will and economic ingcnui1y, 10
the
needs of
commcrcc and trode. Technology, supponed by a facilitall\'C sec of Jaws, is
aho harne»cd 10 good elfecL Undcrgirding all thc>e " the commi11ncn1 to
1he rule of law.
I.SO
Toda)'. Sing•porc is corui.centlr one of 1he
busine.s friendly places
111 the world. a> measured by the World Bonk's Do111g B11s111css mdicalors.
Her laws and legal sptem provide a robu>I framework for doing business
and is • key huilding block of 1he economy. which i< htavily dcpendtnl on
inlcrnatlonn1 tntde and invest1nents. 111c rconon'l ic co1npe1ition will becon1e
even more huen;c and 1he law. wi1h socic1y. nm<t reipond wilh nimbleness
10 keep lhc economic lifeblood flowing.
23
CONCLUSION
I.SI
Laws and the legal sysiem do nol <XJSt in a vacuum. This chapl<r hu
attempted to dcmons1ratc that together the)' constitule a ;ocial S)'>tcm
continually
10 respond 10 1he nttds of society. Much as most bu.111us
people view law a.s a set of rules. appreciating the Jaw· in it.s socio econo1nic,
cuhural and poli1icnl context pl'Ovidcs us wi1h a better undcr>landing of lhc
s lructure of 1he legol >)'Siem ond how it can focilitale or impede economic
activity. Most impor1:rn1 ly, laws, working in tandem wi1h on indivldunl nnd
society's ethical values, play a big J'Olc in ensuring that economic ac1ivi1y cnn
benefit socie1y and 1he people who live, work and play there.
Principles of Singapote Business Law
Chapter 2
INTRODUCTION
2.1
An Overview of Singapore Legal History
and Development
2.1 - 2.2
Introduction
2.3-2.9
2. 10- 2. 15
2.1 6
2.1 7-2.22
2.23- 2.26
2.27-2.32
2.33-2.37
2.38- 2.42
Legal and Constitutional De\rt-lopment
Singapore in the Pre-colonial and Early Colo nial Eras
The Fledgling Legal System
From the British to the Japanese and Back (1942- 1945)
The Emergency and Path to Self-govern ment ( 1948-1963)
Merger: Singapore in Malaysia ( 1963- 1965)
Independence and Initial Tasks of Nation-building
Development of an Autochthonous Legal System ( 1989-present)
Constitutiona l Remaking since the 1980s
2.43-2.49
Overview of Alternative Dispute Resolution in Singapor.c
2.50
The impact of a legal system o n the development of business activity in
a n economy can be significan t. If developed intell igently and judiciously, it
can facilitate and enhance econon1ic activity and developn1ent by providing
a predictable and stable cnviron1ncnl for business activities. At the sanlc
time, the legal and regulato ry framework should have a sufficient level of
Aexibility to encourage innovation and creativity, which are vital ingredients
for successful businesses in a knowledge-based economy. 'The g rowing role of
technologies, such as artificial intelligence and blockchain technology, is
dependent on the legal and regulatory environ1n ent acting as a catalyst. Overly
s tringent laws and a rigid approach to implementing laws may unnecessarily
stifle the creative development of business activity as well as the economy.
2.2
Conclusion
This chapter sketches the milestones in Singapore's legal and constitutio nal
development to give the reader a sense of th e evolution of Singapore's legal
developn1ent within the larger context of Singapore's progress, since its
rnodc rn founding in 18 19. Such an o vcrvic\v necessarily rncans that rnuch
detail has been omitted. In a nutshell, it hopes to capture the past and
present of the Singapore legal system as well as the current developments
o.ncl innovations (whether legal or otherwise) that continue to influence its
future di rection. Given the space constraints of this chapter, the discussion
i,n the Vilrious sections will inevitably have to be concise and succinct
'!he interested reader is therefore encouraged to refer to the more detailed
references provided, especiall)' 1\ Phang, 711e Dcvc/opmwt of Si11gaporc Law:
Hi.llorical anti Socio-1,cgal Perspwivcs (1990); K Y L Tan (ed), 7lie Singapore
Lcgfll System (2nd cd, 1999) and Essays i11 Singapore Legnl J/islory (2005):
a nd CM 1\irnbull, A History of Modem Singapore, 1819-2005 (20-09), for a
m ore thoro ugh discussion of the development of Singapore law, societ)' and
socio-political institutions.
LEGAL ANO CONSTITUTIONAL D EVELOPMENT
Singapore in the Pre-colonial and Early Colonial Eras
2.3
From its modem founding by Sir 'll1omas Stam fo rd Raffles, then Bcncoolen's
Liemenant-Governor, on 29 /ammry 1819,
10 self-government in 19S9 and
i.ts independence in l 965. Singapore's legal develop1nent was intricately
linked with its llritish colo nial master. In the past, English legal traditions,
26
Chapter 2: An Oveoview of Singapore Legal History and Devtlopment
pFaetices. ease law and legislation were adopted without much rnnsideration
Principles of Singapore Business law
2.7
as to whether they s uited local conditions. Indeed, there was " "slavish
adherence to English law" resulti ng in the "impoverishment of the common
low in Singapore" (see A Phang, 111c Dcvelop111e111 of Si11gnpore /,nw; Historicnl
a11d Socio-Legal Pcr'Sf>cclives ( I990)).
2.4
2.5
2.6
With Singapore's independence, and increa.<ingly from the I990s, there is
a conc:cned rnovc1ne111t towards developing an autochthonous le-gal systc1n
compatible with Singapore's cultural, social and economic requiremeuts. In
this regard, the economic success of Singapore can be auribute.d, among
others, to the wisdom of its politjcal leadership and its use of laws and
the legal system 10 build a new society. To ensure its economic prosperity,
Singapore's legal
stri1•es to be attuned to the needs and exp wationi
of the intcrnation:tl bus.inc.s.s cornn1unily.
Recent archaeologica l evidence in Singapore indicates the ei<istcnce of
an early lhriving e1nporiu111 in Singapore around the 14th century. 1bc
archaeological evidence ,tlso indicates that the settlement was abandoned at
the end of the 14th century. when Malacca was fo11nded and became 1he
leading cn1poriun1 in the !vtalacca Strait. 'l his extension of
history,
by abo111 500 years prior 10 the modern fo11nding of Singapore by Raffles,
s11ggests that Singapo re's origins in 1he l4th century was as a port of call
with connect ions to the region and the world. II was a part of the globalised
trt1dc, then d riven b)' the Yuan and Ming dynasties in China. TI1is was
followed by a 200-ycar period of decline when Singapore fell into. oblivion.
Subsequently, in the I 6-00s, Singapore was noted by European powers for its
strategic location and the line nat11ral harbour (sec J Miksic, Si11gaporc nnd
tire Silk Road of the Sea, 1300- 1800 (2013): C G Kwa, Si11gnporc Clrro11iclcs:
Pre-Colonial Si11r,t1porc (2017)). Prior to the arrival in the Mal.acca Straits of
the Portuguese, the Dutch and the British imperialists from the 17th century
in search of spices and trade. Singapore wus primarily under the rule of the
Johor sultanate, then based in upstream Johor before ii moved lo '13njong
Pinang on Binion Island in what is now Indonesia.
Little is known. however, of Singapore's legal history prior to the founding of
Singapore by Ratlles. W hat is often assumed is that Maia)' ndnl laws (localised
traditional law and custom in Indonesia and Malaysia) (ormed the basis o( a
rudhnent:u·y legal systctn for :i co1nn1unily of fi.shen ncn nu1n bering no n1ore
th,1n 200.
27
Against 1he baekdrop of Anglo-Duteh econom ic rivalr)' in maritime Southeast
Asia, Rames presciently determined that Singapore was a suitable port given
its strategic geopolitical location and deep, natural harbou r. It would enable
the British to ensure a good n1easure of control over the entrance to the
Straits of Malacca as well as the mllin shipping route betwccn South Asia
and Northeast Asia.
2.8
Raftles acted without delay and, on 30 January 18 19, concluded a preliminary
treaty with lcmcnggong Ab<lu'r Rahman, the Johor Sultan's representative
in Singapore, to set up a trading factory in Singapore. On 6 February
18 19, a formal treaty was concluded wit h Sultan Hussein of Johor and 1he
"Jt-1ncnggong to fo nnalisc the earlier agrccrnent. Singapore was plttccd under
jurisdictioll, which ill rurn was ad111illistmd by the GovernorGeneral in Calcutta, India. In 1824, Singapore was confirmed a British
possession through the Anglo-Dutch Treat)'. and the Treaty of Cession with
the Sultan trnd Temenggong.
2.9
Raftles sought to put in place a basic but functional legal system with
promulgated the
Regulations" in I823. De facto English law prevailed between
18 19 and 1826. Singapore rapidly evolved into a key trading port.
a uniform la1• that was '1pplicabie to all inhabitants.
The Fledgling Legal System
2.10
IUp lo this stage, Jbtlies and his successor Residents had no legal authority to
establish :my system for the ndminis11·ation of jus1ice. Whatever regulations
a nd srstem of justice established by Raffles and Resident John Crawford
were 11/trn vires (Lhat is. beyond their power oo· authorlt)'). Tiiis unsatisfactory
s late of affairs was resolved with 1he Second Charter of Justice ("the Second
C harter"), granted by the British Parliament on 27 November 1826, on the
petition of the East India Company (see further A Phang. From Formdatio11
to Legacy: 7lre Second Clral'ter /11,<ticc (2006)).
2.11
1 he Second Charter provided for the establish ment of the Courl of Judicature
o f Prince of Wales' Island (Penang), Singapore and Malacca with civil and
c rilnlnaJ jurisdictio n o n par with s-ilniJar cnurls in England. Alt hough it
did not explicitly slate that English law was 10 be applied in Singapore, the
Second Charter ht1d been assumed to provide lhe legal basis for the
reception of English law in Singapore. Local case law, following the landmark
28
Pnnc1plts ot S1n9;iport Business Law
Chapter 2: An Ovtrvitw or Singaport ltgal History •nd Otvtlopmtnt
and trade expanded eightfold. 1 his m turn 3lt1'3fted more immigrants from
Sou1hcas1 A>ia, Chma and India and farther awai'.
r3Se of R v \\7/Ja11s ( 1858) in Penang, had adopied the leg3l position that
English law (both common law and equity a> it stood tn 1826 a> wdl as
prc-1826 English lcg1sbtion) was introduced to Singapore \1a the Se<:ood
Chorttr.
2.12
Singapore and the Rrilish senle111ents of Malacca and Penang collectivdy
became the Straits Sell lements in 1826, under the direct control of British
India. 111 1833. thc Governor-General of India was empowered 10 legislate for
the Str11its Scnlcment&. During this period, the leg.11systc111 was characterised
by "legal cht1os of epic proportions" (see K Y L Tan (ed), 7lie Si1tgnpore l.tgnl
System (2nd ed. 1999) at p 33).
2. 13
'lhc local bmineM community
l. 14
2.15
unhlppy with tht inadtquatc judicial
framework which meted out jw.tice infrt'Cjuently and poorly. Although the
Third Charter of Jumcc "'35 granted m 1855 to help case the increasing
legal workload, it did not improve the statc of affair". With the abolition of
the Ea>t India Company in 1858, the Strait> Settlement> was tron>fcrred 10
the Indian Govcrnmcnt. There were pockets of unh3p111ness with the Straits
Settlement> being administered out of India as it tended 10 re•ult in their
int<rcM> being rclcgntcd, if not neglected. In 1867, the Straits Scttlemcnls
became a Crown Colony under the direct jurisdicuon of the Colo"ial Office
in London.
In LK68, the Supreme Court of the Stntib Settlcmc111s was established
following lhc abolition of the Court of Judicature. In I873, there w:1s further
rcorgani>ation with I he Supreme Court given the jurisdKtion to sit as •
Court of Appeal. Pr1-0r to tlus, appeals were to the Krng-1n-CounCtl {the
lx>dy of royal advisers in England, also known as the Privy Council). In
1878, the local courts wcre restructured accordingly to mirror thosc of the
Engluh I ligh Court.
'Ihe popularity of the stean»hip for trade in Ille 1111d I8(>0> coupled mlh the
opening of the Suez Canal in 1869 resulted 111 Slnga1>orc's transformation
from being a pori of call for regional trade to one for International trade
and, with It, the movement of people, ideas Dnd finance. S1ngnpore became•
major port of Cllll for ships plying between fa1rope lll\J i!nst Asia. Witl1 the
growth o( the rubber indust ry and Malaya bc111g • major rubber exporler.
Sing.1pore became the main sorting and export ce11tre in the world for rubber.
Between 1873 and 1913, S111gapore experienced unprccede111cd prosperity
29
From the British to the Japanese and Back (1942- 1945)
2.16
During Lhe fapanese Occupation of Singapore between February 1942
a nd September 1945, Si11gnpore was renamed Syo1tnn-10 (Light of the
'J11e end of the Second
South) by the fapnncsc military
World War resulted in the 1cmron1ry rule of Singapore by the Rritbh
Military Admin istrot1on, With the disbanding of the Straits Se1tle111e11U in
1946, Penang and Malaccn became part of the Malayan Union proposal,
nnd later the Federation of Malaya m 19.fS. However, given its strategic
and economic importance, Singapore was not destined on the path o(
independence at the same pace as Malaya. Jnstcad, it was made • Crown
Colony with its own Cons111u11on. I 1ke many other Bnhsh colonies. th< real
power 10 govern and l<gulatc wa• \'CSted in the hands of thc Go\'ernor and
colonial officials, with • modicum of local participation and representation
through limited elected >cats 011 the Legislative Council. The first such
elections were conductcd in 19·18.
The Emergency and Path to Self-government (1948-1 963)
2.17
With the declared goal of taking over Mai•)'• a nd Singapore th rough violence.
the upsurge In communist united front activity led by 1hc Communi>I Party
of Malaya (CPM) resulted in 1he Malayan colonial authoritics damping
down on the CPM during a period known as the Emergency (1948-1960).
Oraconi3n laws were enacted. including de1cm1on ••ithout trial. m the fighl
ag3inst comn1unism.
2.18
The Progressive Party wa; then the leading pohucal party 111 Singapore.
having won the Lq;1<la1ive Council elections in 1948 and 1951. lnttrc't
in Singapore's pohtical hfc
nascent •nd tended to be drawn along
t he p;trtosan line. of non-communist l1gains1 pro-comrmu11st. In 1953. a
Constitutional Comnmslon. headed by Sir George Rendel ("the Rendel
Commission"), was forn1c.l to review the Colony's con;titution llnd to enlarge
public part icipat ion in sclf-11ovcrnoncc. 1l1e Government acccptc<I 111o;t of
the Rendel
rtconunenda1lons including the transfor1n,,tion o(
the Legislative Council Into a chamber comprising mainly of directly elected
members. However, reJI power con1111ued 10 be ves1cd m the Governor and
30
Chapter 2: An Oveoview of Singapore Legal History and Devtlopment
2. 19
2.20
Principles of Singapore Business law
the officbl members of the Council of Ministers rather than tne eleeied
of aehieving political independence from the B1•ilish. The pro-eommunislS
A.•sembly mcmb<rs.
took the merger proposal as an imperialist plot.
In the first Legislative Assemblr elections in 1955, the Labour Front - led
by David Saul Marshall - won 1en of !he available 25 seals. '!he People's
Action Parry ("PAP"). founded in the same year, won three seats. Marshall
became the firs! Chief Minister of Singapore and drove the movement
towards self-government. Conslitulional talks o n self-government began in
1956 in London.
2.24
By this lime, the PA P was deeply mired in intra-parry intrigues which split
the party. 111e inevitable open spli1 arose in July 1961 with the proposed
merger with Malaya being the tipping point. ·nie faction led by Lim Chin
Siong broke away and formed the Barisan Socialis (Socialis1 Front). 1liis
defection and lhe Barisan Socialis' subsequent boycott of the 1968 general
elections paved the way for the PAP 10 be the only political party in
Parliament between 1968 and 198 1.
2.25
The 111ain terins of the 1nerger provided fo r the
However, Marshall's Chief Minislcrship was short-lived. lie resigned on
6 June 1956 after the breakdown of the Londo1t constitutional talks. Lim
Kuala Lumpur to have responsibility for defence, foreign affairs and in1ernal
constilulional
security \\'ilh local autono1ny in n1aHers pertaining to finance. educ:ition and
Jabour. Singapore would also
her own executive sune govcrnn1ent. A
referendum in Singapore on I September 1962 gave the go-nhead for PAP's
p lan of merger.
On 28 May 1958, the Constitutional Agrec lnenl was
signed in London. 1lle British Patliamenl passed the Staie of Sing:apore Act
011 I August 1958, paving the way for Singapore's transition from a colony to
a self. governing
in 1959.
2.2 1
In May 1959, Singapore had its firs t fully elected Legislative A&<embly. 111e
PAP had won 43 o ut of Lhe 5 1 <eats, garnering 53.4 per cenl of the total
votes. 111is marked the shirt of PA p·s political dominance in Singapore. On
3 lune 1959, the new State Constitution wns brought into force. The first
governn1e nt o f the State of Singapore was sworn in on 5 June. Lee Kuan Yew
became Singapore's first Prime Minister. Yusof bin Ishak was appointed the
2.26
Yn11g dl-Pertuan Ncgnrn (Head of State).
2.22
Wee Chong /in became the first local member of the Singapore .Bar to be
made a Puisne Judge (equivalcm of a Migh Court Judge) in 1957. In 1963.
Wee became the first A.<ian lo be appointed Chief Justice of Singapore.
Ahmad bin Mohd lbrohim was appointed the lirsl Stale Advocate-General of
Singapore In June 1959 ond became the firs! Attorney-General on Singapore's
independence until January 1967,
On 27 May 196 1, the Mlllayan Prime Minister. '1\mku Abdul Rahman,
proposed closer political and economic cooperation through the merger of
!he Federali<>n of Malaya, Singapore, Stuawak, North Borneo and Brunei.
'lhc PAP fovourcd merger for reasons of economic >Urviv:tl and "'a means
31
With Brund having opted out, Malaysia - consisting of 1he l'ederalion of
Malaya, Singapore. Sarawak and Nort h Borneo (now Saboh) - was formed
o n 16 September 1963. Indonesia and the Philippines opposed the merger.
Indonesia's President Sukarno subsequently launched the violent Ko11f1'011tasi
(Confro ntatio n) ca1npaign against /\1alaysia. With 1nerger, Singapore"s court
system became part of Malaysia's. Singapore's Supreme Co<l rt was replaced
by the High Courl of Malaysia in Singapofe. 1lte final eourl of appeal was
the Federal Courl in Kuala Lumpur.
Independence and Initial Tasks of Nation-bui lding
2.27
W ithin two years. the merger wos failing for a variety of reasons ranging
fro m the internal politics oC Malaysia, personality dash« and the dillerenl
visions of ethnic politics in a muhi-raciol socicly. All of these, coupled with
the threnl and eruption of racial violence, .as well as the receding threat
of communism, prompted a negoth>ted departure of Singapore from the
fedcrntlon of Malaysia o n 9 August 1965.
2.28
'Jhc Singapore Parliament took several months to complete the conslitulional
formalities and legal procedures required for them 10 be in accord with
1965, the Singapore
Singapore's independent Slalus. On 22
M erger: Singapore in Malaysia (1963- 1965)
2.23
Govenunent in
Yew Hock succeeded Marshall as Chief Minister and led the March 195?
32
Chapttr 2. M Ovtrvitw of Singapore le9al His-,oty and Otvtlopment
Princ1plts of Singapott Busintss law
Parliament pmed the Constitution (Amendment) Act (No 8 of 1965). with
11 also refommended the cre:nion of the otliee of an
as an
independent check on 1he actlonJ and decision• of ci,;J servant> (for a more
detailed discussion, $et K Y L Tan (ed). The S111gap-0t< ugal Sys1<111 (2nd td.
1999) at pp 49- 5 I). One recommenda1ton that w•s accepted resulted in the
creation of an advi>ory body, now known as the Presidcn1ial Council for
Minority Rights, to offer ndv1ce to Parliament on proposed legislauon and ils
in1pact on the minoritie$.
rctrosp<ehve effect 10 9 August t96S. which pro,•1ded, 111rrr aha, for a simple
majority r<quorement (rather than the typical two·tlurds m•Jonty) to effect
a constitutional amendment. 11 was O>ltnsibly a pragmallc response 10 the
rapid >Ocio economic: and political reenginoerong needed m 1he fledgling
11n1ion-statc. lhc super-majority requiremen1 for pas<ing a constitutional
a1ncndmcnt wns only reinstated in 1979.
2.29
2.30
2.31
Pt1rlinmc111 also passc<I the Republic or Singapore Independence Act (No 9
of I965) ("the Act"). ngain ro11·ospcctivel)'. for the rccep!lon of exccu1ive rutd
lcgi•lative powers which had previous!)• been ''C>ted in the Malaysian Federal
govcrnmcnl. Section 7 of 1he Acl provided for Malo)•, Mandarin, Tamil and
Enghsh to be !he four official languages on SinJppore, and Malay lo be the
na11ona1 l•nguage (also found in Art I53A Constitution of the Republic of
Smgapor< (1999 Rev Ed) ("the Sing>pore Consltlullon"). Yusofbm Ishak was
•ppoon1ed !he Republ ic's first Presideni on 22 D<eember 1%5.
lhe task of building a na!lon w11h no naiural ,.,ources or domestic market
and a multi -racilll and multi-religious society occupied 1he Government's
a11en1ion, In the economic realm, Singapore lni1ially pum1ed a labourlntcnslvc, Import-substitution induslrialisoiion programme. which quick!)'
gru<luotcd to un inCl'Casing emphasis on foreign <llrccl lnves1men1, cllpitttl·
ln!cn>lvc. cxpo1·1-oricn1cd induslrialisalion nnd the dcvelopmenl of a scn•iccs
Variou:, inveshncnt incentives, co facilitate job creation and the
1rans fer of tcchnolo&l" were put in place. 1 he laws on emplo)'mcnl w<re also
amended lo reduce 1he powers of the trade unions and lo make slrikcs iUegal.
The goal wa; to make Singapore an in\'<Stor friendli• de>!tnalion lhrough 1he
promo11on of mdustnal peace and disciphn< among 1he workforce.
lhe Government also established on December 1965 a Constilutional
Commls<1011, headed by Chief Jusuce Wee Chong /tn, 10 examine how the
rlgh1< of1he minorities (racinl. linguimc and religious) could becon>ti1111ionally
8afoguarded. In ii> 1966 repor1. 1he Commission recommended. omo11g others,
1hu1 1hc co1»til111ional provisions on fun<lllmentul hbcr1ies. !he Judiciary, the
Lcsislm1re, !he scncrlll elections. minority
the •pt•ciul position of
lhc
und the amendment procedures be cn1re11ched. In other words.
amending lhcsc provision> would require n 1wo·S1cp process: a two·lhirds
majorily In PJrllamml and a two-1hirds majorily al a nalional rcfrrcndum.
33
2.32
With 1he pnssi11g of the Co11>1i111tio11 (Amendment) Act (No 19 of 1969)
a nd 1he Supreme Courl of )udlca1urc Ac1 (No 24 of 1969) in Deccmbrr
1969, 1he anomal)' or 1hc Singapore I hgh Courl being par1 of 1hc Mala)'>1an
Judiciary was finall)' resolved. These amendmenis also provided for 1he
Judicial Con11ni11ee of Her Rrh3n111c Majc$t)r's Privy Council as the highest
court of the l•nd. lhe Criminal l'ro<:cdurc Code (Amendment) Act 1969,
which abolished the 1ury <)'•!Cm, came into force on 5 January 1970
Devel op ment of an Au tochthonous Legal System (1989-Present)
2.33
In the 1970s and early 19808, th<re was a casual comfort wi1h 1he inheri1ed
traditions. legal pntctices and IJW> of England. The drive 10 create nn
nutochthonous leg.ii •ystem gained momentum in Lhe late 1980> und
accelerated wilh 1hc nppoln1mcn1 or Chief' Justice Yong Pung How in
Scplember 1990. lly 1989, appeal• to the Pri''Y Council had already been
r.es1ricted. In 1993, the permanent Court of Appeal replaced 1he Privy
Council as Singapore's highes1 court. 1 hese changes can be explained by 1he
increasing confidence, the growing malunly and inlerna1ional standing of
S1ogapore's legal •Y•lem as well a; the concern that Bnta.1n» mcrusmg lmks
wnh !he European Union would render F.nghsh law oncompa11ble wnh local
developments and a<pirallons
2.34
In November 1993, the Application of Enghsh Law Act (Cap 7A, 1994
Rev Ed) came inlo force and specified the exlcnt 10 wh1<h English law
l> :ippli"1ble in SingJporc. Ihis Acl also repealed s 5 Civil Law Act
(Cap 43. 1988 Rev fal), 1hen 1he mo>I signilicanl rccepuon provi<ion In
I he Slalule book•. The laucr provided 1hu1 if a question or issue on •pccific
or law or in gc111:rnl tn(•rcnntilc law urosc in Singapore, the law 10
be admi111s1ered shall be 1he >amc .1s 1hat adminisicr.d in England ,u 1hc
concsponding period, unless olhcr provi>i<ms are made by any law having
force in Singapore.
34
Chapter 2: An Oveoview of Singapore Legal History and Devtlopment
2.35
Prior lo the repeal of s S Civil Law Aet, no one knew fo r eertain lhe' complete
list of l;nglish s1atu1cs (even those 1hat have been rep.,,,lcd in England) 1ha1
applied here. This helmed amendment has removed much of the uncertainty
and unsatisfactory stale of affairs 1hal had prevailed over !he applk abilily of
English legislation and common law in pOSl·colonial Singapore.
2.36
Given that politkal, social and econo1nic c.ircun1stances have changed
enorn1ously since Singapore's independence., the land1nark Pracl ice .Stalement
on Judicial Precedent of 11 July 1994 declared that the Privy Council,
Singapore's predecessor courts as well as the Court of Appeal'.< prior decisions
no longer bound the permanrnl Court of Appeal. 'I he Practice .Statement
reasoned that "[t[he development of our Jaw should reflect these changes
and 1he fundamental values of Singapore society". In lhc $ame year, a 1ww
con.stitulional provision was passed l-0 establish an ad hoe Const itutional
Tribunal. consisting of at least three Supreme Court Judges, to which the
President inay refer for its binding opinionJ any question on the etfect of
any constitutional provision which has arisen or which is likely· to arise.
Thus for, !he tribunal has been convened once only where it provided
a ruling on Ar! 22H pertaining to the President's veto powers (sec
Ctmstitutionnl Reference No I of 1995 ( 1995)).
2.37
In January 2015, 1he Singapore International Commercial Court (SICC)
was established as • division of the Singapore High Court and n part of !he
Supreme Court of Singapore. The SICC is designed to deal wilh transnational
commercial disputes :rnd builds on the fo undalions of a legal an d judicial
system that is highly regarded. 'lhe SICC is an integral par! of the endeavour
to esrnblish Singapore as an international and regional hub for dispute
resolution in conHnercial n1:.uters.
Constitutional Remaking since the 1980s
2.38
2.39
The late 1980s and early 1990s: was a period of intensive constitutional
remaking to devd o p an autochthonous government and parliamentary system
of Singapore. ·111e departure fro m 1he Wes1mins1er-in<pired parliamentary
system was evident through the institutional innovations which 11ltc1npted Lo
manngc and mould the unique political circumstances here.
Between 1968 lmd 198 1. the PAP was !he only party in 1'3rliamenl. ·nie
Principles of Singapore Business law
innovations to Lhe eleeloral system. The Ii fSI was the erealion of NonConstitucncy Members of Parliament ("NCM Ps") in 1984. llcrc. up 10 six
·'best losers" in the general election (based on the highest percentage of votes
p olled) securing at least LS per cent of 1he vote in the constituency contested
may be invited to be NCM I's (s 52 Parliamentary Elec1icms Ac! (Cap 2 18,
201 1 Rev Ed)).
2.40
In 1988, 10 ensure that Singapore polit ics cunlinucd to keep faith with the
ideal of multi-racialism, Parllnmem amended the Constitution to provide for
the creation of lhe C roup Representation Constituency ("CRC") (Ar! 39/\
Constitution of 1hc Republic of Singoporc). Mere, several candidates - one
o f whom must be of a minority race - contpete as a team for an enlarged
(which in
was an
of several single•cat constituencies). In 1990, anot her category of Members of Parliament
- the Nom inated MP ("NMP") - was created to provide a wider range
o f non-part isan views from non·politicians. Over the years. 1he number of
NMPs has increased from two to nine (Art 39( l)(c) Singapore Constitution).
2 .41
The final significant constitution:il anlend1ne nt relating to governn1ent \\tas
the conversion of the Presidenl's office fron1 a 1nere ccrcn1onia.I head of stale
appointed by Parliamclll to one i11 which the President was popularly elected.
The Elected President scheme had a long gestation period and was driven
by the PAP Government'.< (ear of a "freak" general election resuhiug in the
PAP being thrown oul of power and repla.:ed by a populist government
which may lead Singapore lo political and economic ruin. Tiie ostensible
objective of the Elected l'rcsidcnl was to inslilulionally safeguard Singapore's
foreign reserves ru1d the inlcgrily of the civil service. Tite Elected President's
custodial powers serve as a second "kc( lo 1he reserves and the Elected
Preside nt is vested with the power of veto on key c ivil service appointnll·nts
(for a fuller disc1tssion. see P E Lam and K Y L Tan (eds). Mm111ging Political
Clra11gc i11 Singapore: Tl1e FJectcd P1·csidc11cy (1997)). President Wee Kim Wee
first exercised thC:' powers of the Elected PNsident when the Constitution
wns ame1tded and the elected presidency im plemented in 199 I: Ong Teng
C heong won the first-ever J>rcsideniial elections in August 1993. S R
Nuthnn was President between Septe1nber 1999 nnd August 20 11 as the two
presidential elections in 1999 and 2005 were u t1contested. In 20 11. Tony Tru1
E<eng Yam wns elected President in the mos! keenly conlested presidentinl
election.
clan1our fOr an alternative voice in Parli:unent tesulted in the
35
36
Chapter 2: An Oveoview of Singapore Legal History and Devtlopment
2.42
Principles of Singapore Business law
In 2016, a C,-0nstituti onal Commission headed by Chief Justice Sundaresh
Menon was established to study selected aspects of the elected p residency.
The Commission proposed, among others. that the eligibility criteria for those
seeking lo contest in the presidential elections be enhanced. To safeguard
than I56 Convention signatories, arbilrnl awards rendered in Singapore
a re potentially enforce"ble in more than 156 jurisdictions. '! he Arbitration
(Foreign Awards} Act (Cap lOA, 1985 Rev- Ed) was e11acted in 1986 to
give effect to the Convention. This Act was repealed in 1994 and replaced
by the International Arbitration Act (C'p 143/\, 2002 Rev Ed). which
incorporated the United Nations Commissio.n on International Trade Law's
("UNCITRAJ:) M"del Law on lnlernational Commercial Arbitration.
the regular representation of aH rnajor rncial con1n1unities in the elected
presidenC)'• the Com.mission recommended a "hiatus-triggered" reserved
election n1echanis1n. \.Vhen a particular race has not been represented in
the elected presidency for live continuous terms, the following presidential
election will be reseirved for candidates from that race. The government
accepted both rec:on1r:nendations and constitutional amend1nents \\/ere n1ade
to give effect to them. Madam Mali.mah Yacob was the only eligible candidate
in the first reserved presidential elect ion (for Maia)' candidates) in 2017.
The constitutional amendments
for the number of NCM Ps to
increase to 12 (less the number of elected opposition MPs).
2.46
doing business in Asia.
2.47
O VERVIEW OF A LTERNATIVE D ISPUTE R ESOLUTION IN SINGAPORE
2.43
In commercial matters, litig,11ion has been the dominant form of dispute
1·.esolution i11 Singapore and in many other common Jaw jurisdictions.
Howeve r, alte rnative dispute re.solution ('J\DR") has grown in irnportance in
Singapore and intern::uionally as a means of dispute resolution for matters
ranging from domestic and social conflicts to Jarge-sCllle. cros.<-border
Jegal disputes. It is now widely used in Singapore. especially in co1nn1erc:ial
disputes. ADR h"s gained importance as an effective, eflicicnt and economical
means of resolving • spectrum of disputes in a variety of settings.
2.44
2.45
l he Singapore Govern ment is a strong proponent of AD R and nns put in
place the institutional and infrastructurol framework to support this. 111e
Judiciary is also firm ly behind ADR initiatives in sett ling disputes and iL<
Rules of Court provide ample opportunity for ADR even withi n a litigation
setting. In tandem wll h Singapore·s quest to be n total business centre, great
efforts have been expended towards making Singapore a major centre for
dispute resolution simllar to London, New York and Paris.
In 1986. Singapore acceded to the 1958 New York Conventio" on the
Recognition and Enforcement of
Arbitral Awards ("the Convention").
Under this Convention , each contract ing state is requ ired to reco,gnise and
enforce arbitral award,s 1nade in another cont racting st:ite. As there are 1nore
37
In 1991, the Singapore Imernational Arbitration Centre ("SIAC") was
established. In November 2014, the Singapore International Mediat ion
Centre ("SIMC") was otlicially launched as an independent, not-for-profit
Lnstitution that specifiClllly seeks to provide mediation services and products
for parties involved in cross-border commerdnl disputes, especially those
On the domestic front, the Singapore Mediation Centre ("SMC") was
established in t997. In 1994, mediation of civil disputes was first introduced
in the then Subordinate Courts lhrough lhe Court Mediation Cemre. Since
t hen, mediation is also routinely conducted in the Small Claims Tribunals, the
Family Court, the Juvenile Courts, the C-0nsumer Association of Singapore
("CASE"). and the Maintenance of Parents Tdbunal at the Ministry of Social
a nd Family Development. ·n1e Centre for Dispute Resolution was launched
in 201 5 at the State Courts (formerly the Sub<irdinate Courts) to consolidate
the ADR services. In line wJth the governmental emphasis on harnessing
electronic technology, i he Judiciary has also lev<•raged on lechnology lo
increase efficiency and productivity in resolving disputes.
2.48
In 1997, the Government's multi-agency Committee on Alternative Dispute
1nodes of dispute rt-solution
Resolution recon1Jnendcd that
be intl'Oduccd and encouraged for all fornts of commercial, social and
community disputes. The explicit goal was to help prevent Sing•poreans
f:roln becon1ing loo litigious. 1\itediation was singled out as being in accord
with Singaporcs Asian traditions and cultures. The development of an Asian
model of media1ion drnws on the customary and influent ial role of the
trnclitional leaders of the various races such as the pcngli11/11 (Malay knmpmig
headman), the panchnyat (the Indian community council) attd
senior
clansmen of the Chinese clan associat ions in mediating conflicts within
those COJn111l1nitles.
38
Chapter 2: An Oveoview of Singapore Legal History and Devtlopment
2.49
Principles of Singapore Business law
Sinee 199&, this abiding foith in ADR. especially mediation. mot ivated the
towards legal autoehthony continues, and legal innovations will have to
establishment of Community Mediation Centres ("CMCs") as part of thc
nationnl effort to foster a mediation culture. Community mediation is
envisaged as an eff'ective means of settling relational disputes on the ground,
especially in muhi-ntcial, multi-religious Singapore. 1lic CMCs are regulated
under the Community Mediation Centres Act (Cap 49A, 1998 Rev Ed).
continue and be guided by the need for rdenncc to and compat ibility with
Singapore's needs and local conditions. Further. with trade a11d investments
being Singapore's lifoblood. the legal system needs to provide adequate
p ro lcclion to all and inspire confidence in the inl('rnational busincs.s
community that it is both effective and eflicknt in according justice on the
basis of fairness, equity and impartiality. Singapore recognises the importance
o f law in 1naintnining political and socit'I order as we-II as engendering
conducive conditions for economic activity. Indeed, law is also regarded
as a fundamental econo1nic value, which Ol USI be carefully nurtured and
harnessed to enhance Singapore's aspirations to be a total global business
centre.
Box 2.1
MM
Law as strategy and a n economic tool
The rule of law is seen as an economic asset in many societies to be valued in the
same way as factors of production such as land and labour. Indeed, Singapore has
used the Integrity, standing and quality of lu legal environment Lo create susl.alnable
competitive advantage for the economy. Given that Singapore is without any natural
resources and is heavily depe ndent on trade and foreign investments, the qu11llty of
her legal system Is critical. Singapore is now promoting itself as a business .1nd legol
hub, leveraging on the reputation of the legal and business sectors.
In 2006, the Singoporelcnv endeavour was launched. Olfldally formed and
supported by the Slngopore Academy of Law and the Ministry of Law, SlngoporeLow
seeks to increasE: lhe internationa1 profile
or Singapore law and to promote Singapore
as a centre ror dispute resolulion. The key focus of Si119oporeLow Is to encourilge
parties to choose Singapore law as the governing law ror their lntemalional
com1n erciat transaclions such as where foreign parties are unable to agree which
jurisdiction, and thus law, should govem their transactions and disputes, or when
Singapore parl'ies enter Into agreements with foreign parties.
Students are encouraged lo consider the lollowlng questions:
(1) Is legal autochrhony vital in ensuring that Singopore's legal development
retains its resilience, legltlmacy and appeal?
(2) To what extent has the law played a leading role In Singapore's development
and transformation In the coloni11I era and since Independence?
(3) How can lav11 continue to play a facilitative role in an era characterised by
challenges posed to established ways of doing things, such as the advent
of new technologies, a "sharing economy" (choracterised by the <haring
of under· utillsed ass.ets, whether n1onetised or not,
in
ways thait improve
efficiency, sustainabi lity and community) and greater global uncerLainty?
CONCLUSION
2.50
In the last 20 years, the Singapore legol system has gradually become less
n copy or the English lcgtil system - it hns evolved its unique identity and
role nipidly in serving the Inhabitants or a mult i-rncinl global city. The drive
39
40
Principles of Singapote Business Law
Chapter 3
I NTRODUCTION
3.2-3.3
The Constitution and the Three Governing Arms
Following a brief historical sketch of the Singapore legal system in Chapter 2,
t his chapter seeks to provide an account of the process of law-making, ii.I
implementation and adjudication by the various legal institutions and bodies
i.n Singapore. Apart fro1n exploring the structure. conlposition and functions
of these legal institutions, we will also briefly examine in the lost section
legal e<tucation and the legal profession, as well as other related professional
3.4-3.8
The Legislahirc
a lready been discussed in Chapter 2, they will not be pu rsued here.
Legal Processes and Institut ions
3.1
3.1
Introduction
bodies in Singapore. As lhc alte rnative dispu le resolution n1cchanis1ns have
3.9-3.11
111e Parliamentary Law-making Process
3.12-3.IS
TI1e Executive
3.16
3. 17-3. 19
The Judiciary
The C-Ommon Law Tradition
111e Doctrine of Judicial Precedent
Common Law and Other Legal Concept.I
( I) Common law versus equity
(2) C-Ommon law versus written law
THE CONSTITUTION AND THE TH REE G OVERNING A RMS
3.2
3.20-3.28
3.29
3.30-3.31
3.32
3.33- 3.35
3.36
3.37-3.49
3.50
3.51-3.53
3.54- 3.61
3.62
(3) Civil law t ra dition ve rs us con1mon la\\1 tradition
(4) Civil law versus criminal law
111e Court Structure and Hierarchy in Singapore
Technok>gy and the Courts
lntcrprclation of Written Law
The most fundamental legal document within the Singapore legal system is
the Constitution, the supreme law of Singapore. Article 4 of the Constitut ion
p rovides that any la\v enacted by the Legislature after the cornmcncemenl of
the Constitution that is inconsistent with the Constitlllion shall, to the extent
be void. As the s upreme l aw, Lhe Constitution "breathes"
o f the
life into the three main arms of the stale: the Legislamre (the Parliament).
the Executive (the Gove rnrnent) a nd the Judicia ry. At the sa1ne thne. it
d elineates their respective powers, roles and responsibilities within the legal
system. According to the Constitution, the 1nain role of the Legislature is to
enact wrillen laws, the Executive to implement and enforce lhc laws and the
Judiciary lo adjudicate disputes between the litigating parties based on its
interpretation of the laws (sec Figure 3.1 ).
The Legal Profession, Legal Education and Other Professional
Bodies
Conclusion
CONSTITUTION
Executive
legislature
Judiciary
Elected President
(Head of Slate)
Elected President
Supreme Court
Prime Minister
Members of
•
(Head of Government
and Cabinet)
•
Implements and
onforccs !ho
Lmv rnak1ng body
M.1kcs wnttcn law
enat h!d laws
" Parent le9,, la11on
promulgates
su bs1d1<1ry 1091slrit1on)
•
Stale Courts
Parliament
:: Stillutc
Aa1ud1cates d1spu!Ps
between l1tiqan ts
Judge-s
- Case law
- Ac:! of Prtrhamr:inl
Figure 3.1 The Constitution and lhe three governing arms of State
42
Chapter 3: legal Pro.cesses and Institutions
3.3
The Constitution also entrenehes eerrnin fundamental
Principles of Singapore Business law
sueh as freedom
3.7
of religion, freedom o f speech and equal protection under the law. 'lbese
Members or Parlia111en1 ("NCM Ps") and the Nominated Members or
Parliament ("NMPs"). To offer an allernative political voice in Parliamenr,
NCM Ps nre appointed from 1he Clmdidales who have secured at leas I 15%
o ( the vote in the constit11ency and polled t he highest percentage of votes
nmongst the "losers" in 1he general elections. Following the 2015 general
elections, three NCMPs were appointed. A-ccording to the const itutional
amcndmenl in 201 6 (Acl 28 or 201 6), the maximum permitted nu mber of
NCMPs from the opposilion parties is 12. 'The NMPs, on the other hand.
a re non-politicians who have distinguished themselves in public life and
have been non1inatcd lO provide a greater variety of non·parlisan views in
Parlian1enl. lhe
stipulates that NMPs shall not e xceed nine
i.n number. In conlrasl to the elecled MPs a nd NCMPs, the NM Ps do not
e njoy voting rights on constitutional an1end1nents, money bills and votes of
in the Governn1ent.
indMdual rights are not absolute but qualified by public interest sucb as the
1naintenance of public order, i-norality and national security. In addition to
the gcn«ral protection of racial and religious Jninoritie-.s, thl' Constitution
recognises the special position of Mala)'S, as the indigenous people of
Singapore. 11ie provisions of the Const itution may be amended by the votes
of two-thirds of the total number of elected Membrrs or Parliament. As
and when Article 5(2A) of the Constitution comes into force, th e specific
constitutiont'l an'lendr:nents seeking to arl'1cnd the provisions on fundamental
liberties will require, in addition, at least two-thirds of the total number or
votes cast by the electorate in a national referendum.
THE LEGISLATURE
3.4
3.5
The t egislat1ire serves as the major law-making body in Singapore. It
comprises the elected President and the Parliament. 1lw law-making
machinery operates ''ia " unic'1 meral (single-house) system. The Singapore
Porliament, •s the embodiment or representative democracy. consisls or
the Members of Parlia menl ("MPs") and the parliamentary proceedings are
presided owr by the Speaker of Parliament.
There nre two eategories of non-elected MPs: the Non.Const ituency
3.8
The elected !v1Ps are drawn fron1 cand idates who have wqn in I he general
elections htld every four Lo five years. Following the general election s in 20 t5.
a majority of the 89 sea\$ in Parliament is held by the ruli ng People's ACl ion
Party ("PAP") whilst the opposilion Workers' Party holds the balance. The
elected M Ps nrc drnw11 frorn a co1nbination of singlc-n1eJnbcr constituendcs
as well as Group Representation Constituencies ("GRcs•).
For the pu rposes of providing a more i11 -depth discussion of specific
p ublic issues or Bills, the Select Committee, whose members are nomrnated
by the MPs. scrutinises legislat ion and s<1'bmi1s reports on ii$ findings
to the Parliament. An example of a Sele.et Comminee hearing is the
o ne concerned wilh 1he conslitutional amendments 011 Lhe cs1ablishmen1
a nd roles of the Elected President ("El'") in 1990. The Go"crnmenl
Parliamentary Committees, formed at the initiative of the PAP and drawn
exclusively from the PAP, focus on specific or specialised 1opics (such
as cduc:ltio n or transport) with a view to generating greate r debate in
P:.irlian1ent.
The Parliam entary Law-making Process
3.6
According 10 the Co1>stitution. each GRC consists oi three to six members,
at least one of whom must be of a minorily race. One official aJm of the
C RC
is to entrench rnuhi· radalis1n in Singapore politics. '"l11is GRC
scheme is, in praclicc. tied 10 1hc establishment of Town Councils. whose
role is to marrnge the housing estates under the Housing & Oevclopmenl
Board at t.he local level. A Town Council is usually formed from a grouping
of constituencies under 1he GRC scheme. Candida1cs who have won in the
general elections via ! he GRC ticket hnve often banded Logclher 10 form a
Town Council in order lo achieve greater econoJnies of sca1e.
43
3.9
The law-making process begins with a Bill. normall)' drafted by the
Govcrnmenl legal officers. Privale member's Bills ;1re rnre in Singapore. One
except ion was the private member's Bill initiated b)' NMP Walter Woon
in 1994 which evcntunlli• Jed to llte enactmenl of the Maintenance of
Parents Act (Cap 1678, 1996 Rev Ed). Subsequent amendments to the
Maintenance of Parents Act were nlade in 20 l0 in order lo e1nphasise
conciliation and s-trc:unl.ine the procrsses ror clal111lng n1aintenanct and
44
Chaptt:1 3: legal PrO('tS.Ses and lnst1tut1ons
enforcing miintenance orders pursuant to a 8111 tabled by MP Seah Ki:m
Peng and a group or ten MPs (at http://appl.mC)-s.goug/MCYSr\ews/
Amtnd111en1s10MPAPassed. aspx).
The Bill 1s miliolly introduced in Parliament at the First Reoding. During
the Second Reading. the Ministers usually outline the objectives or the
Bill. dcCend the Bill and answer queries robed by the bockbcnc:hers. The
Spenk1•r of the Parliament is tasked co rcgulnic tlw proceedings a1\d enforc:c
the Standing 0 1·ders of Parliament. 'The MPs may, i11 some cases, decide to
refer the Bill to n Select Committee for scrutiny. If the Select Comminrc's
propo>cd amendments to the Bill ore approved by the Parliament, the Bill is
accepted by the Parliament at the lhird Reading and i> passed.
3.10
3. 11
The Pm1dcnhal Council for
Right< ("PCMR"), est•blish.d under
the Singaporr Cons11tu11on and presently chaired by the Honourable Chier
(cxctpt for ucmptcd ones) for any
Ju•ttee, has been tasked 10 scrutinise
measures whteh may be disadvantageous to
of any racial and religious
co111111un111es without being equaJJy disadvantageou• 10 persons of 01her such
co1111111mit1c<, either dlrec1ly by prejudicing per.on> or that community. or
indirectly by giving advantage 10 person> of onother com111u1Hty. If •he report
of the PCM R is favourable or a two- thirds mnjority in l'arhtunent has been
obtained to override t111y adverse rcporl of the PCM K. the lllll proceeds. as a
inaner or course, for the assent by the EP.
Upon the •sscnt by the EP. the Bill is formally enacted as "written
'The legislation does not, howe\·er. come 11110 force until the dote or its
publication in the
Gn:tllt or the: co1nmencen1ent date
•pec1fied m the legidauon or th• Gnutre no11fica110n (s JO Interpretation
Act (Olp I, 2002 Rev Ed)). The enacttd law I< known .L< primary or
parent leg1slat1on (or an Act of Parliament). An Act or Parliament may
supulatc thnt a particular Ministry or agency h•< powtrs to promulgate
sub>nhary legislation to implement the <1a1utory provisions, providtd
such >11bsldia1·y leghlatlon is not inconsistent with the Act or Parliament.
'l hc subsidiary leglsla.tion is usually publish(·d in the Go11ern111e111 Gazette.
Figure 3.2 >hOW• the sequence of th(• typical >t•g('> In parliamentary law·
Princ1plts of Singapott Busintss law
First Reading
Bill is introduced
Second Re ading
Bill ls deboted
,......
I
I Bll I is referred to a committee
for de tailed consideration and
.It____ame ndment, where needed
-------+!..
I
I
Third Reading
Amendments to Bill, ii
any, are debated before
Bill is put to a vote
I
I
I
------------------···········J
Presidential Council for Minority Rights
Bill ls scrutinised to ensure no racial or
religious community is dlsodvMtogod
Presidential Assent
Bill receives Pcesldent's ossent and
becomes law (Act of Parliament)
Gazetting
Act of Pa rliament comes Into operation
on date stated in notification published
in Government Gatctte
Figm·c 3.2 Typical stases In parliam.,mlary law-making
Chaptt:1 3: legal PrO('tS.Ses and lnst1tut1ons
Princ1plts of Singapott Busintss law
THE EXECUTIVE
3.12
The faecu11ve con<isls of 1he EP ond 1he Cabm<1 1n whom n<eutiw powers
ore vesled. The head of the Executn'O 1s 1he EP. The quahfica11ons for the
presidenunl office are fairly stringent. Apart from in1egnty, good character
and other requirements, the presidential candidate must have held one of the
following positions for not Jess 1han three years:
o
os a Mini>t<r, Chier Juslicc, Speaker of Parllomcnl. Allorncy-Gcncral,
Chairntan or Public Service Commission, Auditor-General, Accounlanl-
o
veto against budget• or >l•lutory boards and Go\'emmenl compantts
which are liktl)• 10 draw on pasl re.ervcs (Art 2211(2) and Art 220(2));
o
wilhhold a<..<enl 10 any !loll p.ssed by Parliamenl pro\'iding, directly or
indirrctly. for 1he borrowing of money, the giving of any guarantee or
the raising of any loan by the Governmem which is likely 10 draw on
past reserves (An l<l<l):
o
appoint 1he Prlme Mhti>ler (Arl 21(2)), specified co11>1l1u1ionol
appointees (eg, the Chief J11,1ice and 1hc Allorney· Gencral) and 01her
key civil service appointments (ci;. Cornmissio11<r of l'olire) (Art 22):
Gcncral or Pcrn1ancnt Secretary; or
o
o
os chief exocutive of a key s1a1u1ory board and government company
•1>cclfied 111 1he Conslitution or a 1>erson wilh comparable experience
and abih1y, and tl1e pe™>n has 1he ex11crie11ce and ablhly 10 ctfectwely
carry oul the functions and du1ics of the office of Pres1den1; or
3> chief rxecullvc of a companr which has a sharthold.rs' l'<)Uity of
al lrasl SSSOO million, and has made profit. {after lax) for the
abovtrnentioned ptriod; or
o
The Pre$lden1ial Elections Commillee has been sel up 10 ensure 1he above
requ1remcn1s :i re adhered lo. The EP is elected for ii six-year 1erm. He or she
I> lo nc1 in accord:mcc with 1he advice of the Cnb111e1 in discharging 1he EP's
con.1i1u1 io11al rune1lo11s cxccpl in specified arens. 'l11c llP may. In his or her
discretion:
withhold consent 10 • requ«I for a dissolu1ion of Parliamen1 (Art 21(2));
o
concur wilh the Director of Corrupt Prnc:tices lm·cs1iga1ion Bureau to
make any inquiries or 10 carry ou1 any im·estigations 11110 any onforma1ion
receh-ed by 1he Direclor. no1wi1lu1a11ding the Prime Mini<lrr's refus;il 10
consent (Art 22G):
o
exercise ctn:un power-i. pert;a.in1ng to rest raining orders m3de under tht
Maintenance of Religiou• I l.irmony Act (Cap 16iA, 2001 Rev Ed) where
the Cnbine1·, advice is con1rnry to that of 1he Pres1denlial Council for
Religious H:irmony (Art 221).
an otlice in a private st'clor organt>OllOn 111 whkh 1hc officeholder
posscs:>e• comparnblc experience and ability 10 a chicr executive of a
abovemcn1io11cd minimum >harcholdcl's' equily, and
company wilh
lhnt olTicchoJclcl' hns lhe t'XJICl'icncC nnd ;1bilit)' lO effcclil'd )• rnrry OUI
1hc runctions and duties or the office or President.
A new Con.<\llYti11m1t provi;ion pas.<ed In 2017
the Pmidemi;tl
elewon is 10 be reserved for a community (such •• 1he Chinese. Malay.
Indian or 01her minorily commu1111y) if no peNOn bclongmg 10 1ha1
commu111ty has held office for the fivr mos1 rec<oll l<rrn> of office of 1he
President. 'lhe 2017 presidential eleclton' was one such reSCF\'cd el<e1ion
{for 1he Malay community). Madam Bahmah Yacob "a• rleclrd unopposed
a;, 1he 01her two Maia y
did nol >all>fy 1he pro\'ale sector thr<>hold
rcquircn'lcnb.
o
There are also counter-checks on the presidential discretion (eg. Parlrnmenl
overruling, via n 1wo-1hirds majority of the 10101 number of clcc1ed MPs. 1he
presiden1ial decision In cen ain ln>lances). In discharging cerlain specified
conslitulion•I funct ions, the President Is required lo consult the Council of
l'mi<lcnlial Ad,1i><r>. d body set lip under the Singapore Con>litulion. In
other cases. 1he Elec1ed Pre<idc111 may in his discretion consuh 1he Council
of Presoden11al Ad,<isers.
J. 13
'lhe Cabincl, consisting of Min1s1crs under the helm of the Prime M1n1s1er
(currently Lee Hsien Loong), 1s coUecll\'C))• responsible 10 lhe Parh•menl
·rhe Prime Minister i< sotnrone 1he FP appomu 1f 1he EP find• him likely 10
command 1hc confidence of 1he m•jority of the MPs. lhero is no complcle
scpara1ion or power. between 1hc Exccu1ive nnd Legisln1urc in Singapore.
In 1crons of co11111osi1ion. member. of 1hc Cabinet arc typically drawn from
the Mi's. Parllamc111ory Sccrciarics urc furlhcr appoinled from amongst 1hc
MPs lo assist the
Moreover, ,1s oncnlioned above, the Minislcr>
a nd the relevanl Government ugcnclcs
some "law-making" power. In
the prornuli;al ion of >Ubsidiary lcghlaiion in order lo implement 1he parent
legislation p•ssed by 1he J•a1liamcnl.
Chapter 3: legal Pro.cesses and Institutions
3.14
Each Minister is usually responsible for all go\fernmem mat1ers pertaining
to o ne or more port.folios (such as educat io n or tradt and industry). In
Parliament, the responsible Minister will have to justify the policies
implemented by his o r her Minist ry. and is t hus accountable to the
Parlian1c nl. For lhc purposes of this c hapte r. one significant Ministq1
which should be mentioned is the Minislr)' of Law, which comprises the
statu tory boards of the Intellectual Propen y Office of Singapore and the
Singapore Land Auth orit y. Some important d epartments and bodies u nder
the responsibility of the Ministry of Law include t he Leg:il Aid Bureau,
Insolvency and Public Trustee's Office, Appeal's Board (Land Acquisition)
and the Copyright Tribunal.
3.15
The Government Is advlie<I and reptesented by the Anomey-Ge nel'lll and
t he Solicitor-General in both civil and criminal matters. The AttorneyCeneral possesses wide prosecutoria) discretion. that is, t() institute. conduct
01· discontinue any proceedings for any offence (Art icle 3S(8) Constitution).
The prosecutorial discretion is not absolute o r unfettered but s ubject to
co1lstitutional provisions on fundan1cntal rights of the individual (see Lnw
Soriety of Singapore 11 T1111 G11111 Neo Phyllis (2008)). liowevcr, Ihe AttorneyGeneral is not obliged to disclose the reasons for his prosecutoria I decision
in a particular case (.s('·(.I' Rnnralingrun RavinlhrfHJ v 'lhe
(2012)).
The Attorney-General is appointed by Lhc EP if the EP, acting in h is or her
discretion. agrees with the advice of the Prime Minister. The Honourable
Attorney-General Lucien Wong SC was appointed wilh effect from l4 January
2017. There arc spcdul divisions within the Attorney· Genernl's Chambers
(W\M.agc.govsg) dct1l ii1g specifically wi1h the drafting of legislat ion, law
refonns. fin;.1ncial and technology c rhne.s. civil law 1natters and international
affairs. 'Inc Attorney-General's Chambers is staffed by State Counsrl und
Deputy Public Prosecutors who belong to the Singtipore Legal Service.
T HE ) UOICIARY
3.16
'lhe pr imary ro le of the courts in Sinsapore is Lo adjudicatct disputes
between the litigating parties and serve as tlll independent check on the
Legislnture and the Executive within t he adjudicati\•e process. The Judiciary
is l"n1powered, for instance, to review the constitutionality o f leghslation as
49
Principles of Singapore Business law
well as to review the deeisions and aetions of administrative authofities. As
stated by 1he Court of Appeal (at 186)) in Clrng Sun11 1ze v Mi11istc1· of Home
Affair$ ( t98S), '"the notion of a subjective or unfeltercd discretion is contrary
to the Rule of Law. All power has legal limits and the Rule of Law demands
t hat the courts should be able to examine the exercise of discretionary
power:'
Acc<>rding to the Constitution, judicial power is vested in the judges of
the Sup reme Cour t and the State Courts. The judge is the sole arbiter of
both facts and the law, the jury sysLem having been entirely abolished in
Singapore since 1970. In t he course of adjudica1ion, the judge would
be required to interpret and apply various sources of law such as the
Cons1ilution. legislotion and prior courl decisions in order to distil the legal
n>le o r pl'inciple applicable to the pt1r1icular {acts of the case.
Box 3.1
What is your verdict on the Jury system?
Some ot the common criticisms of the jury system are as follows:
Juries tend to decide on legal liability or co1w1ction based on prejudiced or
stereotypical views and/or moral opinions.
There Is a danger that juries may be ovNly influenced by a lawyer's g lib
tongue.
The lack or availability of competent jurors.
The costs in Instituting and maintaining the iury system.
On the other hand, supporters ol the jury system and Lrials have raised the following
The right to jury trial should be regarded as a significant h11man liberty.
Jury trials arc important In directly involving the ordinary man in Lhe
administration of justice.
The •strength in numbers" argument: for very serious offences such as
capital offences, the legal system should be slow to convict an accused
based on the decision of one single judge, as compared to the majority
decision or the jury panel.
Question: Do you think there should be a right to jury lrial In the first place? II so, to
whal extent, ii at all, should there be restrictions Lo the right Lo jury lrial?
50
3: Ltgal PrO«'SSt'S and lns11tuuons
ilecisis.
which means "standing decision")
judges 10 nbide by 1he
previous decisions 1mdc by the superior courts within the cou rt hierarchy.
The Common Law Tradition
3.17
Under the common law tradition, the judge is required lo consider
the relevance and erTccl of previous court decisions in order to dtcidc
the outcome of the case in accordanct with the doctrtn< of 1udioal
precedent. Th< common law tradition 1$ one of the maior ltgal traditions
in the world, apart from 1hc chit law. socialist and other religious legal
trnditions. Singaporo has i1s roots m 1hc English common lnw iradition
3.21
the court hierarchy as judges arc not pumuted to roach • decision in
" dispute ba>ed merely on his or hcr whim or fancy, but on prior court
decisions. Second. the resulting uniformit)' and consi•tency • lso lend a
measure of w·tai111y to the law for potential lil igants. Third, the doctrine 1s
consistent with the mpe<t nccartfcd to t/1c l1irrnrchy within the court sy<tcm,
which is usually bJ<cd on the experience and ;eniority of the Judge;.
and enjoys tlu· conco1nitant adv..-ntases of stability, ccrl"inty and
intCrtlllliOnlllist11ion of t he Brilish •Y•lcm. Whils1 Singapore ; hares wilh
countries such a> I ndia, Malaysia. Myanmar and Brunei the English
common law roots.
actual apphcot1on and workings of th< traditions
J.22
wtll vary in rach coun lr)'·
3.111
J. 19
t)
3.23
generally more evident in certain
orns (such as contr-Jct, tort and restnuuon) compared
common law
othC'r statutcb•scd areas (such as criminal low, company l•w and the l•w of ""idcncc).
With respect 10 the latter, 01her juo isd1c11011s such as India and Au,1ralia
have influenced 1he loitcrpretation of these .<tatutes. However. the Singapore
courls have, In r<ccnt limes, significantly deparicd from the English
common h1w In ;pecific areas such as In t h< low of conlrJCI and torts. There
1s now a grtater recognition of local )umprudene< on 1hr dcvrlopmenl
of thc common bw in Singapore.
10
The Doctrine of Judicial Precedent
3.20
'lhe doclrine of jud iciol precedent Is 111tegral lo a common fow 1urisdicticm
such as Singapore. ' lhc doctrinc of judich1l prccedenl (also known as start
51
IS
simply • co11d11sio11
rC'cover the "rcw.mh".
'lhe strong influence of the Eng.lish common low on the development of
Smgapore law
How is a judicial demlon reached? A 1udicial decision
lhal resoh«• a legal dispute; such • conclusion i> i1wariably ba.d on
a /egnl prmciplc applic<l to the particular fncts of the dispute. l'or insiance,
Lhe legal principle may be 1hat "a man who commits a cr1111111nl act cannot
profit from the criminal act''. 'I he fact> <1f t he dispute Jrc thnt X has
committed a cruninal act and seeks lo n•cover thr "rewards" obtained from
the commission of 1he criminal act. Hence, the judge may. •pplylng the legal
principle to the facl.< of the case, concludc that X shall not be entitled to
His1orically. 1he English common low iradition arose out of n need for
England 10 develop laws to be applied equc1lly to litigants in similar disputes.
As o resuh, a»ize and later, circuit Judges. who were scnl lo various parts
of England to •dJudlcate disputes, applic<l the same laws to the resolution
of the disputes before them. Further. these laws would be the same (or at
ltast similar) regudless of the provinces or geographical area5 in which
the disputes took plact. As a result, a "common" Jaw gradually developed
1hrougho111 the whole of England.
The doctrine promote; firstl)' u11iformity and co11sis1<11<y of decisions w11hin
The legal principle(•) upon which the ju J ge's conclusio11 is based, is
1-rferred 10 as the rntio tfecirle111fi (or "the reason for the deci>lon"). Hence,
In the above cxnmple, the legal principle that •a man who commits a
criminal act cannot profit rrom the criminal act" is thc rtJtio drddmd1
for the
of the iudgc to disallow rcco\'ery by X. Ol11tcr rl1<1111n, on
the other hand. means a statement ·made by the way" (or a "peripheral"
or an "incidental" •tatement). Oliitcr di<t11111 refers to o legal principle or
Judicial sll\lcmcnl thnt is 1101 directly applied to n.rrivc nl the outcome in
n case.
J.?4
' lhr detenninatton of the ratio cltcultntli and the obittr 1f1<1um can be
slgniliant. tf the particular legal principle or statemen1 111 a previous
decision is regarded •s ratio dmdcrodr, then the Judge has to abide by tht
rflt10 tftdde11<fi of the prior decision. as;uming that the previous decision is
onade by n higher c()url with in t he co11r1 hierarchy. In legal parlance. we
that the rlllro dcdtfentfi in the previous decision by a higher court is
..binding" on :1 lower court. If. however. th4' JcgJJ principlc m a previous
decision Is merely regarded as ol111<r il1ttum. the judge
not rcquortd to
52
Chapter 3: legal Pro.cesses and Institutions
Principles of Singapore Business law
Singapore. Currently, lhe Si11gnporc Lnw Reports is the main law reporter for
Singapore. ·1his was first published in 1992; prior to that, reports of local
cases were published in the Mnloyn11 Law /ournol since 1932. The judgme11ts
of the Singapore courts can also be accessed via a LAWNET subscription
at W\\'w.lawnct.co1n .sg. Reccnl judg1ncnts of Lhc Suprcrne Court and the
State courts can also be accessed free of charge at Singapore Law Watch
(at htlp://www.singaporelawwatch.sg/slw/ index.php).
apply the obiter dielum in the present ease, even if the previous decision is
made by a higher court within the hierarchy. In legal parlance, wc say that
the obiter dic111111 is merely "persuasive·: and is not bindi ng on the judge.
3.25
·n1e doctrine of judicial precedent applies only to court decisions within
the same court hierarchy. Hence, prior coon decisions from England and
foreign Con11nonwealt h jurisdictions (such as ;\ ustralia, Malay5ia, l ndia,
Brunei and Canada) arc nOl binding on Singapore courts. In practice,
however, Singapore courts do treat relevant decisions from English and
such Commonwealth courts as ''persuasive·: though not "binding''. For
instance, decisions from the U K Supreme Court (formerly the Mouse
of Lords in England) and the High Court of Australia respec tively are
generally "persu.1sive" precedents for Singapore
Co mmon Law and Other Legal Concepts
3.29
adjud kaling a
similar
3.26
3.27
A situation n1ay arise where the fncu in Lhe previOU$ decision upon which
the rfltio decidendi is based may be materially different from those in the
present case. Hence. the judge may regard the facts in the prior decision
as being so materially different that the rnlio decidondi of that previous
decision should not be followed or applied in the present case. In legal
parlance, we say that the judge has "distinguished" the prior decision from
the present case.
( 1) Common law versus equity
3.30
In sum1llllry, under the doctrine of stare decisis, the ratio decidmdi contai11ed
in the previous decis ion by a higher court binds the judge in I.is or her
adjudication of the pr·escnt dispute. However, the doct rine docs no t apply to
bind the judge where:
o
·ro avoid confusion, we should notr thal the term "conunon Jaw" 1nay
be used !Is a contrast to or comparison with ot her legal concepts such as
equity, written law, the civil law tradition and criminal law. For complete·
ness. we also discuss the diffrrrnccs between civil nncl c.ri111inal laws in
para 3.36.
lhe focts <>f the present dispute can be t'l''laterially "distinguished.. fro1n
the facts in the previou> d<·cision of the higher court so as to render the
ratio deddcndi of the
decision inapplicable; or
1-listorically. in England, equity as • body of principles of fairnt·ss or justice
was employed by the courts to ameliorate the defec1s or weaknesses
inherent in the rigid conunon law syste1n. In order for a clairnan1 •o bring
a claim under the common law in l':ngland, he or she had to file a form
known as a "writ" in the English courts according to rigid prescriptions. A
case which could not fi t into the inflexible categories under 1he writ was
thus thrown out. 't his meant lhal the claimant had no remedy, Hence, 1he
Lord Cha11ccllor was tasked to provide new writs to cover claims which
cQuld not fit into the rigid categories under the then prevaili ng common law
'A'rits. Despite initiul con1plaints about the perceived
or discret ionary
power conferred on the Lord Chancellor, the rules and pract ices of equit)'
u tilised by the Chancery Courts gradually became more formalised and
institutionalised.
o the legal pd nciple embodied in the previous decision of the higher court
and sought to be npplied to the dispute at hand was merely obirer dirrw11.
:i.nd hence not binding on the lower cou11.
3.28
The p1·oper functioning of the doctri ne of slilre dcrisis depends on lhe
publicmion of judici al precedents in :t form accessible to the courts,
Jnwyers and perhaps C\ICn laypersons. Mcnee, law reporL;; oontailling prior
court )udgments are vital for the development of the common Jaw in
53
3.31
According to the Singapore Civil l,aw Act (Cap 43, 1999 Rev Ed), the
Singapore courts are empowered to adn1inisler tht cornmon l.aw as \veJJ as
equity concur1·e11tl)'· 11ic practical effect is 1ha1 a claimant can seek both
common law remedies (damages) and equitable remedies (injunc1ions and
specific performance) (see Chapler 18) in lhe same proceedings before lhe
same court. It should also be noted that equity has played a decisive role
in the development of specific doctrines in the law of contract, Including
54
Chaptt:1 3: legal PrO('tS.Ses and lnst1tut1ons
1he d0<1r1111!$ of undue influence (see Chap1er 14) and promtSSOr)' es1opp<>I
(Chapter 8).
Princ1plts of Singapott Busintss law
(4) Civil law versus criminal law
J.36
(2) Common law veuu s written law
3.32
1he concept of "com mon law" can also be co111rasted with the notion of
"wriltcn
In Singapore, "written law" refers to the Constilulion, Acts
n11d >ubsidiary legislation, whilst "common lnw·: in this contex1, refers to
judge•madc lnw or cnse law. The wrillen laws of Singnpore can be accessed
either via the website of the Attorney-General'• Chamber> (www.agc.go,•.sg)
or vin 1,AWNBT (htt1i:l/www.lawnet.com.sg). 111e law-making process by
the l.egaslature has been discussed in para< 3.9 3.11.
(3) Civil law tradition versus common law tradition
3.33
The common Jaw sy>tem m Smgapore bears matenal dtffercnccs from that
tn •ome A<ian countries which have
the cml law tradition (the
People-. Republic of China, Vietnam and "lha1land) or those with a mL•ture
or CIVIi and common la"' traditions (the Ph1lippme<),
3.34
Firstly, the covil law systems generally place relatively less weight on prior
judicial deci>ions and d<> not abide by the doct rine of stnre decisis, unlike
the common lttw system as described in porns 3.20-3.28. Second, the
common law courts <>f Singapore generally adopt an adversanal approach
in litig;1tion betwem the disputing partic•. whilst the civil law judges
tend to take a 11101'<' active role in the finding or evidence to d ecide the
OlltCOme of the CJISe. Thtrd. whilst numerous legal prtndples have been
developed by common law judges, ci-.1 law iudges •re more reliant on
gcncr.d and comprehen>1\'C wnlt<n code$ governing a wide sp«trum
or areas.
3.35
H•vmg said that, the dh"<rgence between the common law and cMl law
sy>tem• Is now less marked than in the past. Common law jurisdictions
have, for instance. -embarked upon legislative progriunmes to fill the
perceived gaps of lhe common law. In this regard, Singapore ha.s enacted
Vltrious >latute> to govern many >pccific areas or law, >licit as the Contract
( Rights of 'l hl rd l'al'lics) Act (Cap S3R, 2002 Rev Ed), Compe1itlon Act
(Cap SOI!, 200(> lkv Ed), Consumer Protection (Fair 'l'r1>d ing) Act (Cap 52A,
2009 Rev Ed), Workplace Safety and I kalth /\et (Cap 354A. 2009 Rev Ed)
and 1hc Employment Claims Act 2016 (Act 21 of 2016).
SS
A criminal cas< is prosecuted by the State against the accused person.
whereas • civil la1,;u11 " 1111llatcd b)• one party (the plaintilf) ag>mst the
other disputing party (the defendant). Second, the gttrtral purpose of civil
law is to compensate the innocent party for the damage. or los>es which he
or she has suffered or mcurred arising from the alleged wrongdoing of the
o ther p•rty. However, in crim inal law. the p rimary purpose is to "punish"
o r deter polcnti:tl crilnlnal11o fro1n co1111nilling offences. Third, we speak
in terms of "remedies" 111 civil law to com pensate the innocent party. In
c riminal law. the offender nuty sulfer the consequences of a jail term or a
fine by the slate or both; there i> gmcrnlly no direct compens•hon fron1
the wrongdoer to the vtetim for the crime committed under the cnminal
law (but note that < 359 Cnmtnal Procedure C<>de (Cap 68. 2012 Re\• Fd)
requires 1he court to ·coru1dtr.. whether to make victim comptnsation
orders upon conV1ction). Fmill)" 111 i crm1inal trial, the prosccuuon has to
pro,·e bqo11d reaso11al>lt doubt that tht
has committed the offtnce
as charged (Teo Kt11g Po11g v Public Prosernlor (1996)). In a ci-.1 lawsuit.
however, the plaintiff has tO pro-e his or her case agamst the defenJJnt
merely on a balance of probnb1/i11<s.
The Court Structure and Hierarchy In Singapore
3.37
"lhe Singapore Judiciary consists of the Supreme Court ond the State
Courts (se( Figure 3.3}. 1hc efficiency and strength of the Sinjppore
Judiciary have won her several occolades and a strong international
repulation, as evidenced by the pubh,hed rankings of the world's legal
b)' the
and &onomoc Risk Consultancy ("PERC") and
the Institute for Management Dc"elopment. linder the leadership of the
formor Chitf Jusuce Yong Pung How and the former Regi<trar o( the
Supreme Court Chiam Boon Kcng. >tnct case management and alternat1ve
dispute resolution ("ADR") m<thods (sec Chapter 2) ha\'e drastically
reduced the
a«ociateJ with the backlog of coses in the
ca.rl)' 1990s. Chan Sek Kcong. Singapore's Lhird Chief Ju.tice. who was
appointed to heod the Judiciary from 11 April 2006 to 5 November 20 12,
i.inple 1nented vnd ous progrn1nmcs \\•ilh
:i
view to e nhnncing access to
justice and subs1tm1ivc j11rispruuc11cc in Singapore. including 1hc
ment of commu ni1y courts 011d the appointment of spednhst Judges 10
handle complex co>es wtthin the State Courts. The present Clucf lust1ce.
S6
Principlts of Singapore BusintSs law
Chaptt1 3: Lt9al Prousst's and lns1i1ut1ons
Supreme
Coult
Following 1hP abolition of a11peals to 1he Pri''Y Coundl since 1994. the
Singapore Court of Appcal ts the highesl court in the land. lhe Court of
i\ppeal enjoys both appellate civil and crumnal jur1sd1cuon arising from
the decisions of the High Co11r1 and the Stnte CourL'- 'The Court of Appeal
comprises the I lonourablc Chief Ju>ticc and Judg<(s) of App<al. As the
h1ghes1 court of 1he land, the Court of Appeal is mstrumenial 1n mamta1111ng
and enhancing the adminiS1ro1ton of JUSl1Ce as well as the jurisprudenual
development or Singapore law.
3.40
'!he Practice Statement on Judicial Precedent issued by the Supreme Court
on 11 Juli• 1994 outlined the rtlevmce of prior Privy Council 3Dd Courl
of Appeal dcc1<1ons in Singapore. h s1a1ed 1ha1 1he Court of Appeal should
not be bound by its own
decisions nnd 1hose of the Privy Council
which, prior to 8 April 199•t, were binding on it. "where adherence to >UCh
prior decisions would cause injusttce in a parhcular ca<e or constrain 1he
devclopmenl ol law in confonni1y wi1h 1hc circumsunces of
'l hus, the Court of Appeal will continue 10 1rcat >uch prior decisions as
normally binding but will, whenever ii oppea1s right 10 ,10 so. depart f10111
such prior dcci•ions. Bearing 1n mind the danger of retrospectively disiurbing
contractual. propri<tary and 01hrr legal righls, this power 10 deparl from
prior Privy Council dcclSlons will be exercised sparingly.
3.41
Aparl from hearing ca>cs al first inslancc. the lligh Courl also Imm civil
nppcals from 1he Oistricl and Magistrotcs' Courts as well
other tribunals
:1s prescribed by the WT11ten law. h also has appelfa1e cnm1n•l jurhd1c11on
over criminal appeals: fron1 the
a11d Nlagistralc)· courts and in
respect or points of law rc;crvcd by spcch1l cases submitted by the Dls1rlc1
I
.
[
I
Hogh Coult
(including N SICC)
I
I
State
3.39
(oncluding 1hl
COlll1S fomiy Counl)
I
I
I
I
Mag..ntH'
Counl
Co<onon'
Counl
y...,,
TI
Smal
Col.wit
a....
I
Commt.nory
Counl
Figure 3.3 Th• Judicial hierarchy in Slngopore
Sundarcsh Menon. who 1ook the helm on 6 November 2012. has been
instrurncnlnl in spearheading 1he cstnblishmenl of 1he Fan11I)' Jus1ice
Coml> (FJC) (which comprise 1hc forme r Family Division of the High
Courl. Family Court> and Youth Co11r1>) in 2014. Tht FJC w;i, t>1ablished
wnh • view to encourogc pa.rites to mediate thc1r famil)•·rebt<d disputes
and for the judges to lake on • more pro-active role in dorccling lhe
courl proceedings. In 2015, Chief Justice Menon launched the Singapore
ln1crnatlo11nl Commerci•I Court (SICC) to resolve dispules ol an inlern•tional ind (ommercial nature ba<cd on 1he
and C'>tjl(riencc
of the Srngapore Supreme Courl judges and in1crnational 1uris1s from
foreign count ries.
•>
nnd Magis1<Jlc$' courts.
J.38
1he Supreme Court comprises bolh the High Courl •nd 1he Court of Appeal
(Supr<me Court of Judicature Act (Cap 322, 2007 Rev Ed)). As of M•y 2019,
there were 20 Judge• (including four Judges of Appeal and 1he Cl11ef Justice},
sev,·n Judicial Comml » iOncrs and foul' Senior Judges on 1he Supreme CQ<11't
Rench. Within the Supreme Courl, • Cons111ut1onal Tribunal
also been
sel up 10 hear quesuons referred 10 the 1ribun•I by 1he Elec1td Presidenl
on the dTcct of provh1ons of the Consti1u11on 'Inc admhu;tration Qf
ju>lice in the Sup•cine Cour1 is a«slsted by the Registrar a11d a team of
deputy registrars, senior assistant rcgiitrars and lt>sistant rcghtrnrs, Since
1991. Ju>licc> Law Cieri..• have b«n appointed 10 provide research as;is1ancc
10 1he Supreme Court 111dges.
57
J.42
lJnJcr the doctrine of judicial precedent. the Singapore lhgh Court 1s bound
by the prior decisions of the Court of 1\ppeal, unless 1he Migh Courl judge is
"blc to ;how thnl either of 1hc exception> slOlcd in para 3.27 apply. However.
•t is 1101 bound by its own pre' 1ous decisions.
3.43
'l he High Courl judges enjoy security oflcnure, whil'I Judicial Commi»1oneN
a 1·e appoin1cd 011 a shorHcnn co111rnc1
Both. however, enjoy 1he
s•me judiciJl powers and l111muni1ies. Their Judicial power< comprise bo1h
original and appellate juri>dicllon over bolh civil 3Dd rnminal malltN lhe
tllgh Court Judges and Judicial Commis>loncrs posses. expertise in nrlous
58
Chapter 3: legal Pro.cesses and Institutions
Principles of Singapore Business law
scn
specialist areas sueh ns Building and Construction, Shipbuilding, Complex and
onl)' $20,000. provided the disputing parties consent in writing. The
Technical Cases: FinaJ1ce, Securities. tlanking, Complex Commercial Cases:
Company, IMolvency, Trusts: Intellectual Property/Information Technology;
Shipping and Insurance: and Defamation, Professional Negligence. Statutory
Tort.
hear claims in respect of contracts for the sale of goods and the provision of
services. tort claims in respect of property damage (excluding those arising
out of or in C(,H1nection with che use of a nlotor vehicle) and disputes relating
to leases of residential premises for a lease period of two )'Cars or less.
3.44
The State Courts (consisting of the District, Magistrates'. <Coroners'.
Community and Youth Courl< as well as the Small Claims Tribunals)
have also been set up within the Singapore judicial hierarchy to <\drninistcr
justice amongst the people (State Courts Act (Cap 321, 2007 nev Ed)).
'!he administration of justice within the State Courts is aided by a team
consisting of the Registrar and deputy registrars.
3.45
'l hc District Courls and thr Magistrates· Courts share the san1c powers over
specific mauers such as contractual ot tortious claims for a debt, demand or
dan1age, and actions f'or the recovery of rnonies. However, lhe jurisdic1ional
1nonetary li1nits in civil rnattcrs for thet Magistrates' c .ourts and Dist rict
Courts are $60.000 :.llld $250,000 respectively. 1l1e courts also dilfer in
terrns of crirninal sentencing powers. lrnprh•on1nent terins ilnposed by 1he
Magistrates· CourlS
lirniled to three
whilst the li1nit itnposed on
the District Courts is ten years (s 303 Criminal Procedure Code (Cnp 68.
3.48
Another of the State Courts - the Commu nity Court - wos established in
2006 to deal with particular l)'pcs of cases (youthful offenders, offenders witli
mental disabilities. neighbourhood disputes, :attempted suicide cases, family
violence. carnal connection offences by youthful offenders, abuse and cruelty
to
and cases in1pacting race relations). One in1portant purpose of
this court is to allow such offenders lo reilltegratc more successfully into
the community through the use of long-term community-ba$ed treatment
rather than imprison 1nent. where appropriat.e. Sub.sequent legal refo rn1s in
2009 have also enabled the Community Court to utilise more graduated
sentencing oplions (su(h as comrnunity service orders and day reporting
o rders) to deal with minor offences.
3.49
Other courts include the Subordinate Military Courts which hear cases at
first instance involving 1nilil:.u y offences. Appeals against the drdsions of
the Subordinate Mililar)' Courts arc heard by the Military Court of Appeal.
The Industrial Arbitration Court was established to conduct arbitrat ion
proceedings wit h n:spcct to trade disputes involving lradc unions and
employers. 11ie Syariah Court admillisters Muslim law in specific personal
legal matters governing morriages, divorces. tile nullity of marriages. judicial
separations, disposition or division or property on divorce or nullity or
marriage in respect of Muslims or parties married under Muslim law.
The High Court, however. has concurrent jurisdiction wit h the Synriah
C:ourt on specific nlaltetrs relating lo maintenance, custody and division of
propert)'. subject 10 the parties obtaining lcav·e of the Syariah Court prior lo
c:o1nn1enci ng proceedings in civil courts.
20 12 Rev Ed)).
3.46
With the increased sophistication in business transactions lUld lnw, the
Commercial Civil and Criminal District Courts within lhe Stale Colll'L< deal
with more cornplex ca.ses. Law acadc1n ics nnd practitioners with the relev:.int
expertise have also been appointed as specialist judges on an ad hoe basis to
den! v>'ith specific complex cases.
3.47
We should also men! ion briefly the main roles ond functions of the other
Stl1te Couris. 111c Family Court. which is a District Court, dleals with
divorces, 1naintenancc, custody. adoptio ns nnd applications for protection
and exclusion orders in fomil)• violence cases. 11le Youth Cour ts hear cases
involving offences com m itted by yout hs and seek to re-integrote the youths
back into their fa1nilies and the co1nmunily. 1he conduct of inquiries to
detcrmlnc whether Lhe deceased pcrson(s) died of unnatuntl causes is
withi n the purview o( the Coroners' Court. 1i1e Small Claims Tribun:.1ls
("SCTs"} offer a speedy, cost-effective and informal process (without legal
rcprescntntion) for Lhc disposition of small claims with a monetary limit of
59
Technology and the Courts
3.50
'Jhe Singapore Judicinry as a whole has token big strides in adopting
information technology. The Electronic Filing System ("El'S"), a joint project
by the Judiciory, Singapore Network
and the Singapore Academy
o f Law. has, in the past. enabled the filing. ('Xtraction nnd service or
court documents '" well llS the tracking of Clise information by electronic
60
Chapter 3: legal Pro.cesses and Institutions
Principles of Singapore Business law
means.
to a n EFS review in 2003. the EFS was
as
the Electronic Litigation Systems ("ELS") in order to further integrate
technology into the litigation process. lnforimtion technology innovations
have also been utilised to facilitate and streamline va1ious criminal processes
(including the payment of traffic fines and information tlow and exchange
between rhe State Courts and Home Team agencies).
3.52
Some of these approaches have been eneapsulated in the lnteFprclation Aet
(Cap l , 2002 Rev Ed). According to s 9A ln terpreLlltion Act, tl1e judge can
refer to, inter nlia, the explannlory stateme111 to the Bill, 1he speech made
by the Minister in Parliament as well as the Parliamentary debates for the
following pllrposes:
o
Certain technologically enabled courtrooms (Technology CouTts) were
set up to enable !lie sharing of information h)' lawyers and judges nnd
the giving of evidence by \-.ritnesses via video conferencing. 11'1e Supre1ne
o
of court hearings withi near real· tilne 1ranscriptio n. l\1oreover, the Elect ro nic
Queue Management System pro1•ides a foir and orderly queue system in the
the pro vision is an1biguous or obscure; or
3.53
'TI1ere are also various specific 1echnical rllles which judges have used ro
inte rpret the written law, including:
o
cjusde/11 gencris rule: where general words follow specific words (eg, pens,
pencils, erasers and "•ny object whatsoever"), the meaning of 1he genernl
words will be confined to 1hc class given by Lhe preceding specific words;
o
nO$Citur a socUs: lhh; involves gnlhcring lhe n1eani11g of w·ords fron'I its
context, that i.s., via associatio n with its neighbouring wo rds (eg. buses)
"vehicles" and 1axis): and
'the jlldgc, in lhc course of adjudication, may be required to inlcrprct
the Ac t.s of Parlian'le nt or subsidiary legislatio n to reach a decisio n in a
particular case. A
fc"" general
to nscertai11 Lhe meaning of the provision of the written law if:
1he ordinary meaning of the provision wollld lead to a resuh 1hat is
manifc.<tly :ibsurd or unrea.<onable (ie, the golden rule).
Interpretation of Written Law
3.51
\Vritten law and the purpose o r
objective underlying the wrinen law (ie, a combination of the Ji1eral rule
and purposive rule); and
Court's Digital Transcription System allows for the digital audio recording
Supreme Court for chamber hearings before the Registrars. rt not ifies
h1wyers, on a first-come-first-served basis, as to when their cases will be
heard via display scr.eens located within its premises. Centralised Display
Management System (CDMS) iKiosks aJ'c displa)'cd in 1he Supreme Cour1
Bllilding 10 provide up-10-date information on hearing lists and court
schcduk s via the lntc.grarcd !Olcctronic Litiga1ion Sys1cm (cLitigation) which
was launched in 20 I 3 .
to co11fir111 the ordinar)' meaning of 1he provision of the written law,
taking into account it.s conte xt in
o
approaches to statutory interpre ta.tion have
expressio unius est cxc/11sio alter1us: words thal are expressly 1nent ioned in
a s1:1tute suggest an intention to exclude Lhose which h"ve been omitted.
been used by judges for this purpose:
o
literal rt1lc: the words in the statu1ory provisions should be <:onstrued
according to their plain and ordinary meaning:
o golden rule: Lhe literal rule should be followed llnless it leads to an
absurd result:
o
o
/llisdiicf r ule (also known as lhe rule in Hcydon's case (l584)): 1hc words
should be comidcrc1i in the lig)11 of the mischief which 1he enactment of
the Jegislmion was tlttempting to remedy: and
n1lc;
or ol*'t underlying the
exa1nined to ascertain the n'leaning of the
Acl (Cap I, 2002 Rev Ed)).
61
shoulg be
(sees 9A Inteirpret:u ion
T HE LECAL P ROFESSION, LEGAL EDUCATION ANO O THER
PROFESSIONAL B ODIES
3.54
"01e legal profession in Singapore is "fused''. This means the Singapore lawyer
1:nay act as both an advocate (to repre.sent clients in the courL-.) ns 'vell
ns a solicitor (to O>Sist cli<nts in out-of-cour t work >uch 3; preparing and
negotiating legal documcntotion). 'TI1e Singapore lawyer is a versatile creature:
he or she may serve a< " legal or judid lll officer in the Singapore legal
service or
nn in-house counsel of n company, or practbc law in a local
o r international h1w firm . Within the local set-up, Lhe lawyer may handle
litigation, corporate work. conveyancing and i ntellectual propert·y work.
62
Chapter 3: legal
3.55
Pro.cesses and Institutions
Principles of Singapore Business law
For the lawyer in private (legal) praetiee, one prominent fmure of the legal
The new regime will apply to law graduates from approved universities from
landscape has been the prolife111tion o r vehicles for the setting up of legal
practices and the facilitation of tie-ups am ongst the law practjces. Apart
fro m the sole pro prietorships and partnerships, the legal professio n has
also seen the creation of 1he Jaw corpOri1tion with lhc associated benefits
of lim ited liabilit)'. Limited liability par tnerships ("LLPs") in Singapore offer
another vehicle fo r legal practice. 11>ere also exists the avenue of for ming
joint law ventures ("J LVs") and formal law alliances ("J'LAs") between
a Foreign Law Practice ("FLP") and Singapore Law Practice ("SLP")
\-vith the attendant advantages of 1narketing the venture or alliance as a
single service pro,•ider and cent raliscd billing for clients. J'LPs li<:cnsed as
Q ualified Foreign Law Practices ("QFLPs") are entitled to practise Singapore
2023 onwards. Such law graduates will still be required to pass the Part ll
examinations in order to be adm itted to the roll of Advocates and Sohcitors.
Upon ad1nission, they 1nay serve as in -house counsel or governn1ent legal
oilicers but are not entitled to practise law 'in a Singapore law practice. If
they wish to obtain a practising certificate to practise law. they will have to
con1plete a I 2· ir1onth training contract.
3.58
Foreign-qualified lawyers with at least three years of relevant legal practice
o r work in Singapore or overseas 1nay apply for n Foreign Pracc-itioner
Cert ificate from the Attorney-General to practise in limited areas of
Singapore law such as banking and finance, mergers and acquisitions,
nnd int(•llcctual prnpel'ty law. 111is is subject to their passing the Foreign
Practitio ner Examinatio n (" l' PE"). Foreign ad vocates may be granted ad-hoe
adm ission to argue commercial disputes In the Singapore courts.
3.59
The Singopore Institute of Legal Education administers a mandatory
Continuing Professional Developme11t ("CPD") scheme for lawyers since
20t 2 which requires the young lawyers, a.< well as the more experienced
l.awycrs, in legal pract icr to attend courses LO ke<p abreast of the law and
related developments .
3.60
Apart fro m the law schools, the Singapore Institute of Legal Educotion,
and loco! and foreign law practices, two other im portant professional bodies
- ihe Law Society of Singapore and the Singapore Academy or Law should be specifically mentioned, ·1he Law Society (www.lawsociety.org.<g),
comprising primarily lawyers ill legal prac1ice, continue> to uphold and
advance the intercst.10 of the practising lnw)rers as well as to pro1note access
to justice. In respccl of cri111inal n1at1er.s, the L..aw Society of Singapore
o per;1tes the Criminal Legal Aid Scheme ("CLAS") for need y accused
persons. ·nie Pro Bono Services Office of the l,aw Society of Singapore,
established in 2007,
and 11d1ninis-ters pro bono initiatives
including CLAS, Project Law J-telp for voluntary welfore organisations.
Communit)' Legal Clinics at the Community Development Councils as
well as initiatives to raise public U\\'are ness o ( the law. Apart fro1n the Law
Sockty, the Singapore Legal Aid llurea11 (a governmem dep'1 rtment
establ ished under the l.egal Aid ;111J Advice Act
160, 20 14 Rev Ed))
provides civil
aid to Lhc needy based on .. 111erits" nnd "n1e:lns" te:-ots.
l:lw in certain permitted m as via Singapore-qualified snlidtors employed
by them,
3.56
3.57
A sound legal education is instrumental to the birth nnd mb.<equent
development o ( the Singapore lawyer. The Singapore Institute of Legal
Education (at http://www.sile.org.sg) was established in May 201 1 to
m aintain and improve the standard.< of legal education in Singapore. To be
adn1ittcd to the Singa pore Bar, an aspirant has to first attain thr s;tatus of a
..qualified person" by obtaining a law degree from the Natio nal Universit)'
of Singapore ("NUS'). the Singapore Management University ("SMU"), the
Singapore University of Social Sciences ("SUSS") or o ne of the approved
overseas universities of the United Kingdom, United States, Australia,
Canada and New Zealand. In addition to the Bachelor of Laws ("LLB")
programme, SMU and SUSS offer o Juris Doctor ("JD") progr::un mc fo r
graduates with a first degree fro m o ther disciplines. Apart from a foui--year
LLB program me, NUS also olfers a three-year gr;1d uate LLB programm e
for grad uates with a fiirst degree,
At present, law grndu:ates from the approved universities will be required to
pass o
o( post·grnduatc law exan1inations known as Part B exailninnt ions
and serve a six-month practice training period with a Singapore law
practice pursunnt lo " prac1ice training con1 ract or through work ns n l.eg;,ll
Service oflicer or under the supervision oi i\ qualifying legal officer. Upon
fulfilment of the above requirements, he or she can be admitted Lo the roll
of A•lvocates and Solicito rs. In 2018, the Committee for the
Training of Lawyers recon1mcnded a new regin1e which .separales ;id1nission
to the roll of Advocates nnd Solicitors from the qualificatio n to practise law.
63
64
Choptt1 3: l<g•I Proc<ssts and Institutions
3.61
The Singapore Academy of Lnw ("SAL") (www.sal.org.sg), established by an
Act of P.rllnmenl in 1988. ;eel<. to advanct the legal profe.sion as a whole.
hs members include p rnctismg lawyers, in-house counsel, government legal
officers and law acadcm1c.. The Prc>1denl of the SAL is the Honourable
Chief Justice. Current and >ign1ficant project> of th< SAL include the
promo11on of Singar ore law 111 the Asian region, the continuing legal
education of its me1nbers, law reform inuia1ives. 1he promotion of
altcrnall\'e dispute resolution. and the publication of law journals and case
law m the Smgapore Law Rcpor1s. Academ) Pubhshmg, set up under the
auspices of the Sing:iporc Academy of l_.w, haJ <1gn1ficantly contributed
to the drvclopment of local junsprudence with the publication of ,.,.,-ious
Singapore law books including
law, tort law, corporate law and
constitutional law.
CONCLUSION
3.62
'!'he maintmancc •nd dcvclopmcn1 of the legal institutions and their
processes 1n Singapore ttrc likely to be innucnccd by a combination of
factors: economic pragmat ism :rnd effic1c11cy, values of fairness and equity.
local circ untslances and evolving exiernnl conditions. In view of the relative
youlh of these legal l11stitu1lons. the willingness lo adnp1 and innovalc.
undcrglrdcd by fu11da111cn1nl principles such
the Ruic of l,,ow, will be
hnportant. Whilst 1he
and practice,) o( olher jurisdictions re1nain
a source of knowledge In this age of glob111isation. the Singapore legal
Institutions will nlso have 10 d•·velop niid modify their own solutions and
processes lo tllckle pl1rticula1• legal, socio ccono1111c, political and cultural
ls.ues approprit1le 10 !heir unique clrrnmstanccs.
6S
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PART II
Business Crimes and Business Torts
Principl.s of S ngapo<t 8"'1nm Law
Chapter 4
Business Crimes
4. 1- 4.2
4.3 4. 11
•1.12 4. 14
O VERVIEW
What Is a Crime?
4.1
A crinw is a wrong done 10 society. It ca11 take the form of doing a p rohibited
oc1 01· foili ng 10 do u required ac1. ll aliects t he well-being of soc1e1y :1t large
such that there is a public intere>I in the su pprossion of tho wrongdoing.
Cnnunal law
1he set> of ruks which Parliamcnl ha> kg.islated,
des1gnotmg c<rtam conduct as criminal and wrongs to socitty. This. m tum.
rai5<'> lhc question - wha1 is it that ltods to certain kind$ of conduct being
crimmal1scd over other., or why arc >Omc interests considered so 1mpomu11
as 10 w11rrant the pro1ec11on o f the
4.2
L11ws in a llemocra1ic socic1y ;ire created by people and arc not s1a1 lc. As
society evolves, so do its laws, Where 1he consequences of a par1ic11l11r conduct
a rc so po1en1ially grave (for imtoncc, murder ), the need for criminalisation
so •> to provent harm is without doubt. On the other hand. 1hcro has
a growmg trond of using legisbt1on 10 regulate conduc1 for re•sons of
exped1ency or endorsing certain pohcit>
Overview of Criminal Law
What is a Crime!
Objeaives and Undtrlymg Principles
Distinctions lmwccn Crime, Tort and Conlract
Anatomy of an OfToncc
I111roduction
4. 15
4 . I<>
4 .17
4. 18 ·4.20
4.21 - 4 .25
4.26 -4.28
Strict Liability
Corporate Criminal l.iab1lili•
Individual Liable wnh Compan)'
4.29-4.30
4.31
4.32- 4.38
4.39- 4.42
4.43 4.51
Crintt.>
Introduction
Crimes Involving Dishonesty
( I) Crim inal brcn«h o f trust
(2) Cheating
(3) Bribery a nd corruption
Act us RC11$
Mc11s Ren
CRIMINAL LAW
Objectives and Underlying Principles
1.3
4.52- 1.54
(4) Insider 1rading
No11Vhhs1andini; 1hc evolving nn1111·c of criminal low, its objectives have
brgely remained constalll. Criminal law ao\d 1he criminal Ju;t lce S)'>lem
togc1hcr con•titute 1he mechanism to rodre<s grievances and 10 bring aclion
4.55- 4.59
Crimes lnvolvmg I nck of Due Diligence
aga1n>1 individuals for offtntcs thal have been commiucd ag•in>I .ociely.
4.60
Conclusion
4.4
An etftctive S)'Stem defends socitty ag•inst harm which 1njuru the mterrsts
and values integral to its prop<r funclionmg. At; a crime is a wrong 10 •ociety,
It attract> lhc consequence of pu1m hnm11. A good criminal jumco sy>lcm
that the punishn1ent 1n1p<>Scd Is co1n1nensurate v.nth the culpability
o f 1hc otlcn<kr. the seriousness o f th,• otr,•ncc ns well as ils impact on ;ociety.
4.5
Public p1osccu1ors have 1he rc>ponsibilily of being ad\•ocatcs for 1hc sl•te
nnd the prosecution is cn1ru;1ed with a wide scope of di>erclion in all
:upcas of the cnmmal prOC<ss (Art 35(8) Co11s1itu1io11 of 1he Republic of
Smg•porc (1999 Rcpnnl) ond s 11 Crirnmol Proccduro Codo (Cap 68, 2012
Rev l:d)) Prosecutorial di>crehon mcludu lhc dcci>ion of what charges 10
ng•ln>t an acc11>ed person and whether 10 appeal agnm\I 60ntences
70
Pnnc1plts of S1n9;iport Business Law
Clt-apte1 4: Busints.s Ctimts
This helps to en<ure 1hat the response
The criminal law is pubhcly enforced. not only with the object of
or the law tn each case h calibrated and proportionale and that the needs or
both .oc1e1y and the offender are effecuvcly ond best >Cr\'td.
punishing CTime, but also 1n thc hope or proHnting it. A proper
sentence, passed Ul pubhc. ser\'CS the pubhc tntercst in !WO W3)'S. It may
deter others who might be tcmp1cd to try crime as seeming to off<r CU)'
money 011 the •upposilion. that ir the ()ffcndcr is caught and brought
to justice, the puni>hmcnt will be negligible. Such a sentence may also
deter the parliculnr crhninal fro1n comn1 it1ing a crilne again, or induce
hin1 to lur n fro111 a Cl'hninul lo an honest life.
which
been passed b)' the
fOUfl.
4.6
ll would also be appropriate to briefly mention the key >cntencing principles
which unde1p111 punishmenl - deterrence. rclllbuuon.
and
rehabili1:11ion.
4.7
l'irsl, dctCl'J'encc hns been identified as Lhe conterstone or Singapore's
Jurisprude nce (see PP v Law Aik Mc11g (2007) ot I 19)). There
arc two :1>pects lo dct<rrcncc - general deterrence or would-be offenders
and specific dettrrence or the particular offender in question. The aim of
is to reduce the con1mis.1ion or crmm
4 .8
Second, under 1he principle of rembution. pum>hment is 1mpostd on
the offender a.< an 1n<li1utionali<ed expression or .oc1e1y's d isappro\'al
or the offender's crime. R<tributh•c JU.lice " olso based on the principle
thoi 1he J>lllli<hmem must fit the crime (sec PP '' u1l1 Soon Ail. Al1drc"'
(2013) at 18]) and hence be proporuonate 10 the harm caused and 1he
blameworthiness or lhe accti.cd.
4.9
Next, under the pri11ciple of incapacila1 ion, punishn1cnt
Distinctions between Crime, Tort and Contract
4. 12
r\s explained earlier, criminal law is concerned with regulating <oc1<1al
conduct and protecting iu members from the ills crime through det<rring,
punishing. incapacilahng and rchobilitating offenders. In contrast. tort law
concerns the rcgula11on or conduct amongst members withm society. Tort
law seeks to protect and uphold 1he lcg;il rights of persons wluch have been
wrongfully infringed. Conlracl law ;crves ;imilar objectives. upholding the
legal right> and obligations or panics. specifically those which ha"c bctn
volun1arily undertaken by partJCs: tn essence, the underlying thread 1s the
existence of agrce111mts. 'I he ba'ic aim> or contract and tort law are largely
s i111ilar as they are primarily compensatory in nature - redressing the loss or
d11mage which h11s been c.mscd by the infringing actions or 1he counlcrpany.
In short, tort law and contract l:iw uim 10 compensate the victim while
criminal law
to puni<h the wrongdoer.
<1. 13
One cspeci•lly important difference lirs in the •tnndard of proof acroS>
criminal and CJvil
Joor <1vil da1ms, i<h1ch mvolvc a v1nd1ca11on or
private interests between parti... the <landard of proof IS on a "baJ.nce of
A> to what pro\'tng something on a bolancc of probab1hlle>
would entail. this ha> been clu1ficd to mean showing that one's cue "1s more
probably true than not true (<re Clnrkr Bcl)1 Clnirc v StlkAir (S111g11par<) Pte
Ltd (2002) al (58]). On a mathcmatkal le\'el, if a party can prove somelhtng
to be at leas! 51 per cc111 (or, one could argue. 50. I per wll) hkcly to be
true, the matter ha> been proven on a balance or probabilities.
•1.14
On the 01hcr haud, It Is a fu ndamental prluciple or law in erlmint1l
proceetlings that the prosecution has to establish its case against the accused
•'beyond reasonable <loubt''. Proving •omcthing beyond rc.sonJblc doubt
must be distrngulshed from proving someclung "be)'Ond all doubt" •nd the
ilnposed on
the offender primarily for the protection of 1hc public. It is based on an
asscs,;mcnt or the a111oum of risk that the offender will pose 10 society due
or
to hi< propen<il y to reolfcnd.
4.10
Last. thcrt ;, rehabihlation which, like deterrence. i' concernrd with the
prcvenhon or crime. Howe\'er. il Siems from a differenl lh•oretical round•tion
rchabil11011on sctk:s 10 change the mor•l outlook of the offend er, which
i> viewed as thc underl)•ng c:ausc of the olTcndcr'> cnnunal behaviour. The
princ1plc of rehab11i1a11on would bt the donunant <rnt<11cmg consideration
whCJ·c the offtnder in question is 21 y<>n. and bdow (see PP v Mok Pmg
W11e11 M1wrlcc ( 1999) at (21 ]).
4.11
In ..rrlvlng al the appropriale sentence, the court lakes ln10 occounl the
public Interest as well ns the interest of the offentlcr. As
said in PP v T1111
Fook $11111 ( 1999) al [65] in relation 10 deterrence:
71
Pnnc1plts ot S1n9;iport Business Law
Ctt.apter 4: Busints.s Ctimts
quesuon is whether 3ny remaining doubts are real or rnson3ble. or merely
fanciful (.cc Teo Kmg Pong v PP (1996) al 1681). 1he reawn for the higher
st•ndard of proof stems from the presump11011 of 1n11octnce of the accused,
and the fact 1ha1 as compared to the financial relief sough1 in ch<il cases, the
comcqucnce> of a successful criminal pro<reding are far more se•·t:re - the
nccu<ed ""ould face criminal sa.ncllons such as imprisonment, which would
impinge on his liberty.
Box 4.1 (Conrln11td)
Here, I.here are three possible forms of
mental element for the ollence:
mtenoon;
knowledge; and
reason to believe.
For each crime, the law has to decide on the degree of culpability that is sulfic1'nl
10 •ttract criminal liability. For assisting terrorim, it decide> that even having reason
to believe is enough 10 make one liable.
A NATOMY OF AN O FFENCE
Introd uction
•l.15
An offence comprises component elements which mu>t be c>tablished beyond
a rca>onable doub1 by the prosecutor before an accused can be convicted of
an offtnce. The tlemen1s would typicall)' compris• 1he arws rr11s, the mtns
rta and also other demenls as specified in the pullcular lcgtsla11ve provision,
•Uch as cau>alion.
Mens Rea
4 . 17
Actus Reus
4.16
Act11s m i<
is 1he nc1 (or sometimes 1he on11ssion) i11dicn1ed in the defini1ion
of the crime chnrgcd as being proscribed by the criminal lnw, such as hitting
is'"'" the
someone or throwing a piece of liucr. An important
prohibi1ed conduct must have been performed voluntarily. This stems from
the principle of individual :iulonom)' and the fact that criminal law only
ascribes criminal liability 10 individuals for choice• and acuon' which they
hod control over.
Strict Lia bility
4. 18
"fhere are also crimin:1I .imotes prescribing for offences which rrnder the
accused criminally liJblc upon proof or the nctus rer11 alone, that h. the
prosecuuon docs not need 10 prove •ny foron of meru rea. Th1> rcpre.enl< a
departure from the oforememloned principle. The rationale for doing so relates
bad. to the n«<I for an effective policing of public welfare offences as well
:IS the protection of pubhc 1n1crc>1 m areas such as health. safety and morals.
4. 19
On the mailer of >tnct liab11il)'. the st•rting point is a prtsumption of law
that mens rcn os require<! before a person c.in be held guilty of a criminal
offence, and this presumption would oper:11e even more sirongly where
the offence is "truly criminal" in nature. ·Jhc presumption can only be
displaced if the i>talute Is concconcd with an iss11e of socio! concern and
the creaiion or s1rie1 ll:iblli1 y will be ctlective lo promote the
or the
s tutule b)' encouraging grcJtcr vigilance 10 prevent the COlllnliS>iOn of the
prohibi1cd act.
Box 4. 1
IJIR
Mttu
Mttu rea refers 10 the ment•I eltmcnt of the crime. /lleru rta needs 10 be
proved alongside actus "'"· reflecung the principle of artm non facet rcmn,
' "" nm15 sit rra (an act docs not make a man guilty of a cnmc. uni<» h1>
mmd is also guilty). It can either reft1 to a subjective state of mmd, for
instance intention, knowledge or rashness, or an objective stai. of mond,
for instance negligence. 1hc>c four states of mind ore the predomin<tnl
descriptors of the fault clcmcnh referred 10 111 criminal statutes.
rtO
and the assistance of 1error1su
The mental rlement lor a crime can take several torms. Thos Is wrll illustrotC'd by how
lhe law deals wolh the subject of assistance of \errodsts. Section 4 of the Terrorism
(Suppreulon ol Financing) Act (Cap 325, 2003 Rev Ed) provides:
Every per>on who ... provides ...
or flnnncl•I or olher related services
... lrort rtdlrl<J that
used, or knowing or liavmg rto1011oblr groundj to
be/1.w that they will be used ... lor lhe purpose of any itrrorist act ... shall Ii<!
guilty of un offence (emphasis added)
73
Chapter 4: Bus.iness Crimes
4.20
As an ex3mple, in Comfort Mn11ngement v PP (2003), the eourt was concerned with whether s 5(3) Employment of Foreign Workers Act (Cap 91A,
1997 Rev Ed), which states that '"no person shall employ a foreign worker
otherwise than in accordance w·ith the conditions of the work pennit",
provided for a strict liability otTcncr. ' Ilic court concluded that it was and
the reasons given included the following:
o
the offence carried little socia] stign1a and was not lruly crin1inal in
character;
o
il was difficull for the statutory body to 1nonitor and ensure cotnpliance
o
the maximum penalty, which is only a SS,000 fine, could not be described
Principles of Singapote Business Law
4.23
Any conduct engaged in or on behalf of a body corporate (a) by a director, employee or agent of the body corporate within the
scope of his actual or apparent authority; or
(b) by any ot her person at the direction or with the consent or agreement
(whether express or implied) of a director, employee or agent of
the body corporate, where the giving of the direction, consent or
agreement is within the scope of the actual or apparent authority of
the direclor1 en1ployee1 or agenl,
the work perinit cond itions: and
tts severe or harstl.
shall be d.-med, for the purposes of this Act, to have been engaged in
by the body corporate.
Corporate Criminal Liability
4.2t
The criminal responsibility of companies (or corporations) is of\en considered
4.24
a tricky 111atter. For 111any. the in11nediate response to the question <>f '"ho
can be convicted of a crime is to envisage a human being. It is true that
there are several problen1s \•.rith ascribi ng crin1inal liability to co1npanies first, con1panies are incapable of receiving the full spectrun1 of punishn1ent
under crin1inal hnv, for instance irnprisonn1cnt, and second con1panics
cannot be held liable for the commissio11 of certain offences whicl\ can onl)'
be co1nn1itted by hurnan conduct.. Yet) the need for the recog11ition and
imposition of corporate criminal liability cannot be denied. Responsibility
and culpability need to be pinned where they belong, thus deterring
corporate activities wlnich hann the public interest.
4.25
4.22
The vicarious liability approach is typically utilised only when the statutory
provision specifically so provides. For example. s 52(2) Corruption, Drug
Trafficking and Other Serious Crimes (Conliscation of Benefits) Act (Cap
65A, 2000 Rev Ed) provides:
There are two approaches by which criminal liability may be imposed on
co1npanies. Fin;t, the co1npan)' 111ay be held vicariously liable for the actions
of its directors, employees or agents acting within the scope of their actual
or apparent authority. Actual authority would stem from the agreement
and relationship beh'/een the employee, agent or direclor and the coinpany)
and may be conferred either expressly o r by impliclltion. On the other
hand, apparent autho.rity is authority as it appears to those who deal with
1he C(unpany lhrough the e n1ployee, agent or director. ste1nn1ing :from past
conduct or the position of the officer in the company which would typically
carry with it the implied authority to perform acts of the kind in question.
75
Where the re levant slatule does nol expressly provide for the attribution
o r liability or cond uct to the company and ;t is not possible to determine
whether it was intended that criminal liability was to be applied vicariously,
the identification approach 1nay be used. Identification is the process
o r mechanism by which the conduct and mental state of one or more
i ndividuals who may be said to be the "directing mind and will" (or
alter ego) <>f the con1pany are allributed to the co111pany. In such cases,
the liability of the company is primary and direct, instead of vicarious,
since the persons in question are essentially the embodiment of the
co1npany.
Companies have to take great care in the appointment, and perhaps even
supervision. of persons whose crin1inal actions 111ay be attributed to the
company.
IN DIVIDUAL LIABLE WITH C OMPANY
4.26
Conversely, an individm•I 1vorking or associated with a cornpan)• may also
risk having criminal liability on account oi an offence commined by the
comp,rny. When does such criminal liability attach to the individual? '11ie
following 1vording is typically used in legislation:
76
Pnnc1plts of S1ng;iport Business Law
Chapter 4: Busintss Crimts
Where an offence under this Aft rnmmitled by
3
body corpora1e is
4.30
(a) to ha\'e been commined with the consent or connh'3nce of an officer;
or
(b) to be allributable to any neglect on his part,
the officer as well as the body corporate >hall be guihy of thc offence and
sh.tll be liable to be proceeded against and punished according.I)"
4.27
4.28
An olliccr consents to the com1nission of an offence by Ihe co1np any when
he 1s well "ware of what is going on and agrees 10 il (sec llucker&y v Elliot
(1970) nt p 194). lhe officer must be shown 10 have known the material facts
that constitute the offence committed by tht company and to have agreed
to its conduct of the business on the basis of those facts In comparison,
an oflietr connoves at the offence commmed by thc company when he is
well aware of what is going on but his agrt>cmrnt as tacit in other words,
whik he as not active! l' cncouraging it, he is letltng it continue by not sai>ing
anythang about al.
With respect to "negkct" on the part of the ollicer, the critical question is
whet her the officer ought to have been aware t hot he could ond should ha,•e
taken action to preve nt the commission <>f lhc offence (•ee R v I' (2007)).
I lenct'. If by reason o f the circumstances and the m1t111·e and scope of the
officer's responsibilities, the officer ought to h11ve been put on inquiry,
the olliccr would be guilty of neglect if he did not take 1he appropriate
preventive action. It is important for individuals who work in or with
companlcs to make sure that they exercise care •nd not be drawn anto any
criminal conduct on the part of the comp•ny.
Business erimes encomp:iss
3
wide range of eriminality. from dishonesty
:ind deception, to lack of due Jihgence or negligtna, to strict habihty, that
is, liability irrespcctl\'e of fault.
proved
Crimes Involving Dishonesty
4.31
Many crimes of dishonc>iy occur in the context of business. We will be
looking al " few of the more common or prominent ones - criminttl breach
of trust (often abbreviutcd to CllT). cheating, bribery and insider trading.
(1) Criminal breach of trust
•l.32
1he offence of criminal breach of trust i> set out in s 405 Penal Code
(Cap 224, 2008 Rev Ed) and 11 reads:
Whoever, being tn any manner entrusted with propcrt)', or with any
dominion over propen)'. d1shonc<tly misappropriates or com-.rts to his
own use that proper!)'. or dishonestly
or dispose$ of that pro!"'rt)•
an violation o( an)' direction of law presu1bing the mode in which such
trust is to be dischJrged, or of any leg:i.1 contract, express or implied,
which he has made touching the discharge of suc.h trust, or wilfully
suffers any other pcr•on to do so. commits criminal breach of tru>t.
'1.33
] he offence can be broken down into ils cons tituent elements:
reus
o
n1isapproprrnt1on,
conversion,
me or disposal m vlolotaon of a direclion of law,
use or d1spoul m violation of a legal contract, or
BUSINESS (RIMES
Introduction
4.29
suffering (c.1using) any pern>n to do any of thc aforementioned;
o
Mms ren
'lhel'C as no (or1nal definition of a "business crin1e.. or a '"whi1r..-c,ollar crin1e'"
dishonest)'. or
In the context of Sini;apore legislation. Llroadly choractcrascd, these offences
can be dist inguished from offences against persons (for exnmple, voluntaril)'
C(lUSing hurt 'u'd rnurdcr) as they are non-violenl in nature, nrc con1mi1ted
often for fina ncial gain and are typically committed during the course of
busincss.
in the Cll>C of causing anot her person to commit the net willfulness:
nnd
o
Entruslm<nl of or dominion over property.
78
Chapter 4: Bus.iness Crimes
4.34
4.35
Principles of Singapote Business Law
As to the element of "misappropriation·; this would mean "to set apart for or
The offence
assign to t.he wrong person or a wro ng use" (see Tan Tze Chye v PP ( 1997)
at 137]). Conversion. on the other hand, refers to "an act in dealing with the
!property] in a manner inconsistent with the rights of the true owner"; and
usage would be one way of acting in an inconsistent manner (see Wong Sc11g
Kwan v PP (20 12) at f44]).
o
the victin1 was deceived and induced to deliver property to the
accused or tc> any <>Lher person: or
the victim was induced to do or omjt to do anything which causes
or is likely to cause damage or harm to any person in body, mind,
reputation or property; and
As to the me11s rea, "dishonestly" is defined under s 2·1 Penal Code as having
the " intention of causing wrongful gain to one person, or wrongful loss to
o
another person':
4.36
be broken down into the following elements:
Actus reus
A1ens ren
for delivery of property -
·n1e element of enlrustment has been liberally interpreted by the courts.
Evidence must be adduced to show that the property was in the offender's
possession o r control. As for don1inion) a person is said to have don'linion
fraudule ntly or dishonestly;
for inducing an act or ontission which causes harn1 4.40
intentionally.
..fo deceive is to nlislead or n1ake one believe to be true what is in fact
false. ·nle questio n is whet her the victinl \'/as deceived as a result of the
over property if he has a general degree of control over the property. and
1his do1ninion need not be exclusive and sole.
accused's conduct viewed as a whole. !v!ore ilnportantly, a causal link n1ust
4.37
Last, it is important to correct ly identify the relevant property alleged to
have been misappropriated or co1wcrted by the accused. A property and
its proceeds are not considered as the same thing for the 1>uq>oses of the
criminal breach of Lmsl offence.
The inducement need not be oral, nor does it nee-0 10 be express. More<>ver,
the inducement need not be the sole or main reason for the delivery of
the property; it suffices that the accused's deception played some part in
i.nducing the victim to deliver the property (see Scmvartl Ill Frederick Oliver
v PP (t 994) at (28)).
4.38
As 1ncntioncd
it is in1porlant to identify all the requisite
of a part icular offence as the prosecution has to prove every clement. If just
o ne clement is not sat isfied, the offence is not 111adc out
(2) Cheating
4.39
The offence of cheati1lg is set out in s 4 I 5 Penal Code, which provides:
be esrnblishcd between the accused's de·ception and the victin1's inducen1enL
4.4 1
There is no requirement that the property in question must be owned b)'
the victim. The property also need not be delivered to the accused who
co1n1nilled thr deception and induce1ncnt.
4.42
The tern1 "fraudulently" is defined as d()ing .son1ething with the intent
cause da1m1ge or harm to any person in body, mind, reputation, or property,
t<> defraud while "dishonestly" is defined as doing somethi ng with the
intention to cause wrongful gain or wro ngful loss (ss 25 and 24 Penal
Code respectively). 1l>ere appears to be a significant overlap between the
t,110 ele 1nents, and courts have cornn1ented that to disting\aish between the
two elements would be an exercise in the li nguistic equivalent of splitting
horse hair (see C/11111 Kian Kok v PP (1999) at 124]). However, it is
conceivable for a person to be dishonest without being fraudulent, such as
where a speaker tells a white lie to the hearer in order to protect the hearer
is said to cheat.
from harm.
Whoever by deceiving any person, whether o r not such deception \Vas the
sole or main inducement (a) fraudulent!)' or dishonest ly induces the person
so deceived to deliver
an)r
property to '1ny person. or to consent that ::iny
person shall retain
property or (b) intent ionally induces the person so
deceived to do or omit to do anything which he would not do or omit to do
if he were not so deceived and which act or omission causes or is likely to
79
80
Principles of Singapore Business law
Chapter 4: Business Ctimes
(3) Bribery and corruption
4.46
4.43
The main legislation dealing wi1h bribery is 1he Prevent ion of Corrupt ion
Act (Cap 24 1, 1993 Rev Ed) ("PCK). Sections 161 10 165 Penal Code deal
with offences by or relating 10 public servants while 1he scope of the PCA is
not li mited to public servants.
4.44
Section 5 provides:
in respect or 'm ag<11t, that is, any person employed by or acting for another.
and includes a trustee, administrator and executor. and a person serving the
Government or under any company or public body. Bribery involving agent.<
carry heavier punishlncnt.
4.47
Any person who shall by himself or by or in conjunction with any 01her
person -
0
other person• or
4 .48
any gratification as an induce1nent to or reward for. or otherwise on
account of 4.49
of corruption ca11 be endless. Instead. they re fer to the natural and ordinary
meaning of the word as a working guide and a starting poin1 - to induce
a nother to act dishonestly or unfai1hfully by bribery, or to pervert a person's
i.ntegrit)' in the performance of dury or work by bribery (sec Chan Wing Seng
"'PP (1997) at (26]). Figure 4.1 shows the elements of bribery.
of a1ty maner or transaction 1vhotsoever. actual or
do anything in
proposed, in which such public body is concerned,
shall be guilty of an offence and shall be liable on conviction to a fine not
exceeding $100,000 or to impFisonment for a term not exceeding 5 years or
lo both.
An offence under s 5 can be broken down into the following elements:
o
o
4.50
Actus reus
•
solicit or receive, or agree to receive a gratification, or
•
give. promise to offer a gratification; and
Me11s ren
•
the grat ification is given or received corruptl)•; and
•
serves :.b an inducc1ncnt to or reward for. or on account for any
person doing or
to do anything.
This begs lhe question of how the element of "corrupt" is to be defined. 1be
courts have eschewed an exhaustivr definit ion as the factual pennutntions
{ii) any member, officer or servanc of a public bod)• doing or forbearing to
4.45
The first inquiry of the existence of an obje(lively corrup1 element cnn be
further broken down into two sub-parts - ascertaining the intention of the
giver or recei,•er (as the case may be) behind the transaction at the ma1erial
ti1ne :ind detern1ining whether such an intention 1ainted the tr:insaction '"ich
a n objeclivrly corrupt element (sec PP v Low 'lio11g Choo11 (1998) at (29)).
thilt person or of another person,
(i) any person doing or forbearing to do anything in respect of any mailer
or transaction whatsoever, actual or
or
The courts have- establi:;hed a
in detern1ining whether a gratification
is given or received corruptly. 1l1c test invol'VC:J two lin1bs - the exis1cnce
of an objectil,ely corrupt element in the transact ion and the existence of
the accused s guilty knowledge that what he was doing was corrupt by the
o rdinary and objective standard (see Clum Wing Smg v PP (l997) at (251).
(a) corruptly solici1 or receive, or agree 10 receive for himself, or for any
{b) corruptly give, promise 10 offer lo any person whether for the benefit of
There is a separate scetion - s 6 - which deal$ with corrupt transactions
4 .S t
In annl)•Sing the cornipt clement, the surrounding drcumsta1tces of the case
n1ay be p:ir:.unount. Surreptitiousnes$ or furtiveness of the tra.nsne1 ion, the
s ize of the gratification, the relationship belwecn the parties 11nd Che breaking
of a rule or code may. as fat as relevant, form the necessary circumstances to
be analysed and from which the in1ention of the parties may be inferrod (see
l?P v Low Ti011g Choo11 ( 1998) at I30 ]). As the case of 'ljo11g Mark Edward v
Ff' (20 15) illustrates. there may be an offence of bribery even if there is no
agreement or specific understtmding between the giver and the recipient of
Lhe bribe.
The PCA also contains 01her interesting and importllnl provisions which
aid in Lhc c nforcc1ne nl o ( law agni11st bribery and corruption. For instance,
81
82
Pnnc1plts ot S1n9;iport Business Law
Ctt.apter 4: Busints.s Ctimts
s 8 establishes a presumption of eorruption m Rl3llon to pa)'Tllents made to
(4) Insider trading
gO\ rrnmrnt srrvants, hrnce shifting the burdrn of proof to the accused to
rrbut the presumpuon. Fun her, s 37(1) PCA provides for the eXlratemtorial
applicot1on of the PCA lo Singapore citirens. What thts means is that a
Singapore citizen can be liable in Singapore for a bribery offence committed
outside Singapore. The PCA can pose .enous challenges for Singap<>rrans
who t mvol abroad in the course of work.
4.52
Insider trading is es>enti•lly the misconJuct o( using confidential mformallon
of a listed company to transact on 11s shares and thereby benefit unfairly.
The rules and provision< rtlating to insid er trading are found in th<
Securities and Future> Act (Cnp 289, 2006 Rev Ed), speci6calli• » 218 and
2 19. Section 221 prescribes the criminal liability for such conlra\'ention:
;ilternatively, the Monetary Authoriiy of Singapore may bring a civil pcn•hy
action against the contrnvcninH
under s 232.
4.53
In the case of a "connected person" (defined in s 2), s 218(2) provides
lhe elements of the offence - the conn<eted person is in po-'15e»ion of
information concerning 1ha1 company that is not generally available but.
if it were generalli• av•ilable, a r.. <onable person would expect it to hav•
a material effect on the price or valut of lht securities of that company
("inside information"), and the connected person knows or ought rtasonably
to know that the inform•uon m<idt information. Similarly, m the cue of
an)• other persons, s 219(2) provides for tht tlemenls of the olfene<
the
person is in possession of onside mformotion and the person knows that the
iniorn1ation i$ inside infor1nat1on.
4 .54
Seclions 218 and 219 are driven by the "info rmation-connected" appronch.
which focuses on the naiure of the Informat ion <llld whcihcr 1t would have
a 1naterial effect on Lhc price oi lhc shares in question. 'lhi.s is contnhted
with 1he "person-connecicd" approach which Singapore hod previously
adopted. This approach empha,l\ed a peT$on's connection with the comp,my
and made it difficult lo secure the conviclions of external prrso11> who
acquired price-sensiti\'t lnfornwion from an insider (sec Ltw Cloce I'm
Kevi11 v Mo11ttary l\11tl1ority of Songaport (2012) al (501). The change m
Lhe insider trading regime wu made to oddress the core
of trading
while m possession of undoscloscd market-scnsih\'e information
Smgnporc Pnr/1nmrut11ry Rtports, Offirral Rtpo11 (S October 2001) Vol 73
nt col 2136).
Corruptly
2
receives
gives
solicits I agrees
3
grabficallon
4
as induoel1*lt I reward
s
for act I forboaronco
J
1
Figure 4 .1 Efcmenu of bribery
83
°'"'
Crimes Involving Lack of Due Diligence
•I.SS
Whilsl intentional crime; arc clc,1 rly rcprchcnsibk, criminal law also ollcn
(but not a1W'1)'\<) C(l>tigates negllgcrtt condu<t. Here, we will discu» 1wo
Chap1t1
Butlntss Crlmts
Pnnc1plts of Singaport Business l.3w
offences - one under the Workplace Safe! y and Health Ml (Cap 354A, 2007
Rev Ed) ("WSHA") and ono1her under 1he Companies Act (Cap 50, 2006
Rev Ed).
4.56
The WSHA
10 ensure heahh and safely al 1he workplace. It imposes
1he du11• on occupiers and employer. (and other persons) 111 o workplace
10 take "reasonably prncticable" measures to ensure 1he safely and health of
at 1he workplace. ·1 he term "pracllcable" means
and when
qualified by the term
the net effect is that reasonable measures
arc required to be taken 1he standard is an objective one. So, for example,
an employer will be expected 10 take such measure• as his peers wo uld rake.
The breach of t h1' duty is an offencr undrr the Act.
4.57
Section 157 Compani e> Act mandates that a d irector "shall at all times act
CONCLUSION
4.60
Criminal law affects uidividuals and entities, and applies in 1hc personal as
well M 1he busmes• realms. In • modern sociel)'. there is an ever increasing
body of laws that relate to business. Thost' involved in the running of
n bu;iness new to be c\'tr more aware of the applicable laws and to act
hone>lly •nd diligently so as not to run foul of them.
honeslly and use rca•onablc
in 1he di<eharge of lhe duties or his
(As a preliminary point, 11 I< observed tha1 the section combines 1he
director's duty of honesty w11h ht> d uty of diligence. O u r focus is on 1he
lrner duty.} 'll1e brench of 1hc seetion nn ract> heavy sanct ions.
4.58
Por the duty to u' c rcn>onnble d iligence. the appro priate test 1s to ask
whcth('r the d irecto r has exercised t he >nme d cKrec o f skill and d iligence as
n reasonable d irector fo und In his positio n (.cc Um \ \/mg Kee 11 Pf> (2002) at
128]). 1 hi; is nn objec tive IC>t t111d the .iandard i> no t fixed. It is determined
b)' facto rs including t11c d il't•ctor's role in the company, the type of decision
being mndc, the size of the complln)' and the nature of its business. The
standnrd
\ \.'Ill
not be lowered
lo acco1n1nodatc
any inadequacies in the
d ireclor's knowledge or experience, bul instead will be raised if th e director
d id in foci hold hon»elf out to pos"ss or actually pos.<csses some spectal
knowledge or eicpencnce.
4.59
As explained above, there arc s1a1utory 1>ro••1<1ons wh1<h provide for strict
habihty offences. w11h the r.honale of imprn••ong the etfecth'C policing of
certain kinds of offences. Another > S l:mplorment of R>rc1g11 Manpower
Act (Cap 91A, 2009 Rev Ed). which prolubits the employment of a foreign
worker •vilhout a v•hd work pas. or the employment of a foreign worker in
ol the conditioM In the work pas..
85
86
Principles of Singapore Business law
Chapter S
S.43
5.44
Business Torts
Defan1ation
5.45-5.47
5. 1
5.2-5.4
5.5
5.6- 5.7
5.8-5. 13
5. 14
5.15- 5. 16
5. 17-5. 19
5.20
5.21
5.22
5.23
5.24
5.25-5.26
5.27- 5.28
5.29
5.30
5.31
5.32
5.33
5.34
5.35
5.36
5.37- 5.39
lnlroduclion
Interference •with Trade and Economic Interests
Gcm'ral Pramcwork
Inducing Breach of Con1 racl
( I) Knowledge and intention
(2) Procurem ent
5.41
5.42
5.50
5.5 1- 5.57
5.58-5.61
5.62-5.66
of O ther O bligatio ns
(nti1nidation
( I ) ·nircat
(2) Unlawful conduct
(3) Damage
(4) 1\vo· and thrcc·party liability
C-0nspi1·acy
( l ) Conspiracy to injure
(a) Combination
(b) Predominant pu rpose to injure
(c) Dam age
(2) Conspirncy b y unlawful means
(a) lntcn tion
(b) Unlawful means
Causing Loss b y Unlawful Means
(I) Intention
(2) Unlawful means
Introduction
Elements of Tort
(I) Falsehood
(2) Malice
lntro duclion
Elements of Tort
( I) Defamatory statements
(a) Wh<ll constitutes a defamatory statement
(b) Form
(c) Interpretation
(2) Reference to the plaintiff
(3) Publication
Defences
5.67
Malicious Fa!lsehood
5.40
5.48-5.4 9
(3) Breach
(4) Damage
(5) Justification
Inducing Breach
(3) Speeial damage
Malicious Palsehood Distinguished fro m Defamation
5.68
5.69- 5.70
5.7 1
5.72
5.73
5.74
5.75
5.76
5.77
5.78
( I) Justificat ion
(2) Pair comment
(n) Comment
(b) Comment is based on true fac ts
(c) Comment is fair
(d) Public in terest
(e) Effect of malice
(3) Absolute p rivilege
(a) Parliamentary proceedings
(b) Judicial p roceedings
(c) Executive matters
(4) Qualified privilege
5.79
5.80-5.8 1
(a) Malice
(b) Communications between persons with corresponding
in1erests and duties
5.86
(c) Statements made lo protect self-interests
(cl) Repol'ls of proceedings
(e) Matters of p ublic interest
(5) Innocent dissemination
5.87
(6) Offer of amends
5.82
5.83
5.84- 5.85
5.88- 5.89
5.90
Remedies
Concl11sio11
88
Chapttr 5:
Toru
Pnnriplts of S1ngaport BusintSs Law
INTRODUCTION
Inducing Breach of Contract
5.1
5.5
In this chapter, we examine two categories of tort• The first is usually referred
to as bu<iness torts that are distinguishable from the tort or negligence in
that they usua11)' involve intentional conduct and, 1n so1ne C.l.Ses. indirect
hmn. l he second cntegory - defamation - i> primarily concerned with
protecting a person's reputation.
INTERFERENCE WITH T RADE AND ECONOMIC INTERESTS
General Framework
S.2
5.3
5.4
At the hcart of intentional torts lies a complex policy question: where should
the line be drawn between lawful and unlawful interfrrcnce with another's
economic interests? Inherent in the notion or free competition 1s the
OCCcptance that one should be able tO ad\-.net one< own int<r<SIS e\"Cn if it
disadvantage. othrr>. Yrt, it is also clrar that competition has to br fair. Srrn
in th1> light, a key obiechve or this area or l>w is to define the boundaries
o( fair co,,1ptt1tion. Cases involving such business or ··econonlic"' torts
continually seek to strike a proper balance betwren the two divergent aims
of protect ing a market pnr ticipant's economic intere;ts dnd that or promoting
co1npctition.
For a start, it • hould b e noted that " person docs not commit a tort merely
because hi< l\ct i\,ity competes with, or adversely nlfccts, the business of
another. In Mog11/ Steamship Co Ltd v MrCrtgor Cow 6' Co (l892), the
plaintilf ;Jupowncrs had to cart)' on their trade at a loss so as to match the
extrcmdy fa\'our•ble terms offered by the def•ndont<, who had formed an
association to monopolise the trade. Even though th< plainhlfs had clearly
.ulfered ccononuc hami as a result of the defendants" coopcrallon, 1t "-.s
held that the defendants had committed no ton. Their oc11on ..-.s aggrcssi\"c
and compclltivr, but not unlawful.
So when Is competition unfair or unlnwful1 It would appear that competitive
nctivitics would only be unlawful if they arc intentional. and either involve
conduct that is independently unhtwful (except fo r the tort of conspiracy to
lnj11rc; sec p;•m 5.29- S.n), or which inlcrfcm wllh ;1no1lm's prc·cxisling
legal rights.
89
If A, knowing that • contractu•I rdJtionship exists b<!tween B •nd C. induces
C to break his contract \\ith 8 without any reasonable justification or excuse,
a nd B sustoins damage as a result, then A commits a tort as against B. In
Lwnley • Cye ( 1853), the plnintiff had contracted "ith Johanna Wagner,
a n o pera singer, to perform exclusively at his theatre for a specified ptriod
o f time. Subsequently, ho1vevcr, Wagner refased to honour her contractunl
obligation with the plnint ilf but instend performed at the defendant's theatre
fo r a higher fee. 111e court held th3l the defendant could be liable to the
plaintiff in tort if he hnd knowingly induced or procur.d Wagner to break
her contractual o bligation with the plaintiff.
(1) Knowledge and intention
5.6
There are two distinct asp«ts to tht mtntal ingredient of thi.< tort. First. the
defendant must be shown tO ha\e known of the cxist<nce o( the contract.
Such knowledge may be proven obje<U.'(Oly. Thus, it 1s unnecessary to \how
that the defendant has actual knowledge of the contract; he may be deemtd
to possess such knowledge if the existence of the contract i> obviou< or may
reasonably be inferred from the surrounding circumstances. Furt her, it is
unnece$sary to show that the defond;m l has knowledge or the preci•e terms
o f the contract. 1 he requirement is also satisfied if a defendant docs not
in fact know or the exlstcnc. of the contract al the time or the breach but
learns of il
the breach is continuing.
5.7
The second aspect of the mental ingredient requires the defendant to ha\'e
intended the breach of the contract (sec Tribwzt lt11"tltmt11t 1hlSI /Ire 1•
Soosar1 Tradmg Co U1/ (2000)). "fhis does not, howc•-cr, mean that th<
defendant must have acted
in the sense of 1U-w11l or spite, as the
dtfendant's moti\-C is largely irrdtvant. A defendant is pid to h3\·e intended
thr breach of the clJimant"s contract only if (I) he intended the brr>eh of
the claimant's contract a1 nn end In tl>clf, or (2) he intended the breach as
a means to an end (sec 08(; I.Id v Allar1 (2008)). The element of intent ion
will thus be satisfied where the dcfoticlJnt intends the breach or d;ima11t's
contract, or delibcrntcl)' 1111ns a blind eye to it, but not if he honestly (though
m istakenly} believes thill the third par ty'.• conduct would not nmounl to a
contrnctual breach. Jn 'fri/11111c /11vestmc11t '/h ist /11c v Soos1111 'fr11</i11g Co l.rd
(2000). the court observed (at ( 17]) that the procurer must have Intended
90
Principlr:s of Singaport: Business law
Chapter 5: Business Torts
to interfere with the plaintiffs contract and that it is "not sufficiem that
5.11
defendant's condud'. This observation is correct insofur as it reiterates
the need for proof of intention to bring about a contractual breach, but it
shou1d not be intcrpr<:ted lO require an overly narrow concept of intention.
Ordinarily, the relevant intention may be inferred when the >defendant
knows that a cont-ractual breach is a natural or necessary consequence of his
conduct, and that such breach is a necessary or eff"cth•e 1n eans of achieving
his desired end. Thus, a party '''ho deliberately procures the bre:ach of its
contract:; so as to in1provc its own profits cannot then daiin
that his intention v.'Os not
LO
cause the breach but only to enrich himself.
procm·e !he car manufacturer to breach its contract, the cbimanL1' loss really
(2) Procure men t
5.8
5. 10
the defendants' ()Wn unlawful act in the form or trespass against
the manufucturer's property. That being the case, the GWK decision was
really 11n instance of causing loss by unlawful means.
a rOSl' from
Direct persuasion is the n1ost conunon and straightforward aneans of
procure1nent. Such persuasion is npplicd directly on one of the contracting
parties and may take the form of petlceful dialogue, or it may be accompanied
by bribes, bounties 01· threa1s.
5.9
In the past. it was generally thought that a person who employs unlawful
means to prevent another from performing his contractual obligatjons by.
for example, kidnapping the contracting party or removing the only available
tools needed for performance. is liable for inducing the latter's breach. In
GWK Ltd v D1111/op Rubber Co Ltd (1926), a motor car manufacturer had
contracted with the claimants to exhibit, al a forthcoming motor show.
cars which were fitted with the claimants ty1·es. Subsequently, however, the
dcfcndt1nts unlawfully removed :md subst itutc<l thc claimants' tyres with their
own. The defendants were found liable for inducing the car manufacturer's
contractual breach. The classification of this decision as one involving the
tort of inducing a breach of contract has, however, been discredited in 0 /JG
Ltd v Alln11 (2008). Since the defendants in che GWK case did 11ot actually
tJ1t resulting breach of contracl was a n1trt nalural consequence of the
5. 12
It has been said thal the tort may '1 1so be cornmiued by a person who knows
of n contract bctweel\ the contract breaker and another, and yet deals with
the contract breaker in 1.1 way that is inconsistent with that co.ntract. In
British Motor Tmdc As.<ocintion v Snlvadori (1949), the plaintiff associat ion
sold Ctlrs subject to resale restrictions. l h e defendants subsequent ly bought
the1n fro1n third parties in circu1nstnnces which they knew were in: violat ion
of these restrictions, a nd were found to be liable for procuring the violation.
now be understood as instanccts of causing loss by un1nwfu1 1ncans.
Indirect interve11tion occurs when A procures B to commit a wrongful act
agninst C with the intention of disabling C from fulfilling its contractual
obligat ions with D. 'rhc intcr\'ent ion is indirect in this case as: the defendant,
A, does not directly approach the co11traclli11g party, C. In I T Stratford
cl- So"' Ud v Uudley (1 965), the defendant trade union embargoed its
members against handling goods on barg<'s owned by the plaintiffs. ' Jhis
caused the plaintilfs' customers (who hired the barges for the carriage of
cargo) to breach their conln\Cts of hire with the plainti ffs as they were
Where the contract breaker is a con\pru1y, the induce1nent is dire-et if it is
addressed to the 1nttnaging director or nlter ego of the company (see l't>o
60011g Hua v 11,,f C/1111 Auto Emporium Pie Ltd (2018) at (99]). This must
unab1e to discharge the cargo and return the barges to the plaintiffs in tilne.
The House of Lords held that the trade union could be lfoblc for procuring
these breaches of contracts between the plaintiffs and their customers. even
be so since a co1npa11y, being inanjn1ate. c:in only act through one of its
officers. In the case where u holding company is alleged to have procured
its subsidiary's breach of contr.ic.t, it is not liable for inducing the breach
of contract only because of the control ii exercises over the subsidiary (sec
ARS v ART (2015) at (2521). However, a holding comptUI)' could be liable
for such inducement if the subsidiary hod no employees of its own and
acted entirely thruugll the holding
employees who had not been
fomllllly appointed as the subsidiary's rcpresc11tt11 ivcs (sec 1ozzi Sri v /Jumi
Armada Offshore Holdings ltrl (2017) at l40 J and J43]).
91
Similarly. cases i11volvi11g indirect i11te1ve11t io11, which were traditionnll)'
explained as instances involving the tort of induci ng a breach of contract,
though their interference was c:nrried out ind'ircctly through their me1nbers.
5. 13
'iA'here the intervention is indirect. lh1bil ity will only \\ri$e if' uulnwful ll'1e;,1ns
are used. In lhe Stn1tford case ubove. thi.s rcquireJnent was s::i,isfied ns lhe
members 1vho obeyed the embargo were in fact acting in breadt of t11eir
e mployment contracts by refusing to hnndle th e plaint iii'.<' barges. By contrast.
this element was absent in DC '//ro111so11 & Co Uri v Dcnki11 (1952), where
the employees of Bowaters (a
of paper), who refused to deliver
92
Pnnc1ples of S1n9;iport Business Law
Chapter 5: Buiint-ss forts
paper to the pl31ntilfs in response to a bo)TOtt organised by 1he defendanl
tnde union, did not bttach their employment conlracl> because Bowatcrs
had no1 required 1he employees to make the deh\'enes to 1he plaintiffs.
As • re.uh, 1he lrade unions were nol liable for procunng 1he breach of
Bowaters' contract with 1he plaintiff>. It should, howe\'er, be no1ed tha1 since
the defe11da111's linbilocy in Stratford hinges o n the 11se of 11nlawful means to
harm (albci1 indirectl)•) the claimant. this catcs ory of cases should, following
1hc 0 /JG !.Id v Allruo (2008) dcc.ision, be viewed as in>lnnces of ca using loss
by unlnwful means.
upon the plaintiff's request and subject 10 relevant cond11ions bemg s3tosfied
(see Chapter 18. parn 18.61 and 18.64), grant mjuncllons to restroon the
defendant from future onterferences.
(S) Justification
S. 17
p osition of the parties 10 the contrnct; the g rounds fo r the bread1; the means
employed to procure the breach; the relation of the person procuring the
b reach to the person who brc.1ks the contract: and I think also to the ob1ect
of 11\e person m pr()(uring 1hc bmch" {see Glamorga11 Coal C<> v Sourll
W11/ts Minm' Frdtr11tio11 (1903) at p 574).
(3) Breach
5. 14
By definition, the tort o nly arisrs where the dcfcndan1's inducement rcsulLS
in 1he brcado of a contractual obligation. The breach may be of a primary
or second•ry obligatoon (such os an obhg.iion to p•y damages ansong from
lhe brNch of • primU)' obligation). It logically follows th•t thett can be no
lort where: (I) the induced party has a righl to terminate 1he contract: (2)
the con1ract o< \'Oid. for instance. on the ground of ollegahty or mcapacity:
or (3) lhe induced party m•y a\'oid the contract on •Ome othrr legitimate
grounds. 11tc dconenL docs nOl, however. require 1hai the contract breaker
(who ac1cd in response to the defendant's inducement) be actually liable to
the ploint llf. In 'liJrquay llotel Co Ltd v Co11si11s (1969). the dcfcnd tmt trade
union wo; found liable for causing Esso's breach of Its con1rnc1ual o bligat ion
10 deliver luel 10 the plain1iff's hotel. even though Es<o was in fact exempted
from llabilit)' as a resuh of an o perative Jorct 111njt11re douse in the contract.
(4) Damage
S.18
Fonall)'. the plaontilf must pro,·e that he or
ha., >ulfer<d damngt os a
ruult of the brcoch of contract. lhus, in one
ot was hdd that there was
no actionable !Ort even though the defendant had onducN the bttach of the
plaintiff• emplo1•men1 contract. The breach did not cau1e any loss lo the
plaintiffs because the employee would not in any event ha,·e relurned to the
plaintiff> <ervoce (see Jones Bros (H1mstn11t010) Lt1I 11 Stco·rns (1955)).
5.16
'lhc damages wh ich are recowrable for this torl include all intended damage<,
as well u; dnnltlges whiich are not too mnolc at tlw time of breoch . Further,
It is no t neccss:iry to prove particular damage: daonngc may be ln(erml from
thr circuni)tances if tbr breach were of
rrnturc "' would in the ordinary
course of cvcnll inlliC't injury on the innocent party. 1'11rthcr, the C'Ourt may.
93
Th• dcftncr must ttlatc to the fulfilment of a moral duty of the interferer.
and not mtrcl1• lhc protection of his perso nal intcrcsLS. It os. therefore,
i nsufficicnt to •how that the defendant has Gctcd honestly, or that a lrade
u nion or an assoc1allon is .acting in the
of its men1bers. In Brundow
v Casson ( 1924), the ddcndanl< hud induced theatre proprietor> to breach
t heir co nl racts with the pl.oinuff. • theat rical manager, so •s to compel the
plaintiff tO incre:lSC the
Of
WhO , ...ere Otherwise reM)l'ting
to prostit11tio11 to supplement their meager earnings. The defendants' conduct
was jus1ified •s 1hey hnd n duty to snfeguard 1he moral stnndnrds of the
theatrical profes;ion.
S. 19
5. 15
In exceptio nal cases, the tk fcndon t who has interfered with the plaint iff's
contract 1ll3)' be able to
the tlcfcncc of justificatio n. In considering
availability. "regard mighl be had to the nat1-1re of the contract broken; the
Another insl:mcc on which JUS!iftcauon on•)' arise is where the defendant
to that of the plaontoff
has to protect a leg'11 right that h equal or
l n Ed..·m H1/I & P11rt11crs v First Nt111onal Fmat1cc Corporntion (1989), the
defendant b-•nkcrs. who had made a >CCurcd loan to a propert)' developer.
wa; justified m »kmg the latter to d1rn1i>.' the plaintiff> and •ppoint on theor
place a more prestigious firm of architects for the dewlopmcnt project. lhe
reason was that the defendants' right• to be repaid under the loan agreement
were on fact .ecured by n mortgage over the property being developed, and
hence such righL< were .iopcrior Ill the plointitfs contractual riglm . Indeed,
t.he ph1intiffs would have been no bclt cr off if the defendants had
their right of sale under the mortg•ge.
Chapter 5: Business Torts
Principlr:s of Singaport: Business law
the recipient and therefore generally laek coer.eive foree. In praetiee, however,
Inducing Breach of Other Obligations
5.20
Some cases suggest t hat the torl of inducing breach of contract may be
extended to o ther types of enforceable obligations. Thus. • person may
co1n n1it a lort if he knowingly a nd inte ntionally induces a breach of a
statutory duty or an enforceable equitable o bligation. As is the ease for
inducing breach of contracts, it would 1101 be necessary to show that the
defendant has employed u nlawful means in procuring the breach of these
other obligations.
Lhis distinclion is not a lways easy to draw.
(2) Unlawful conduct
5.23
Intimidation
5.21
If X threatens to use unl;1wful means lo cause Y lo do or refrain from
(3) Damage
doing so111e act which he is e ntitled co do. resuhing in harn1 to Y <>r a third
5.24
party
z. X commits che ton of inthnidation. In t he ltading case of Rookes
11
Barnard (1964). t he d!efendants. execut ive 111embcrs of a trade uni<m AESD.
'rhc p laintiff 1n usl have sustained <lain-age as a rc.suh of the- defendant's threat.
Such damage would include all in tended loss,es as well as those that are not
too ren1ote.
threatened British Overseas Airwa)rs Corporntion ("BOAC..) 'vith a labour
strike unless it ceased to emplo)' the plaintiff (Rookes) as its
The defendants' 111otive was to punish Rookes for terminating h is union
(4) Two- and three-party llablllty
1ncn1bership. Fearing th e adverse in1pact o f a labour withdrawal. BOAC
5.25
terminated the plaint iff's employment by giving due notice in accordance
with the employment terms. That being the case. the contract was terminated
bwi'ully and the plain tiff did not have on action ag•inst the defendants for
procu ring bre:tch of .contract. Ho1"cvcr. the defendanl<' threat ol >t 1·ikc, if
carried out. would m foci have been a breach of the workers' e1nplor1nent
terms. '!he House o f Lords held the defcndnnts liable for intimidat.io n: their
In
v Baninrd, the tort of intimidation arose in a three-party situation
where the injured plaintiff "'11S d istinct from the victim of the threat. In OBG
Ltd v Allan (2008), this three-party tort was c:xplained as a species o f causing
Joss by u nlawful means. The tort of in timidat ion, however, may also arise in
a two-party situation. Thus. if A threatens to inflict ph)•sicnl harm o n B so
as to coerce B to cease a particular trade, B should, in p rinciple. be able lo
oeck damages against A on the grou nd of int imidation after succumbJng to
A's th reat. Figures 5.1 and S.2 illustrnte these two for111s of the torL
threat to BOAC involved the use of an unlawful means (thal is. b reach of
contract} which resulted in loss to the plaintiff. This decision e>Ctended the
1aw significantly because p reviously, lhe tort of int.in1idation would only have
nrisc11 if there were t l1'rcats of violence and other tort ious acts.
A.
"
1. A
To establish the ton , the relevant threat nlUSI be coercive in nature, that is. it
has the effect o f compelling another to compl)' with !he defendant's wishes
so as to avoid adverse consequences which the defendant may otherwise
b ring about. For this purpose. "idle abuses" are not t hreats. Thr.eats must
also be d istinguished from warnings or advice intended mainl)• 10 inform
threatens B
wllh untawful act
3. A Is llablo
to C for
Intimidation
(1) Threat
5.22
The threat 1nust also relate to u nlawful conduct or n1eans. 'H1is e len1ent o(
unlawfulness lies at the heart of the tort. A person docs not commit the
tort nierel)• because he has made a Lhreat. Ol' made it with ill motives. but
because he has threatened the use of unlawfuJ n1eans. However, precisely
which typc.s of unlawful conduct would suffice for the purposes of this tort
difficult issues which will be considered in paras 5.37-5.39.
.. B
2. B glvos In 10 A't.
thtoal al)d C suffers
"" c >Figure S.1 Three-party intimidation
5.26
1. A tltreatens B
with unlawful act
L
'
2. B gives In 10 A's
·B
throat and B suffers_ J
3. A Is Hable to 8
for Intimidation
Figure S.2 Two·party Intimidation
Howeve1', if the tort of intimidation occurs in • two -party situation. and
t he t hreatened act is o ne of a breach of contract, liability snay a.rise in both
contract and tort. '!his means that B may, in add ition to the claim in tort,
95
96
Principles of Singapote Business Law
Chapter 5: Business Torts
" Lim Eng Hock Peter (20 12) and SH Cogent 1.ogistits Pte Ltd v Singapore
Agro Agriwlturt1/ Pie Ltd (201 4)) and thus appears well entrrnched.
also elaim against A it1 contract for anticipatOf)' breach (see Chapter 16, par.i
16.43 onwards) o r, where he has yielded to the threat, fo r economic duress
(see Chapter 14). Tiie possible overlap of contract and tort principles in such
a situatio n has led a conln-1entator to suggest thlt a threatened breach of
conlract should o nly constitute an unlawful act in a thrrc·parly bul not a
two-party situation (see H Carty, A11 A1wlysis of the Economic Torts (2nd ed,
201 0) at pp I 18 - 119).
(1) Conspiracy to injure
(a) Combination
5.29
Conspiracy
5.27
The tort o f conspiraC)' arises where two o r n1ore persons agree on a course
of conduct to cause d amage to another. A conspiracy to commit an illegal
act or to do a legal act by illegal means may also be a crim inal oil'ence under
s 120A Penal Code (Cap 224, 2008 Rev Ed). In the civil sphere, the tort of
conspiracy may take either one of two forms: (I) conspiracy to injure or (2)
conspiracy by unlawful nleans. The distinct ion between these two fornls of
the tort is s-u1nmarised in 1b.blc 5. I.
Table 5. 1 Elements of tort of conspiracy to injure and conspiracy by
unlawful means: A Comparison
o f con1binatio n is not satisfied by evidence of 1ncrc agrccn1ent between thr
Conspiracy by
Elements of the tort
S.28
Conspiracy to injure
unlawful means
Combination
./
.I
Intention to injure
./
.I
Predominant purpose to Injure
./
Use of unlawful moans
,
.I
Damage
./
./
J(
Bcc:iuse the tort of conspiracy to injure (or simple conspiracy) docs not
involve the use of any unlawful means, the wro ngfulness of the tort lies solely
in the fact that the conspirators have acted in ro11rcrt to llnrm the plni11tiff.
This nleans that the san1c conduct. if co1nn1itted by o ne persQn acting
independently, would have been perfectly lawful. For this reason, this form
of conspiracy is often said to be anomalous as it renders an otherwise lawful
act unlawful merely by rcoson of the "magic of plurality''. Notwithstonding
that, this tort has been applied by our courts (sec Rnfflcs 'fown Cl1Jb Ptc Ltd
97
'fherc m ust be a cOnlbination or some conccrlcd action between two o r nlOrc
persons. Tiie agreement between the conspirators need not be express but
111ay be of a tacit nlture. The conspirato rs need not join in at the sa1ne tinle
and 1nay indeed have dHfc rc nl ai1ns, as lhc
question in each case is
whether they were aware of the plan and took part in its execution. Directors
111ay conspire ""ith their co1n pany since the latter is a separate legal e ntity.
An ('mployt:r is not conspiring with its employee where the latter merely
goes about his or her busines.s, though the employer could be vicariously
liable fo r the conspiracy of his employees committed in the course of their
c 1n ploy1nent. If one's actio n facililates another in causing hann to lhc vktinl,
such facilitation docs not by itself amount to a combination if the former
does not have control over or interest in tine latter's acts (see CBS Song.<
Ltd v Amslmd Consumer Electronics Pie ( 1988), which concerns the issue
o f liability as joint tortfeasors. but the same principles appear to apply to
t he issue of complicity in the tort of conspiracy). Further, the requirement
defendants. It must be established that each of the alleged conspirators has
acted or taken some step to furt her the common design of the parties.
(b) Predominant purpose to injure
5.30
To establish the tort of simple conspiracy. it must be proved that the
predominant purpose of the defendants' conduct is to inOict damage on the
victin1. 1b us. where it is established that the defendanL;; have been acting
in pursuit of a legitimate interest. the foct 1hat damage to the plaintiff is
a n inevitable or foreseeable result of the defendants' conduct is insufficient
t<> prove conspiracy Lo injure. In Crofter Hnnd Woven Harris Tweed Co Ltd
"' Veitcl> (1942), the defendant trade union c>flicials were informed by millowners (whose workers were members of the union) that they were unable
to raise the wages o f lheir workers due to con1petition fro nl the plaintiffs,
who operated at lower cost by importing their yarn supplies. Consequently,
the defendants acted in combination with the mill -owners to prevent the
p laintiffs fro1n obtaining their yarn supplies. Such lction did not, ho,vever,
98
Principles of Singapore Business law
Chapter 5: Business Torts
involve the use of any unlawful means. 'The House of Lol'ds held that the
combination was legit imate as the predominant purpose of the defrndants
was to protect the industry on which the wages of the workers depended.
This suggests that the pursuit or self-interest is gener•lly regarded as
legitimate for Lhc purposes of this tort. However, once it is
that
the defendants' predomina1\l motive is to injure the plaintiff, it is of no
assistance to plead that their conduct also serves the subsidiary purpose of
in the holdi ng company of Harrods (Lhe famous departmental slore
in London). 'lhe dcfrndanl< oucmptcd to strike out thc plaintiff's claim,
arguing Lhat they had not acted with the predominalll motive to injure the
p laintiff. Although this was found to be true, the plaintiff n.-·ertheless was
allowed lO proceed with his clain1. It was not necessary lO prOv<' 1hat the
defendant had acted wi1h the prcdominanl motive to injlll'e the plaintiff. In
EFT Holdings Inc 11 Mari11tck11ik Shipbuilders (SI Pte Ltd (2014), the Courl of
Appeal further clarified {at I 101 J) on the requirements of the tort's mental
element as follows:
prolccting Lhcir own interests. In practice., this rcquircintnt for pre·do1ninant
purpose severely restricts the scope of the ton as it is often not difficult to
show thal I he defendants' conduct is m0Liv3ted principally by the desire to
protect self-interests.
A claimant in an action for unlawful means conspiracy would have
to show that the unh1,vful rneans and 1he conspiracy \\rere t::irgeted or
directed nt the claimant. ll is not sufficient that harm to the claimant
would be a likely. or probable or even inevitable consequence of the
(c) Damage
5.3 t
The tort is only action.ible on proof of damage, that is, fi nancial loss. However,
lhe asses-,menl of such damage does not require the proof of parlicular
losses but may be inferred from the circumstances. In lo11t110 " l'aycd (No
S) ( 1993), ii was held that lhe plaintiff could not ch1im domagcs for injury to
rcpulation and
in an act ion for conspiracy as such dainages arc n1ore
appropria1cly dealt
under tlie rules relating to defamation, as discussed
below.
aggr.avated da1nages n1ay be recoverable if 1he defendant's
conduct can br said to be ..conlun1elious o r except.ionaf' (see L; :Siu Lun v
Looi Kok Poli (2015)).
'Otis fonn of conspiracy shares 1he features of con1bination and dan1age,
i·espcctively discussed in paras 5.29 and 5.31. Unlike the tort of simple
In general, the elemenl of "unlawful means" has been construed broadly
to include a wide range o f unlawful acts such ns a breach of contract, n
breach of fiduciary duty, fraud, deceit, palen1 infringement and conversion.
However, it is also clear that not every
will suffice. So how is
...unlawfu1 1neans" to be detcrn1ined? One approach thal was popular
Such an approach wa.s bas<'<l o n the vie\\, that conspir3cy was not an
conspirncy. however. it involves the use of unlawful means but does not
independent tort but a species of joint liability (that is, two or more persons
being liable for the same wrong). If accepted, this view would render the
require Lhe presence of a predoininant purpose to harn1 the vict i1n. 111e
l<>rt of conspiracy by unlawful 1nean.'i superfluous a.s it would add nothing
discussion which follows will focus on these two points of distinction.
to a claim based on the underlying tort. J lowevcr, the Singapore cottrls have
thus for preferred 1he broader approach that "unlawful means" may in this
conlext be constiluted
(a) Intention
5.33
(b) Unlawful means
5.34
among commentators was to confine unla1vful means to actfo11able civil
wrongs {such as a breach of contract. a tori or a breach of equitably duiy).
(2) Conspira'y by unlAwful means
5.32
defendant's conduct. Injury to the clai1nant n1ust have been intended as
a n1cans lO an
or as an e nd in itsdf.
A plainJiff seeking to cslablish liability for unlawful means conspir.acy is nol
required to establish 1hal the defendants h;1d a domin•ml motive lo iniurc
him. lnste•d . the mental clcrnenl for this tort is Lhe lower threshold of "an
inlention to injure" the plainliff. In Laurila v Faycd (1992), Lhe plaintiff
complained thnl the defendants hnd conspired and utilised f rnudulent
misrepresentations to foil the plaintiff's plans to ncquirc a controlling
99
by either
a civiJ or a crhninnl wrong, whether or nol
such wrong is independently actio1table (sec Berkkett Pte lid v De11tsc/1e
Ballk AG (2009), /lFT Holrlillgs /11c v Mari11tek11ik Slripb11i/dcrs (S) Pte 1.td
(2014) and 7/w Wellness Group Pie Ltd v OS/M /11temationnl Ltd (2016)).
G iven the breadth of "unlawful means" so defined, il is c.lea1· that other
controlling mechanisms will have to be evolved 10 limit the scope o( this
tort. One possibility is lo insist on a close causal link between lhe illegality
applied and the plaintiff's injury.
100
Chaptef 5: Business Torts
Principles of Singapote Business Law
interests under the exclusive arrangement. Hello! eould not be heard to sai•
Causing Loss by Unlawful Means
5.35
The tort of causing loss by unlawful means (previously known as unlawful
interference with tra de) is constituted by two elements, namely, "(a) a
wrongful interfe rence with the actions of a third party in which the clain1ant
has an economic inte·rest and (b) an intention thereby to cause loss to the
claimant" (see OBG Ltd " Allm1 (2008) at 147)). Unlike the tort of inducing
breach of contract, this tort does not necessarily invo lve the breach of
any pre-existing legal d uty owed by the chird par!)' to the plainlitf. Also.
a defendant is only liable under !his to n if he has employed unlawful
1neans, while Jiability for inducing breach of contract silnply requires hiln
to have persuaded or procured the breach. As such, the torl of causing loss
by unlawful means is not confined to pro tecting economic interests arising
fro1n contracts. but seeks to protect trade rs generally against any injury that
is inflicted indireccly through an inccrmediary. The classic example is thal of
a three-party intimidation, where, for example, A threatens to beat up B if
B does not cease its business dealings with C. On these facts, C n11ay sue A
fo r causing C harm through the unlawful threat of battery. The essence of
che defendant's wro ngdoing lies in the use of unlawful means to hinder or
reslricl a third party from dealing with che plaint iff.
that it was o nly acting to drfrnd its own interests as such defe nce could
o nly succeed at OK!'s expense. This is consistent with the view that there
is no requiren1ent for proof of a predon1inant inte rest to injure, so that the
defendant's n1otivc in preserving or advancing its own interests docs no t,
by itself, preclude the fi nding of an intention to injure (see Lo111'110 " Fnyed
( 1990)).
(2} Unlawful means
5.37
The use of unlawful means is the essence of the tort. It is also the most
p ro blen1atic aspect of the to rt because not every unlav"ful act or n1eans would
give r ise to an action fo r unlawful interference. In OBC Ltd v Alln11 (2008},
a majority of the House of Lords interpreted "unlawful means" narrowly to
guard against the excessive expansion of the tort of unlawful interference.
'] his intcrprc lation is restrictive in two aspects. First, the requirement for
unlawful conduct is not satisfied by mere proof of an unlawful act against
a third party interinediary that causes loss to the clain1ant, but requires
the additional evidence that the unlawful act is independently nctio11nble by
the tl1ird pnrty. For this purpose, it suffices if an unlawful act is actionable
even if 1he third party has not suffered any loss. Secondly, the unlawful
act must also be o ne that "ffects tlie t/1ird pnrtys freecJom to den / with tlie
clninw111. The application of this condition was demonstrated in Do,,glns
" Hello! (2008), where the House of Lords held 1ha1 Hello! was not liable
fo r unlawful int<•rfcrence bcc.ausc it had not (despite its liability to the
Douglases for breach of confidence) done anything to interfere with the
Oouglases' liberty to deal with or perform the contract with OK!. Hello!'s
conduct had 1nere1y made OK!'s exclusivt· contract with Lhc Douglases less
profitable.
5.38
D efining .. unlawful n1eans" in this way has the effect of narrowing the
(1) Intention
5.36
In OllG Ltd 11 Allm1 (2008), the House of Lords held that the mental element
of the tort requires proof that the defendant either (I) intended ha rm to the
claimant as an end in itself, o r (2) intended to harm the claimant as a means
of achieving an ulterior purpose. However, it is not sufficient to show that
the clain1ant's dan1age· is an inevitable, probable or even foreseeable result of
the defendant's cond uct. The relevant intention to harm may o nly be infer red
from such knowledge if the injury were also a necessary or effect ive means
of :ichieving the defendant's ultimate end. In Douglns 11 Hello! Ltd, o ne of the
three appeals heard in OBC Ltd v A/Inn (2008}, OK! magazine had contracted
fo r the exclusive r igh t to publish photographs taken at the wedding of
Michael Douglas and Catherine Zeta·Jones. Whilst fully awar-e of this
exclusive arrangement, /le/lo! magazine published a number of unauthorised
photographs surreptitiously taken by a papnrazzo. OK! sued Hello!. claiming
(ainong.st others) dan'lages for unl;n...•ful interference with its trade. Although
/le/lo! was no t fo und to be liable on this ground (see para 5.37). the llouse
of Lords found that Hello! had intended to harm OK! because it knew full
well that the publicatiQn of 1he unautho rised photogrophs would injure
101
to rt in two ways: first, it means that the tort will o nli• apply to cases of
;,,direct interforences. where the defendant s trikes at the claimant th rough
an intennediary: and .second. requiring the unlawful act to be separately
actionable by the intermediary means that c riminal and statutory offences
th;.tt do not also give rise to a cause of ;.1c1 ion in civil law would no1 count
as "unlawful means". Mo re broadly, this interpretation of the tort also makes
it dear that this tort is distinct from other business to1·ts such as inducing
b reach of cont racc o r conspir;1cy by unlawful means.
102
Chaptt-r 5: BusintSs Tons
S.39
Princ1plts of Singapott Busintss law
While 11 is clear th31 the majority l:!w Lonls' anal)'St'S m OBG Ud v Allmi
the false representa1ion must bear some relation to the platntiff', has propert)'
or trade. It must also lm·e been published to third p<>rsons other than the
plaintiff hunself. srnce a pubhrn1on to the plaintiff alone is unlikely to re$ult
in any actual financial damage.
(2003) have clu1fied the tort in important way;, d1tliculti(> remain u to
ll> 1><«1>e scope and ra11onale. For eumple, the re.\tnct1on of "unlawful
rneans'" to civil actionable wrongs is and \\•ill conunur to be contro\·ersi:.tl,
for a> Lord Nicholl> had observed in his dissent, "( inl seeking to di;iinguish
beL,veen acceptable and unacceptable conduct, it would be passing strange
1hat n br<etch of cont rnct should be proscribed but not a crime (see OBG
Ltrl v Alltw (2008) nt I 1521). In addition, while the tripartite >t ructur< of the
ton fits neatly with Instances of three-party intimidation, it docs not explain
two party intimidation. Does it then follow that two and three·party
intimidation arc really two species of tort? In Singapore, the ll igh Court
appeared to have accepted m
lriturimw11nl Gro11p (Slngnporc) Ptc Ltd
v Yau Kwok Smg Wrmtan (2011) and Waltro Ptt Jtd v Um Arvin Syl1'i'sttr
(2017) that the tort '" expounded in OBG /.11/ v A/lair (2008) applied in
Singapore. However. as the tort wu not in fact c<tabhshed 111 both castS, the
question •s to how this tort "111 t:ike shope m Singapore remains to be seen.
(2) Malice
5.42
Sped al damage
S.43
M ALICIOUS FALSEHOOD
Introdu ction
5.40
lhc com 1non hn'I has long recognised that one's trade and business in1erests
onuy be harmed root just by conduct but olso by words and rcprc>cntotions.
Thus we wHI see in Chapter 13 thot the tort of deceit ,ofrguords a person
again;! any injuq• which directly
from relying 011 another's fraudulent
otatcmcnts. In thh section, we consider the tort of malicious falsehood,
which arl<es in s1tuat1ons where false rcpresen1ations are made mahciously
in order to m1ure the plamtiff's goodwill or economic reputation.
(1) Falseh ood
5.41
The clolmnnt hns to p rove that the defendant had practased some form of
falsehood. Such falsehood moy take the form of oral or written 'tatement.<
or even mblcnding conduct. Although the tort wJs originally .conceived
to pro1cct interc;ts relating to land, ii hns >Ince been extended to apply to
economic lnt<·re>ts generally. lnus, u plnint ifT's loss of buslnc» resulting from
the dcrcndant's fahe pubUcatJon in the latter'>
that the plaintiff
h.11 cca.ed bu<mess i• actionable (see Rn1/drffe " F.vaus (1892)). Obviously.
103
At common law, a plamt1tT has to pro,·r that he has sutTored speci31 damage
as a result of the falsehood pnct1sed by the defendant. Such damage could
i ndude, for instance, diminution in asset values and genenl dtchnc in sales
and custom. 'I his requirement for •pedal damage has, however, been modified
by legislation. Under > 5 Oefom.1tio11 Act (Cap 75, 2014 Rev Ed), 11 is not
necessary to prove special damage in an actio n for malicious falsehood 1f 1he
words or statcmenls cornploined of are published in writing or permanent
form. or where the words used are calculated to Clluse pecunlory damage
to the plaintiff in respect of any office, profession, calling, trode or bu$lnc.«
held or carried on by him al Lhc time of publication.
Malicious Falsehood Distinguished from Defamat.ion
S.44
Elements of Tort
A defendant acts maliciously If he makes statement knowing thnt iL i<
untrue or is reckless as
iu truth, that is, not caring whether 1t il\ true
o r false. However, nwrc negligence is not malice. Evidence of personal 111·
will and spite, or an intention to Injure would suffice in proving malice (see
also para 5.79).
As the ton of malicious fal,..llOOd ,. esscn11ally concerned with prot«tmg
trade reputation, there is an obvious resemblance be1ween this tort and the
tort of defamation, which we shall txaminc m tht following part. Indeed,
these two torts may often overlJp and In such sil\lations. the pla11u1tT will
have a choice of whtch action to pursu<. Nonetheless. ii must be remembered
that the elements of the two torts are diffrrmt. For malicious falsehood. the
operative stotements must be fohe. but the)' need not rclote to cithe1 the
p lointiff's reputation or chnrnctcr, or impute o defamatory menning. Further,
iilalidous folsehoocl is tlct lonable upo1t llr6of of malice, but
I; not
generally an element of dcfalllation. Finally, onnlicious fabehood is essentinlly
founded on the proof of spcclol darnoge rcsultmg from the defendant's fal<t•
104
Principles of Singapore Business law
Chapter 5: Business Torts
representations, bul substantial damages may gmernlly be elaimed in a
it is published as a libel: and where the mod.e of publieation is tempoml Of
defamation suit without proof of particular dnmage (other than instances of
slander. which require pl'Oof of particular damage).
transient, thr tort is actionable as a slander. It is in1portant to distinguish
between these two fonns because damages are presumed to l'esult from a
libel and hence it is actionable without proof of special damage, that is.
actual and material loss capable of being measured in monetary tcm1s. By
contrast, an action fol' slander would require the proof of special damage
D EFAMATION
unless it falls within certain co1n n1on law and statutory exceptions (see, eg,
ss 4 and 5 DA). Finally, although " defamation suit may be brought by both
individuals and corporations, a corporation, unlike an individual. is not
presun1ed to have a reput:.uion. Thus, a corpGration is required to prove that
it has a trading reputation in this jurisdiction as a pre-requisite for bringing
a defamation suit (see Qi11gdno Bolrni Construction Oro11p Co, Ltd v Go/1 Teck
Introduction
5.4 5
The law of defamation protects a person's reputat ion and good name.
Although it is not im mediate!)' concerned with the safeguard of economic
interests, yet the rclat ionship between a good name and economic interests
is far from distant. Where indMduals ore concerned, a disparaging remark
could, at worst, destroy a person's livelihood. For businesses, reputation and
goodwill are 1low commonly regarded as one of the most signifiC3nt assets
and thus any damage to these would in all likelihood translate direccly into
significant fin:u1cial lo s..'ies:.
5 .46
This section will only provide an introductory account of the law. However.
the reader should note that this is in facL a con1plex
as it strives 10
balance the competing dema11ds of two very important concepts of liberty:
the right to free speech and the right to protect one's reputat ion. ln modern
econonties. the
Be11g (2016)}.
El e m e n ts of To rt
( 1) Defam atory state ments
(a) What constitutes a defamatory statement
5.48
which exposes the plaintiff to "hatre<i, conte.,lpt or ridicule" (see Pnrmiter v
Coupla11d ( 1840} at p 108), or which "(lowers] the plaintiff in the estimat ion
o f right-thinking members of society" (sec Sim v Stretch ( 1936) ot p 1240)
or whk h causes him to be slrn nned or nvoiCkd. A statenmll is defuma1ory
if it has the te11dc11cy to excite adverse opinion ngainst the plnintiff, though
surrounding this delicate balancing exercise have
been compounded by the revolutionary impact of the lnteniet, elevating the
problems 10 a trnnsna.tional level.
5.47
Several preliminary commenL< arc i11 order. First, the law of defamation is
essentially constituted by and developed through case law. The Doefamat ion
Act (Cap 75, 20 14 Rev Ed) ("DA") does not supplant the common law but
merely modifies it in u limited number of ways. Secondly, the making of a
dcfonla1ory sta1ernc111 n1ay in son1e drciunstance ;Jlso constitute a crilnin::il
offence under .< 499 Penal Cod e (Cap 224, 2008 Rev Ed) (" PC"). The elements
of (and defences to) tl1c criminal offence do, however. materit>lly differ from
the civil tort. For Instance. ii is an element of the criminal offence that the
accused n1ust huve 11110.de the publication with the inte ntion to harn1 the
reputation of the defam ed party, or knows or has reuso11 to believe that such
injury would result (see s 499( I ) PC). Ry contrast, the defendant's subjecth•e
stale (>f mind is not a111 element of the dvil wrong. The discussion th at follows
will focus on the civil tort alone. 'Dlirdly, a defomato1·y publication ma1• rnkc
either of 1wo forms: where the publication is made in " permanent form.
105
There is no single exhaustive test for detern1i.ning whether a staten1en1 is of
n dcfn1nalory nalure, but il is often said lhal n Jefarnatory slt1trmcnl is one
i.t is not necessary lo prOV<' that .suc.h adverse opinion has- in fact arisen.
The question whether a sttllcment is defamatOr)' must not be confused with
the question of its trut h. A statement is not def.,matory by reason only that
i.t is untrue. though n dcfcndttnl may invoke the defence of justification by
proving that the •tatement '''as true (sec para. 5.67).
5.49
'Jhe standard of opinion to be applied is the views of "right-thinking
members" of society. TI1is is an objective •tandard and hence the subjective
intention of the n1nkcr of the state111ent is irreJevnn1. Thus, a st:llen1ent is not
d cfon1atory 1ncrcly because the nrnker of the slatrn1e nt intends to injure the
plaintiff. The views of the community must be considered as ll whole and
not just thllt of a limited ch1ss. A stntemcnt is therelore nol defamotory if it
is only regarded
<lisµnraging by u group whose views nn? so rudic:il as not
106
Principlr:s of Singapore Business law
Chapter 5: Business Torts
to be faiFly representative of the community. Strong fonguage, vulgarities and
(e) the ordi nary reasonable reader is treated as having read Lhe publkat ion
words spoken in tJie lneat of the moment are not defamatory if a 1·easonabk
person would understand them to be no more than mere abuses or insults.
the literal meaning of which is not intended.
as a whole in detcrn1ining ilS tnt'aning. thus "t he bane and the antidOll'
must be taken together"; and
(l) the ordinary reasonable reader will take note of the circumsta11ces and
manner of the publication.
(b) Form
5.50
Other than spoken or written words, defamatory assertions may also take the
fornl o f canoons, cari.catures. visua1
statues. signs and gestures. In all
caSl'S, however, the test for dcterinining whether a dcfatnatory inlputnt ion
al'ises re1nains the san1e.
5.53
example, a sl.atcmcnl nlay
To decide if a .slaten1enl is defon1atory. the courl first consl rues or interprets
the statenu.·nt to ascertain its nntural and or1Ji11nry nteauiug. that is. the
meaning which would be conveyed to "ordinary persons using their general
knowledge and common sense" (see Lee Krum Yew v Davies (1989) al [33)).
for this purpose, the .court has to (somewhat artificially) ignore the fact that
words may mean dilfercnt things to different people and seek to asceriain
its ""e nnrl only mean ing. In son1e c.nscs, a stateJnrnt is <lcfan1atory because
its mlfural and ordinary meaning bears a clearly adverse imputation; for
example. A is a liar o r a murderer. In other cases. the disparagement does
not arise directly but 1nay be reasonably inferred by o rdinary pe rsons not
guided by any special knowledge.
5.52
bears a particular 1ncaning, the court 1nay not ascribe to it a n1orc dcfa1natory
rneaning than that pleaded by the
TI1ere is, however. no restrict ion
o n the imputation of a less injurious meaning (see Review Publis/ii11g Co Ud
"' Lee Hsie11 Loor•x (20 tO) al [ 1281).
5.54
(a) the natural and ordinary meaning of a word is that which is co nveyed to
an o rdinary reasonable person;
(b) as the test i< objective, Lhe meaning which the defendanl intended lo
conve)' is irre1cvaclt;
(c) the ordimiry reasonable reader is not avid for scandal but can read
betiveen 1he li nes and draw inferences;
107
A defamatory imputation may also arise by way of an im11w1do. 111is
occurs where the wo rd.s or expressions used arc />rinu' facie innocuous, but
could in fact convey a disparaging meaning when made to persons who
have knowledge of special focts which are not otherwise generally known.
Such innuendos arr com111only referred to a..s "true" o r .. legal" innuendo.s.
rn one case. the defendam newspaper published the picture of Mr C with
Ms X together with an announcement that Mr C and Ms X were to be
e ngaged. Although both the picture and the words were not objectionable
i.n themselves. they were found to be defarnator·y of the plaintilT (Mrs C, the
lawful wife of Mr C) as they suggested to those who knew tha.t the plaintiff
Jivc<l with Mr C as his wife that s,he was do ing so out of wedlock and wa.s
therefore an iJn moral woman (sec Cnssidy " Dnily Mirror Newspapers Ltd
( t 929)). The adverse imputation did not therefore arise directly from the
published materials but as an extended meaning established by reference lo
the special facts known to those to whom the publication was made.
In Clum C/ie11g W11h v Koli Siu Clw11g Freddie (20 12), the Court o f App ea.I
identified (al I 18 J) the foUowing as the relevant principles for de lermining
lhe natural and o rdinary rneaning o( \VOrds:
(d) where there are a number of possible interpretations, some of which may
be non·defiunatory, .such a render will nol seize on o nly d1e defa1nntory
one:
that a claimant has con1nlitlcd a wro ngful
act, or that there '\re reasonable grounds for suspectiJig that such an act has
been con1n1itted, o r that there are grounds for investigating \t/hether the act
has been committed (sec Nx Koo Klly Bencdirt v :Cim /11tegrnted S/1ippi11g
Services Lid (20 10) at I t6l-[171. citing Clr11se v News Group Newsp1ipers Ltd
(2003)). Once a plaintiff has pleaded tl»t an allegedly offending statement
(c) Interpretation
5.5 1
W hen interpreting an allegedly defamatory statement, one has to be clear as
to the precise level of defamatory meaning a ttributed to the statement. For
5.55
Legal (or true) innuendos nlusl he
fro111 .. false" innuendos.
The latter refers Lo inferences which may reasonably be drown from the
plain wording of the stntements without any reference to extern'11 focts or
108
Pnnc1ples of S1n9;iport Business Law
Chapter 5: Buiint-ss forts
evidence. False innuendos are therefore really part and parcel of the natural
and ordinary meaning ascribed to >tatrmenl>. In practice, 11 is not always
e;uy 10 dl511ngui>h
a legal and a false mnuendo. Howe•"tr, a useful
clue lies in whe1her 1he facts relied upon to >upporl 1he innuendo are indeed
known onli• 10 a .elect group of people or generally known to 1h e public.
In the Inner ca<e, 1he inference would be in the Ml\lre of a false innuendo.
In Chinm Sec Tung '' U11g How Doong (1997), 1he in1ernol s1rife amongs1
1lw members of the Singapore Democratic l'ar1y ("SOP") culminated in 1he
issue of n s1:11cmenL by the dcfendanls (members of the SDP's cxecuti••e
commill<e) calling for Lhe cessation of the cl:iinrnnt's party membership.
'lhc claimant ollcgcd that the statement gave rise to various defamatory
innuendo• including, i111cr a/ia, that he was a puppet, stooge or lackey of the
People's Aclton Pany and that he
not a n13n of prtndple Jnd honour as
he had betrayed the interrsts of hi> own p.irty. II wa> held, however, 1hat the
cla1man1 could not rely on the events leading 10 1he is.<ue of the statement
as "•pte..I facts" supporting the alleged legal innuendos since these fads
were well-known 10 the public at large Thu>. the proprr approach was to
examine 1he <tatemenl and ask af the natura.1 and ordmary meaning of the
word< would,
regard to the >1ate of knowledge of 1he general public,
g1w rl>C to lhc imputations alleged by the claimant.
(2) Reference to the plaintiff
5.58
the .statement is n1ad(' with reference to the c laimant.
5.59
5.57
causes of action.
109
'Where the defam11tory stntcmcn1 is mnde in the course of a 'thread" of
conversation or co1n1ncnts, which conln,only occurs in social n1ed1a, chc
ll is important to distinguish bclwccn the different woys In which ddamatory
impullltion< 1irise because the cvidentiary and plca,lini; rules differ according
to the type of Imputation alleged. Thu>, where it Is alleged thal words are
defamatory on 1hcir natural and ordinary me.ning, the plaintiff nred only
plead 1he word> them:,elves. In fact. no evidence rrgt1r.ling the <ense in 1•hich
the word.• are understood is admissible as such meaning should be apparent
from the word' them.,h-es. In the case of fabc innuendos, the claimant will
ha\'e to ple.d the
he ascriOO to the word> since such meaning will
not
appamu from 1he bare wor<U them<eh't•.
A> regard> legal onnucndos, the pla1111ttf will ha\'C 10 plead the special facts
giving rise to the 111nuendo and adduce evidence 1hat such foc1s were in
fact loiown 10 one o,· more persons Lo who on the stolcmenl i• published.
ll h po.Sible 1hat 11 pMt iculat publication moy be dcr.1111lllory both on its
nntural nnd ordinary meaning as well as 0 11 1hc basis of legal innuendos
ul'islnij 1hcrerrom but such a pleading would in foct give rise lo two separate
A plaintiff canno1 rely on "self identification" to e5tabli<h an nctoon
in defamation. 1hu>, if an allegedly defamatory publication docs not
specifically refer to the pl;untiff but the pl:untitf subsequently 1dcn11fics
himself (to third part1<1)
1he subiect of that publication. he c•nnot rcl)•
on his own identification to cst3blish 1hat the publicatton refers to him
(sec Goldt11 Season Plf Liii v Kniros Smg11p<>re Holdings Pte Ltd (2015)
at [49]).
•<
5.60
5.56
A defamatory statement must be one which has bttn publi>hcd of aml
co11ccrnmg rite ela1111m11. It is not necessari• that the claimant be expres.ly
identified in the stalement; 11 is <utlicient if ordinari• and ..ns1hle people
who are acquainlcd with the claimont or who ha\'c knowledge of the
facts might reasonably understand the words to be referring to him.
Where the claimant is clenrl)' iden1ified, he may sue for defamation even
if the state1ncnt was inlcndcd 10 l'Cfcr to so1ne other person wilh the S'11nc
11nme or identificotion (see /lu/1011 v /ones (1910)). Generally. the subjective
i ntcntion of the nrnker of the sta1c1ncnt is irrelevant in detern1ining whether
e ntire thread would u>ually co11>tit11tc a singuhr publication so th•t il ,hould
be read as a 1•hole to decide whether the publication suflicicotly identifies
Ptr l.r.f v Kniros Singapore Holdings Ptc I 111
the plaintiff. In Golt/en
(2015). the defendant initi•lly made several Facebook posts complommg of
cheating, malpractices and copyrigh1 infringement without identifying the
plam1itf. However, the plmntitf responded to the posts on a manner th>I
implicitly identified 11>elf u the subject of th• complamts. Although such
insullic1ent. the defendant's ;ub;cquent
,,rJf-identi6cation was. b)•
response had the •ffect of confirming the plaintiffs 1dcntit)' and thu1
constituted adequ•tc reference lo the plaintiff. The court am\'cd •I 1h1s
conclusion by interpreting the i111llal Faccbook post and 1U •ub;cquent
co1nn1ent.i; as a
publication (incc that
in its view. ihc nor1n
n1nongst users or social 1ncdin.
S.6 1
'Where n custignting >t•tcment I; mnde In respect of a class. it mny be more
dillicull to prove that the statement refers to a particular member of 1hal
110
Principles of Singapore Business law
Chapter 5: Business Torts
This is because sueh statements are often in tJw
of exaggerated
parties in the course of delivery. Si111ilafly, ii could he reasonably foreseen
Lhat a defo1natory k lltr sent to a wo1nan in a sealed envelope 1nay be
opened and read by her husband. Conversely, the original maker of the
s taten1ent is not liable if it is not reasonable to anticipate that a staten1ent
would be communicated to a third party. 'lhus A is not liable if he sends a
defamatory letter addressed to B but the Jetter is in fuel opened by C, who is
not autl\orised to do so.
grneralisalions that arr not inte nded to be laken seriously. 'TiluS, a rt1nark
to the effect th'H all lawyers are liars Is not usually actionable un.less it
could be proven to be referring to a particulnr individual. However, there
is no ruk that an individual 1nay not sue for dcfan1a1ion o n a staltn1cnt
directed at a class. Ultimately, the test is whether, on its m1e co1tstruction,
the statement could !be understood b)' a third person as referring to the
plaintiff (sec K1111pffcr v Lo11do11 Express Newspaper (1944)). 'lhi s may be
the case where the allegation is specific and the class is determinate. In
DHKW Mnr·keli11g 11 Natures Farm Pie Ltd ( 1999), the defendant had in
its advertisement claimed that it was the only distributor of the "original"
prcnogenol. This was found lo be defamatory of all otl1er distributors who
hnd also advertised their products as "original" pycnogenol, as it
that the latter were passing off their products as those of the defendant.
The plaintiff, one of those other distributors, thus succeeded in its action
against the defendant for defamation. Even though the advertisement
did not make explici.t rdercncc to the plaintiff, ii was sufficicnl thnt the
plaintiff was a member of a determinate class of persons that the defendant
had defamed.
5.64
(3) Publication
5.62
5.63
An nction for defamalio11 also requires proof that 1hc nllcgedl)' defamatory
matter has been published, that is. that the defomator)' matter has been
mnde known to a th ird person other than the plaintiff. Thus, a person
cni>not complain of being defamed if the defamatory matter was
conununicnted to hin1 alone. 11)c rationale is that o person's reputation is
the esteen1 with which others regard hin1 and not hi.s
1he
requirement is onl)' satisfied wht"e the defomatory meaning of the words
has been convered. For that reason, thNe is no publication 1f the person
to who1n Lhe 1natter is con1n1unicated doc.s nol unclersta.ncl the language in
which it is cxpl'essed.
autho rised the third parties to whom the slate111ents were ntade to
them. then he will be liable for their subsequent public.ation together with
the third parties (sec I.cc Kun11 \'cw v Chee Soon )11011 (2003)).
[l is not neces!iary lo prove in every case that thr defo.1natory n1atter has in
fact been shown or communicated to t1 third person. It i' >uflicienl If the
plaintiff could show that the statement or material would. i11 the ordinary
of cvcnti, be reasonably expected to come to the allent ion of third
parties. '11ius. if u lib el is written 011 the back of a po>tcard and sent by
post. it may reasonably be assumed that its content has been read by third
, 11
To prove that materials disseminated through t he Internet have been published
in a particular jurisdiction, it is
to show that the n1aterials have
been accessed and downloaded by readers in that jurisdiction (sec Qi11gdao
llolwi Co11struclio11 Group Co, Ltd v Go/1 Teck Bmg (2016)). Publication may
a lso be inferred if a site has many subscribm from that jurisdiction. However.
the mere fact that the materials arc publicly accessible is not suffident. In
practice, this does not impose an onerous bc1 rden of proof since all that is
1'cquired is e,•idencc that one person other than the defamed person has
accessed the site. Likewise) an email is published in a jurisdiclion when it
has been received and read by someone other than the defamed party in
that jurisdiction. ll should, however, be noted that an action for defamat ion
rnny be struck oul as an abuse of process if the rcputnt ional da111agc caused
by the publication is trivial due, for example. to its limited publication
(sec \'a11 )1111 " Attomey-Genert1/ (2015)). Liability for defumotion is not
restricted lo the original author. Once the fact of publicaticm is established,
every person who publishes, or procures or takes part in a publication is
liable as a publisher. Where a defamatory statement has been reproduced.
liability generally lit< with the party respons ible for the reproduction and
11ot the original maker of the s1atement. He nce, the journalist, newspaper
a nd printer of n libellous article are liable for repeating libellous remarks
even when they have attributed such remarks to the orii;inal sources (though
such attribution may be a relevant mitigating foctor for purposes of assessing
d:images). Where, however, the originator of the statement hns intended or
5.65
A person may also be liable for publishing a defamatory statement if he has
c:ontrol over its publication but tai ls lo withdraw it (rom third-party nccess
even after he has been inrorn1cd of its defiunnlory character (see Byrne v
112
Principles of Singapore Business law
Chapter 5: Business Torts
De1111e (1937)). In the modern eontex1 where mueh of public communication
is tranSnlitlt d through the lnlt.'rntl, tht qurstion has arisen as to whrthtr
providers oflnternet publishing platfom1s could incur liability as "publishers"
on this ground. In the UK, it is established that a provider is not liable as
a secondary publisher if it does no more than facilitate the pub! icocion of
a defamatory <tatement and has neither knowledge of nor control over its
content (see 7lmriz v Google (20 13)). 1liis is consistent with the defence of
innocent disseminatie>n al common law (see para 5.86).
5.66
Defences
(1) Justification
5.67
s late1nent is lruc in substance and in fact. 'lhe onus is on the defendant to
dcn1o ns trate thnt the subst:lncc or gist of the charge is Lrue. but he is not
required to .substantiate every detail or con"Lrnenl that does nol nlaterially
add to the main charge (see further, s 8 DA). Obviously, the justification
must relate 10 the precise words that are the subject of the claimant's
complaint and not a version which is materially different from that
asserted by the plaintiff. It must also relm to the full breadth of the
offending statement. Tiius, 1he defence would fail in rcla1ion to an
a llegation that the plaintiff is a "libellous journalist" if it were merely
proven that he had once incurred liability for libel because a single incident
would not justify the imputation that the plnintiff is habitually libellous
(sec Wrrkley v Cooke (1849)). Wher<· an innuendo is pkaded, both the
b:1sic facts or the offending statement and the innuendo will have to be
justified. Jf a dc..famatory s tatc 111enl con1prises a con'lment, the dcfondant
must est:tblish both the truth of the facts on which the comment was
In Sing<ipore, this defence of innocent dissemination has been stntutorily
reinforced bys 26( t)(a) Electronic Transactions Act (Cap 88, 2011 Rev Ed)
("ETA"). The provision makes clear that a network service provider ("NSP")
is 1101 liable for the "making, publiealion. dissemination or distribu1ion·
of third-party materials if the NSP has done no more than merely provide
nccess to such 1naterials. However, an NSP in the UK who fails to pron1ptly
remove umnre and offensive postings after having been informed of tlte sarne
rn:ty nol rely on the (English) .<tatutory defence of innocent dissemin:ttion
because its conduc1 could not fairly be said to be innocent (see •Godfrey v
Demon /11teruct Ud (2000)). In 1nmiz v Google (20 13), the English Court
of Appeal held that Google was a publishrr of a defamatory !biog post
because it had foiled 10 remove the post within a reasonable period of time
after it had been ale rted to its offensive.• content (although the clnin1 was
ultimately dismissed as an abuse of process as the resultant damage 1•as
likely trivial). Simil:tr attempts have been made lo impose liability on search
engine providers as secondary publishers. In Me1ropolitn11 /11tematio11nl
Sc/tools Ltd v Dcsig11tec/111ica Corpn (20 11), the English High Court held
that a search engine operator (Googk) could not be liable for the snippets
of libellous statements reproduced in the search results because it has token
no posit ive step except provide the use of a fully automated searcJi service.
Whether or not a seal'ch engine operntor could be lfoble as a publisher after
it has been notified o f the offending material would depend on the •ction
taken in response to the compl•int. In that connection, it is importan1 to
bear in tnind that, unlike a web host, the operators of
engines do
not have control over the content hosted on the Internet. While they may
block the display (bul no1 ncces>) of specific websites, tltey have no control
over the sea1·ch terms entered by the users. and may not be able IQ block
words wilhout
blocking a
amount of
non-offending
material.
, 13
As we have noted (sec para 5.48), it is not part of the plaintiff's case
to prove that the defamatory statement is untrue. The defendant may,
however, raise the defence of justification by proving that the defamatory
based and 1hat the con1n1ent itself was \'w'arranted on those focts (but
see para 5.70 on the distinction between this defence and that of fair
comment). Generally, where just ification is est;1blished, it nets as a complete
defence ag<1i nst the plaintiff's claims. Signi ficantly, however, it has been
observed, obitcr. in the unreported decision of Ar11/ Cl11l11dra11 v Chew
Chin Aik (2000) that excep1ionally, public policy may intervene to defeat
where the defendant has engaged in malicious
the defence of
muck-raking b)' resurrecting events of buried past with the 50/c Intention of
i nflicling injury on the plainti ff.
(2) Fair comment
5.68
This defence seeks to pro1ect honest and foir criticisms on matters of public
interest. The defence succeeds where It can be established that: (1) the words
complained of are in the nature of a conuncm: (2) the comment is based on
true facts: (3) the comment or opinion expressed ls fair: and (4) it relates lo
n matter of public interest.
114
Principlr:s of Singaport: Business law
Chapter 5: Business Torts
(a) Comment
prejudiee and exaggeralion entertained by such a fair-minded man" (see
5.69
Lee Kuan Yew v Davies ( 1989) al 170)) in mllking the assessment. 'Ibis
requiremen1 does not therefore manda1e a t>alanced or impartial view and
'l hc defence onl)' applies to statcn1enls which arc in the nature of a co1nn1ent
or opinion, as opposed to asser1ions of focts. 111is distinction has to be
determined oujectively, that is, "whether an ordinary reasonable reader on
reading the whole article would understand the words as a contn'lent or a
statement offuct" (see Lee Kuan Yew v Davies (1989) at [541). This distinction
is not ahvays
as the s:in1e word:; n1ay be factual in one concext and
yet constitute a corninent in another. 'l11is wa.s illustrated by LP 'fhean J,
who obsen•C<i in Davies that "if it is said of a member of the Bar that he
is unfit to be a meml>cr of the Bar. that st•tement by itself is one of foct.
On the other hand) if the sa1nc state1nent wa.s prefaced by a s-tatc:inent that
the member of the
has been convicted of cheating, then ll1e statement
becomes a comment" (at (531). Ultimately, the aMwer would depend on the
nature
or the
llnputation
rnay even adn1it con'ln1ents that are biased, e:<-aggerat.ed or \\'Tong. Ulti1nately,
the honesty (or lack ll1crcof) with which the opinion is held is the most
critical factor in e;1ch case.
(d) Public Interest
5.73
a.s well as the context and drcun1stances in
which the words arc published.
5.70
of public intC'res:ts include n'latters relating l-0 politics, religion, public acts
de(cndant pleading fair con11nent is not required to prove the lruth of the
comment, but only that it is fair and honest!)' held. If just ification is sought
in respect of'"' opinion, the defendant will have to satisfy the more onerous
burden of proving thai the opin ion expressed is correct.
(b) Comment is based on true facts
A fair co1nn1cnt n1u.sl be based on Lruc focts. It is not necessary LO prove thnt
all the focts pleaded in suppori of the comment are true, but only those focts
that are material and s utlident to form the basis of the comment (see further,
s 9 DA). A dd'cndunl may not r<ly on facts which only arise subs.quent
10 the publication to substanth1te his comments. 11 seems. however. that
reliance may be placed on foc1s which are publicly known al the time of
the publication even if 1hey arc not >pcdfically set ou1 in tlic publicalion
containing the offe11<ling comment.
(c) Comment is fair
5.72
of public figures, workings of public institutions. publicn1ions.
'( he restriction of the fair co1n1nent defence to expressions of opinion sen·e.s
as an important distinct ion betwecr1 the defences of fair comment and
just ification.
the latter applies to both fac1s and opinions. Fur1her, a
5.7 1
A mllller is of public interest if it is ·such •• to affect people at large, so 1hat
they may be legitimately i11tere.1ed in, or concerned al, what is going on; or
what may happen to them or others" (sec Lorodo11 Artists Ltd v Utt/er Gmde
Orga11isatio11 Ltd ( 1969) at 13911). 'Lhis requirement rcOccts the rationale
underlying the defence: tha1 honest criticism is essential to the proper and
etlicient managcmen1 of public institutions nnd offices. Examples of mailers
A comment is fair if ii is an opmron which could be honestly held by a
fair-minded person and "ever)' allowance or latitude is to be given for any
115
a nd an)' o ther \\forks intended for publ ic consun'lption.
(e) Effect of malice
5.74
The defence of fair comment will be defeated if the plaintiff succeeds in
adducing evidence thal the defend:mt's comments are in fact motiva1ed by
1nnlice. l he presun1ption is thnt a coinnlent that is coloured or distorted by
malice cannot be fair. So long us the clement of malice is established, the
defence cannot stand even if the snme comment could have been made by
sorne o ther per.son hones Ily and without in a lice (.see '/honuu v Bradbury,
Agnew & Co Ltd (1906)). It hus previously been assumed Lhat the 1cst of
rnalice is identical for both the defences of fair comment and qualified
privilege (see para 5.79). In Cheng Albert v Tse Wai C/11111 Prml (2000),
however, the t-long Kong Court of final Appeal held otherwise. For the
purposes of qualified privilege, malice is pro"ed once the defendant misu.<es
the privileged occasion for some purpose other than that for which the
privilege is accorded. In comparison, a fair comment could only lose its
i mmu nily b)' proving th<il the defendant did not genuinely hold the view
he expressed. Honesty of belief is thus the touchstone, and actunlion by
s pite. animosity, intent 10 injure or other mo tivation did not of itself defeat
the defence ot' fair comment. In Singapore, this distinction has also been
anirmed by Lhe Cour1 of Appeal in Basil A111!1011y Herman v Premier Security
Co-operative Lit/ (2010).
116
Principles of Singapore Business law
Chapter 5: Business Torts
(3) Absolute privilege
(c) Executive matters
5. 75
5.78
'l his de-fence arose fr-0n1 the law·s rccog nilion that there are occasions on
which one must be assured complete liberty to express oneself without
the fear of incurring liability for defamation. Once a communication or
publication falls withi n Lhe recognised
Some cases have held thal certain co1nmunic ations 1nade by n1inistc rs and
c ivil sen'allls concerning lhe aifairs of the state are absolutely privileged.
Thus. the advice given by a minister to 1he Government and official
conununic.ations 1nade bclween officers of st.ate in the course oi their duty
would fall within the province of this defence. 'Tiie exacl ambit of this head
of absolute pri,·ilege L<. however, unclear. The general view appears 10 be thal
of protected occ.osions. no
civil action may be commenced by anyone in respect thereof. The privilege
accorded is n/Jsolutc because it may not (unlike maners protected by qualified
privilege as LO which sec para 5.79) be defeated e\'en by evidence that the
pri\•ilegcd publicat ion has been actuated by malice. The various occasions on
which absolute privilege arises arc discussed in paras 5.76- 5.78.
it is not a blanket proteclion of all co1nmun ications made within lhe civil
service.
( 4) QuaI ified privilege
(a) Parliamentary proceedings
5.76
(o) Malice
Absolute privilege is accorded to all parliamentary proceedings pursuant to
the provisions of the Parliament (Privileges. Immunities and Powers) Act
(Cap 217, 2000 Rev Ed) ("PPIPA"). Members of Parliament are therefore
hn mmie from both civil and criminal law suits for any potentially slanderous
remarks made in the course of parlioment'1ry proceedings. The immunity is
5.79
i.C is shown that the o ffending com1nunicatio n is made
a dcfendanl acts maliciously if he makes a statement wilh the dominant
p urpose of causing injury 10 the plaintiff. since such a purpose would clearly
nol be condoned by the law (sec Lim Eng Hock Peter v Lin Jinn Wei (2010)).
t\ defendant who publishes a defamatory stalemcnt knowing it 10 be folsc
acts maliciously for an improper mot ive unless he is under a legal d<ny to
(b) /udlcial proceedings
the in(orn1atio n 1AriLhoul e ndo rsing it. For Lhis: purpose, knowledge
includes reckless indifference Lo lhc lrulh. bul mere carelessness would not
be sufficient. Malice may also be inferred from the publicalion itself, as
p ru;..'i on
The privilege otrnched to judicial proceedings is founded primarily on the
co1n n1on law. No acti<>n rnay be brought against any person taking part in a
legal suit including judges, counsels. witnesses and pttrties. The protection is
available for all stages of judicial proceedings. The same privilege also anaches
whe re the wo rd.s used arc greatly exaggerated
C>r
bear littJe or no re1ation to
the facts. or whe1'C the publication is dissemi11ated to a much wider group of
people than is in fact w•rranted. Evidence of t he part ies' relations before and
to state1nent.s 1nadc ·in the course of proceedings in tribunals or bodies
117
the defendant
is) a purpose other than that for which the- law confers pro tection. 'l hus,
publication of which is directly authorised by Parliament. 1lic rcproduclion
of extracts from such malerials is. however. only accorded qualified privilege
(sec ss 7 and 8 Pl'IPA ).
recognised by law and acting judicially. Under s 11 DA, a fair. acc-urate and
contemporaneous rero1·t of judicial proceedings which are publicly heard is
absolutely privileged, and the <ame applies to Oil)' comment on such report
if the comment is "fair and bo1111 fidc". Jlowcver, gratuitous complaints to
prosecuting authorities are protected only by qualified privilege and not
absolute privilege. This strikes an appropriate balance between encouraging
the public 10 rcpon u nlawful conduct 10 relevant aulhorilics and ensuring
that individuals arc not vexed a.nd harassed b)' maliclous
(see
Golt Lny Kh im 11 Isabel Redrup Agency l'te Ltd (20 17)).
by
maliciously, the pica of qualified privilege etrnnot be maintained. Malice is
the use of a privileged occasion for an indirect or wrongful purpose. thal
extended to all reports, ptipers and journals relating to such procee dings. the
5.77
Unlike the defence of absolute privilege, qua.lified privilege does not afford
the defendant complete immunily regardless of his moli\•es. Thus. where
a fte r the publication, as \\'e1l a.s the defendant's conduct in lhe course of the
proceedings. will also be relevant
10
the qucslion of malice.
(b) Communications between persons with corresponding interests ond duties
5.80
If A has an intcresl or duty (whether legal, social or moral) Lo communicate
information regarding ll to C. and Chas a
interest or duty to
receive that information. then such communication is prolected by qualified
11 8
Pnnc1ples of S1n9;iport Business Law
Chapter 5: Buiint-ss forts
mm tf ii i$ fo faet defarna1ory of B. Since the privilege is founded
on the respective intere>IS and dutirs of the communicating partic;, it
logically follows that 11 will ooly extend to comrnu111ca11on which is rde>'<lllt
to
S.82
duty and intcrcsls; extraneous and unconnected sta1ements are
ll1errfore not protected. Charactrr rcfcrrncc> given by employers in respect
of former c111plo)'ees (see Kelly " Par1i11gto11 (1833)) ond communications
made by solicitors in fur1herance of d ienls' interests (sec Wet Jlidinrd "
Wo11g Mc1111
6- l'ar111ers (1995)) nrc >Omc examples of privikgcd
comm\111ica1ions. A111•ounceme111s made by a listed company pursun111 lo the
relcvanl lisiing rules would also be privileged as the compony is under a
lcg;I duly 10 publish the information while lhe sh:1rcholder> and in\'esling
public have conesponding inleresls in receiving the mforma11on (see Hady
Hartnnto v
Kit Ho11g (2014)). Uhima1ely, 1hc qur•llon whether the parties
ha"e corresponding <.luti<> and mtcreM> to give and receive the relC\'llJll
inform3tio11 1s a factual enqwry. but "50mc \'3guc. tll·d<fin<d .rnsc of moral
or social duty to communicate tho said mforma11on· will cloarly not suffice
(sec Go/1 I.a)' Kltim v lsnbd Redrup Agency Pt< Lttl (2017) at ISO)).
5.81
(c) StottmtnU madt to protect stlf-inttmu
'Jhc rcciprocily of duty or i111ere<1 bc1wccn lhe >pcakcr and tho recipient is
an essenth1l fcalure of this defence but lhal does not require the respectl\'e
inlcrcsl.< 01· duties of the two parlies 10 be idcmical. In Wmt v Lo11gsdo11
( 1930). the dcfcndnnl. a dircclor of 1hc Sco11bh Petroleum Comp,my
("SPC"). 1cccived a leucr from one B (n 111anogc1· of SPC's o peralio11s
in Morocco). accusing lhe claimanl (the 111J11aging dircclor of the same
opcrnlions) of immomlily. drunkmnc>S nnd dtshoncsly. 'l he <lefendam
replied 10 R $1almg his own suspicions of the •ame conduct and showed 11
to S. 1ho chairman of SPC, as well as 1ho defendant-. w1fo. All the allegations
;gaoml the pbinhfT were unfounded. It wa> held that the publication of
tho roply 10 R and S was clearly priv1logcd. 111e deftndanl and 8, being
tmployc.. of the •am• company. had a common intore<t in the affail'$ of
lhe company. 'lhe defendant also owed a moral dul)' lo inform S. whose
intcresi 111 the mailer arose from the fact of the plainufT's rinployrnent b)•
the company and the foct that he might be reqmrcd to prcl1'1de testimonials
10 1he plnmt ifT's fulure employm;. 'Ilic pubhcallon 10 the plaintiff's wife
was, however, not privileged. Whilsl the wife undoub1edl)' hnd a n intcresl
in nny i11for111a1lo11 relating 10 her husband's cond11c1, the defend:.ull had
no inlcrest or duly to communirnle 1hc inforomtion 10 her pari iculurly in
view of the doubtful source from which the lnformnlion was derived.
119
Qualified privilege is also conferred on statements made with a \'1rw lo
defending the defendant's own interests. If, for instance, a defendant has
been accused of chea11ng. he 111")' lrguimaioly respond by dcn1ong 1hr
accusalion ond accuse the plainliff of lying;. Again, such priv1lcgr "'ould
onl)' be available 10 the extent necessary for 1h e protecuon of the defendant",
and would not auach to
or
ren1arks ($ee Ada,,,
"'Ward ( 1917)). In olhcr word>. !his defence "only enables the defendant lo
repel the charges made against him by the plainliff. bul not to bring fresh
M d irrelevant nccusalions ngain<t the plaintiff" (see Review P11blis/1111g Co
Ltd v Lee llsien Loo1111 (20 10) at I 1581). 'l hus, a defendant who has been
accused of cheating may counter !hat the plaintiff is lying, but he may nol
QSSert that the plamtiff 1s hm1Self • thief.
(d) RtporlS of proceedings
S.83
At common law, rrport• of parliamentary and iudicial proceeding; which
are fair a11d accuratr are the <ubjoc1 of qualified pnV11ege. Although thor• arc
now legislative provisions conferring absolute privilege on reports of both
parliamcntat y and 1udic1al procccdlnss (see paras 5.76-5.78), the pnv1lei;e
conferred al conllnon la\\' re1nains relevant as it riffects a n1uch broader
d ass of rcporls. Sis nifictrntly. s 12 DA expressly prcsen •cs lhc uvailabilll)'
o f qualified pl'ivllcgc for newspaper reports of p;irliamcntary and judicial
proceedings and extends 1hc privilege to similar reporls of proceedings In
the Commonwenhh.
(t ) M otteu of public inttmt
5.84
In the UK. 1he House of Lord< docuion in Rty11olds 1• Timrs Newspapus
Lid (2001) wu sa1d 10 h»'< ushered on a media-friendly regime that ga"e
pnority to free speech over the protection of reputation. In thal doc1>1on,
the court accepted that defamatory maierial may be pmoleged if 11 relate<
to a maller of public inlcrcst and 1f lhe defendant satisfies lhe "re;pon•ible
journalism 1es1·. In deciding whc1hcr 1hc "responsible journalism lesl" 1>
satisfied. the court lll1> 10 rnkc in10 nccounl the seriou; noss of the alltga11on.
t he nature, source and l'> l:Hus o f the in(onna tion, lhe steps takt n to verify
the information, the urgency of 1hc maller. whtthcr comment was sought
from the plaintiff. whether 1hc an k le contained the gist of 1hc plal111iirs
side of the story, lhe lone l)f lhe article and 1he circumslances (mcludmg
120
Pnnc1plts of S1ng;iport Business Law
Chapttr S: Busintts Torts
the timing) of the publication (see Rty110/ds v Timts Newspapm Ltd (2001)
at p 205). These fae1ors are not individual hurdle< that a defend:int has to
cross, but should be looked at as a whole in deciding whether the defendant
has acted rtsponsibly and fairly in the investigauon and research of the
subiect mauer (sec Jameel (Molwmmed) v \\'nit Strrrr fmmrnl Er.rope Sprl
(2007)).
5.85
In Review P11blishing Co Ltd v Lee lisic11 Loo11g (2010), lhc Courl of Appeal
clarified lhtll the Reyrrolds privilege did not form ptlrl of the common law
of Singapore. If lhc defence were to be adopled, it would have to be justified
as an aspecl of a citizen's constitutional righl to freedom of expression
under Art 14(a) of the Singapore Constitution. 1hus. the crucial question
wa. whether a citizen's constitutional right to froc speech ought to be
undtrpinned by the Rtynolds rationale. so that "comlltutional ftte speech
becon1u the rule and restrictions on thi$ rrght become the exception" (see
R<1•1tw Pub/1u1i11g Co J.td v Lu Hsit11 Loong at (266)). On the fae1s of the
case, this was not an issue because the defendant, not being a Singapore
citizen, did not have the standing to in\'oke • co111en's conslllutional rights.
Nevenhelc.s. the Court of Appeal acknowledged thnt it was nn important
qut>t io n insofar as Singapore citizens were concerned. and one that was
likely to be rniscd again in the future. When such occllsion :.rises, 1he
presiding coul'l lrns lo be m indful of the extenl to which they could
properly decide whcr< the balance betwccn free >pcech and protection of
rcputalion ought to li e, bearing in mind thal the queslion is ultimately one
that CJll> for vnlue judgment against the backdrop of locnl polilical and
social condition<.
(S) Innocent dissemination
5.86
A pcMn who. not tx,ing the author. first or main publisher and printer of
a defamatory •tatement, participated in the distribution of >Uch a statement
may be free from liability on account of innocent
if he can
pro"c !hat he did not know that the printed material contained a libel, that
1hcrc wa.s nothing in the circun1stances or the work that cou1d have alerted
him lo ils libellous conient and 1ha1 such ignorance wns 001 dcre lo any
negligence on his part (see Vizetclly v Mru/ie'.1 Select l.ibrnry I.Id ( 1900)}. 1liis
defence generally protects innocenl intermcdinri0> such llS retail vendors,
libraries and delivery ngents.
121
(6) Offer of amends
S.87
Section 7 DA allows a person who has innocently defamed anothrr to
acquire a defence against liability by making an "offer of
Such an
offer must include the offer to publish a public apology to the aggrieved
party and lo take ;uch steps that may be reasonably practical to inform
t hose to whom copies of lhe o riginal publicntion have been distributed that
t he content of the publication is nllcgcd to be defamatory of the aggrieved
party. If the offer o r llmends is accepted by the aggrieved parly and is duly
performed, then the aggrieved party may nol take any legal action, or in
the event where such action has already been conunenced, n1ay discontinue
such proceedings. If, however, the aggrieved party does not accept the offer
of amends. then such an offer shall constitute a defence against any libel or
slander suit instituted by the •ggrreved party against the publisher.
Remedies
S.88
Whore a plaintiff succrcds in a defamation su it, damages would generally be
awarded to compensate him for the loss of his reputation. Except for cases
of slander, which require proor of special damage (see para S.47). damages
for defamalion arc >aid lo be "at
·nii.< means that damages art not
limited to proven monelnry losses but may include substantial awards for
"loss of reputation, injured rcellngs. bad o r good cond uct by ei1hcr party.
o r punishment" (sec C11sscll 6' Co Ltd v Broome (1972) at p 1073). 1hc
award of damnges may be aggravated by foctors such as the defend.mt$
malicious motives, the slnnding and prominence of both the plaintrll and
the defendant, the gravity of the libel, 1he manner and extent of the
publication as well as the defendant'> conduct from the time of publication
to the closure of
CoO\·ersely, the award may be motig.icd by
evidence of an hone>t behcf on the truth of the public:ition, the pubhcallon
of or an offer to publi;h an apologi• (..,e s I O DA}, any misconduct of the
plaintiff at the materi•I trme and evidence of his general bad r<putation.
Exemplary or punrtivc damage• art not generally available in a hbd surt
excepl where the compcnsaiory award is insufficient to "puni>h" the
defendant for his ouirngeoll> conducl. Special damages may be recovrrnblc
in respect of pal'licuhtr pecuniary damage t hat a claimant ;urfers beyond
that of general damage. Ilowc1•cr, such µccuninry losses rnu>I be due 10 his
repulationai damage and nrc subject 10 the usual conditions of causntion and
r:e1noteness.
122
Chapttr 5: Bu.. intts Tons
5.89
A suecessrul plaintiff in a defamation suit may also seek an injunetion
to prevent the future publication of a.ny dcfomaaory matter where such
further publication is reasonably apprehended More rarely, an interlocutory
injunction may be awarded to forestall the publication of an allrgedly
defamatory mJtter but the court;. are undemandably more guarded in
disprnsing such order• so as not to unposc any undue restrarnt on the ngbt
of free spcech. It is also pouible, in exceptional circumsa•nces, to obtain a
mandatory injunction to compel the retraction of a defamatory s1atemen1
(see Cimo 811>• C/1111g v Mtr<l1a111 l't11111rcs Pit lrd (2005)}.
C ON CLUSION
5.90
The 1orts considered 111 the fir<t pan of tho< chapter - inducing breach of
contract, compiraey, anthnidation and cau>ing loss b)• unlawful means arc pnmarili• intentio11al, and often Indirect. torts. In recent years, litigating
parties ha\'e often a11emptcd to use ahe.c cause< of oclion 10 extend liability
beyond the orii;inal wrongdoer. Thus, the challenge confronting Ute courts
in this area Is the need to define these torts more dearly so as n<>t to overextend linbillty. lhe tQl'l of defamn11on, 011 1he other hand, has 10 contend
with novel questions conccrnil'lij 1hc linlhs of free :i.pccch as connnunicalion
grows cxponentinll)• with the rise of the new media. As such, the law in
1his context will increasingly lrnve 10 grnpplc wl1 h the diverse nnd conOicling
inleresls of co111111<.•rcial cnlcl'prhes {in innovat ion nnd profiL ge nenll ion),
privntc individuals (in freedom of expression and 1•cputntional pro1ccLion) as
well as members of the public (In 1he free flow of infor111a1io11).
123
This page i111e111io11a/ly left bhmk
Principles of Singapote Business Law
Chapter 6
Negligence
6.78
6.79- 6.80
Mitigation of Damage
Assessment of Damage
Defences
Ex Turpi Causn
6.8 1-6.83
6.84- 6.86
6.87
6.88-6.89
Volenti Nou Fit Injuria
Exemption of Liability
Contributoq• Negligence
·n1e Main Judici"l Formulations for Duty of C"rc
6.90
6.91-6.93
Other Issues
Vicarious Liability
6.15-6.21
Tile Singapore! Position
6.94- 6.95
Director's Liability for Company's Negligence
6.22
6.23-6.27
Duty or Care: Various Scenarios
( l) Negligenl act or omission causing personal injury or physical
damage
(2) NegIi gent misstatements causing economic Joss
(3) Negligent m isstatements causing physical damage
{4) Negligerrt acts or on1issions causing econon1ic loss
(5) Negligent acts or omissions causing nervous shock or
psychiatr ic harm
6.96
6.97-6.99
Concur rent Liability in the Tort o( Negligence and in Contract
Limitaiion Periods
6.1-6.2
Introduction
6.3- 6.4
The Legal Requirements
6.5- 6.6
Duty of Care
6.7-6. 14
6.28-6.35
6.36-6.37
6.38- 6.42
6.43-6.47
6.48
Conclusion
Breach of Duty of Care
Factors to Determine the Standard of Care
6.49- 6.52
6.53- 6.56
Standard o f C are Relating lo Pro fessio nals and Professional
6.57- 6.60
6.6 1-6.62
Standards and Practice
Use of Expert Evidence in Determining tl1e Standard of C are
Res Ipsn Loq14ilur
6.63
6.100
6.64-6.67
6.68- 6.70
6.7 1-6.72
Causation of Da1nage
Factual Causation
( l) "But for.. test
(2) Material contribution
Legal Causation
6.73- 6.75
6.76-6.77
Remoteness ef Damage
General Principles
Special Circumshu1ces of the Phiinliff
10
damage
126
Chapter G: Negligence
6.4
INTRODUCTION
6.J
Principles of Singapote Business Law
Jn Lhc previous chaplcr, we cxa1nincd a catcgor)' of
known as business
torts - these deal with legal liability that arises from a defendant's i111c111ionnl
conduct thal causes harm to the vict iln's trade and econoJnic interests. 11"1is
chapter deals with legal liability and consequencC-< arising from negligent
conduct. 111e terms "negligent" or "negligence" connote, in layman's language,
conduct or
perfonned carelessly or v.rithout proper care. Ho\. .·ever, not
all fo rms or types of negligent conduct, acts or omissions will attract lcgnl
linbility under the tort of negligence. There are legal rules that define the
appropriate parnmeters relating to the range of potential defendants and
the scope of liability. 'They sen•c to delineate the circumstances in which a
o
the tort of negligence.
111e situations in which the tort of negligence may feature in our lives and
society are varied. They include the typical car accident arising from the
negligence of the driver, the negligent advice given by a professional such
as an auditor or lawye1'. the negligent construction or design of a house
or building, and the negligent acts and on1issions of n1anufacturers and
dislributors of products. 'lhc list is by no n1cans exhaustive and lhc categories
of negligence are not closed.
voluntary assumption of risk (volc11ti no1t fir i11juria);
o
exemption of liability; and
o
contributory negligence.
D UTY OF (ARE
6.5
T HE L ECAL R EQUIREM ENTS
6.3
illegality (ex turpi musn);
o
If either of the first two defences is proved, the defendant is not legally
l.iablc al all to the plaintiff under the tort of negligence. If the defence
o f contributory negligence is proved, the defendant will only be partially
liable to the plaintiff. As for exemptio n of liability, it depends on whether
the purported exemption entirely excludes or merely limits the extent of
l.iability.
careles,o; act or omission that ca11ses harm may result in legal liability under
6.2
If the above legal requirements are met, the plaintiff would succeed in his
action in negligence against the defendant unless the defendant can raise
valid defences. The defences covered in this c hapter are as follows:
The starting point for an actio n in the tort of negligence is the duty of care
issue. Lawyers and judges have had to grapple with this thorny and complex
concept since the landmark English decisio n of Do11ogliuc v Steve11Jo11
(1932). 111e central question is what would be an appropriate test to apply,
to decide if a d uty of care o ught lo be imposed o n the defendant whose
1:1egligcnec resulted in harm 10 the plaintiff. The Singapore Court of Appeal
in Spmuleek E11gi11ecri11g Pte Ltd v D4cncc Stiettr.c & Tcc/1110/ogy Agc11cy
(2007) decided upon a two·stage test that considers proximity and policy
considera1ions, which is preceded bi• a preliminary requirement of factual
fo reseeability, fo r establish ing a d uty of care (see below).
The legal requirements necessary for the plaintiff to establish an action in
1he tort of negligence are as follows:
o
the existence of a duty of care owed by the defendant to the plaintiff;
o
the defendant must have bm1c/1cd his or her duty of care to the: plaintiff:
and
o
the defendant'.< breach must have en used the dnmnge mffered by Ilic
plai11tiJJ. 111 addition, the rcs11/ti11g damage ca1111ot be too remote.
With respect to the q uantification of damages, we also need to ascertain if
1he plaintiff had failed to 1;ike reasonable sleps to m itigate its losses, in which
case the plaintiff c:.\nnot clain1 that portion of the dan1ages to the e-xtent that
it was not duly mitigated.
127
6.6
'fhis chapter will attempt to summarise, in chronological order, the
development of what are generally regarded as the main judicial formulations
o r tests for establishing the duty of care in the tort of negligence. since
Do11oglwe's case in 1932. lhis is followed by an explanation of the tests
i nvolved and the legal jargon used in the judicial formulations. An
understanding of what has gone before will be helpful for understanding
(and analysing) the test the Singapore Co" rt of Appeal had adopted in
Spn11dcck.
128
Chapter G: Negligence
Principlr:s of Singaport: Business law
(2) If the answer Lo the above is "yes". are there 'it11y romideratiom wllith
The Main Judicial Formulations for Duty of Care
6.7
We begin with Lord Atkin's dicrum in the abovememjoned case of Donoghue
v Stcven$Oll (1932). In this c<1se. the claimant suffered gastro-enteritis after
consu1n ing ginger beer fro1n a boule that had the decon1posed remain.s of
a snail in it. Her friend had purchased the ginger beer for her and so there
was no contractual rclacionship between 1he dain1ant-consu1ner and 1hc
oughr to 11ext11ivc. or to rcdiicc or limit rite scope of rhe duty or tire class of
persons to whom ii is owed or rite dnmngcs to which the breach of it may
give rise"? (emphasis nddedJ
6.9
the tort of negligence against the manufacturer. With respect to whether the
manufacturer should owe a legal duty of care towards the consumer. Lord
Atkin raised the questio n "\•Vho is
111y
the "neighbour principle" as
'Jlic firsl stage in Awu had been intcrprclcd by English courts as a reasonable
foreseeability test (sec, eg. the test ir1 Do11og/1uc above). 111e second stage
in Awu requires n consideration of any cogent public policy reasons for
negating (ie, not imposing} a duty of care or to limit the scope of any duty
imposed. Policy considerations iiicludc an examination of the interests of
society such as promoting welfore and mor.il standards. Specifically. there
1nanufacturer. Nonetheless. she brought u clairn for personal injury under
neighbour?" and proceeded to outline
(at p 580):
is a concern for balancing fairness and justice for n victiln of negligence
and
Mt overburdening 1l1e prny who has been negligent with "liability ill
.in indetennin•tte arnount for an indetcrn1inate tin1e to an indeter1ninate
cln<s" (see Cardozo CJ in Ulrrnmnn-s Corporation v Touclic ( 1931} at ( 17[).
Overburdening the negligent party with liability might not promote the
of society. For example, should the Law impose a legal duty of c;ire
o n the police to prtvent crimes to members of the public? It may be argued
thnt imposing such a duty would not bcncfi t socict)'. It would likely result
in the diversion of significant police resources to dealing with legal actions
against then1 by n1cn1bcrs of the public instead of preventing crime. 'l11is
policy consideration provides " reason for not imposing (ic, negating) o duty
of c;ire on the police for the omission to prevent crimes.
You must lake rcnsonabk care lo avoid ads or omissiom which you
con rcnsonn/lly foresee would be likely to injure your neigh/lour ... persons
who nre so closely and directly nffccred by my net rlwt 1 ouglrt reasonably
to /rave them in contemplntion ns being so nffccttd when I am directing
1ny rnind to the acts and on1issions w·hich are called in question.
!emphasis addedl
As the manufacturer of the ginger beer (product) should be able to reasonobly
foresee that his negli:&ence in making the product would likely injure the
ultimate consumers of the product (such as the plaint iff), the manufacturer
<hould owe a legal duity lo the consumer to take reasonable care to avoid the
hann.
6.8
6.10
In addition. imposing a duty or care in respect of certain types ol' losses
could potentially "open the noodgatcs to liability" and expose the defendant
to indeterminate liability In terms of the amo1rnt of loss, number of
a nd duration of liability. 1l>is could be a ·policy reason for being more
caulious about imposing a duty or care in respect of pure econoJnic loss
(ie, financial loss not assochlted with ally personal lnjuri•. physical damage
o r property damage) and psychiatric harm suffered by indirect vict ims (eg,
one who was traunrnlised by witnessing her loved ones being injured by the
defondant's negligent ;ict).
6. 11
The cose of Spnrtnn Srecl & Alloys Ltd" Mnrriri & Co (Contrnctors) J,rd ( 1973)
provides an illustration. 1hc defendants (building contractors) negligently
cut the electricity supply to the plaintiff's steelworks, causing the plnintitf:I
About 45 years later, ju Anns v Merton LondOll Borough Council ( l 978). the
lessee of a flat claimed against the council for the latter's negligent failure
to carry out inspect ions which resulte<I in in;idequote foundations of the
structure. ·n1e question which arose was whether the defendant (council)
ought to
a duty of care to the plaintiff (le.ssee). Lord Wilberforce (at
[751]- [752]) applied a general and broad two-stage test to establish • duty
of care:
( l) "whether, as between the alleged wrongdoer :md the person who
has suffered damage there is a sufficient relnrionship of proximity or
11cigilbo1u·/1ood stH.:h that, in the rcnsonnblc co11rcmplarion of the former.
ctirelcssness on hi:s part 1nay be likely to cause da1nnge to the l 1u1er''?
129
130
Chapter G: Negligence
Principles of Singapore Business law
furnaee to stop opefating for a few hours. As a result, the steel in the furnace
was ruined. ' I.he court held that the loss of profit for subsequent batches
of steel which might have been produced if electricity had not been halted
(pure economic loss) was nol reco,-erable, for fear of exposing the defendant
in addition to the foreseenbility of damagl, 11cees,1ar1• ingredienl'i
i11 any situa1ion giving rise to a duty of care are that there should
exist between the party owing the duty and the party to whom it is
owed a relationship characterised by the law as one of "proximiry" or
"11eigltbourhood" a11d 1ha1 the situation should be one in which the
cou n considers ii fair. just a11d renso11a/>lc that the law should impose
a duty of a given scope upo11 the one pa1·ty for !lie benefit of another.
to indc1cnninatc liability for an indctcrrninalc a1nount to an indcltrn1inalr
class of persons. Ho"•ever. damages for the materials used in processing
the particular batch of steel at the time when the accident occurr<!d (direct
physical loss) and the loss of profit on thal batch of steel (consequential
economic loss) were held to be recoverable. Hence, ill this way, the court
sought to limit the damage recoverable by reference to an overriding policy
considcral ion.
6.12
!emphasis added J
6.14
Althoogh the second stage of Amis test allowed for a more cautious approach
to the imposition of a duty of care, doubts still arose in England as to the
wisdom of adopting the broad!)• stated test (see Y11c11 Krm l'e11 v Allomcy·
Gerwml of Hong Kong (1988); Govemors of 1/ie Peabody Do11ario11 Fu11d v
Sir UndSfl)' Pflrki11so1> & Co Lui ( 1985)). 'Jhe English courts rcg.arded the
lirs1 stage to be easily satisfied in any particular case. and considered public
policy considerations :at 1he second stage to be too "indefinable" 0 1· imprecise
to ensure a sullicicntl.y balanced approach in imposing a legal duty of care
(see the English ease of M11rpl1y v Brenrwood District C-Owrcll (199L) quoting
(at (46 1J) 1he High Court of Aumalia in S11the11amf Sliirc Co1mcil v Heymn11
( 1985) which rejected the A.1111s lest). 1herc was thus a "retreat" from A.1111s's
test in E11gland.
6.13
In the subsequent decision of Capnro /11d11slries plr 11 Dickman ( 1990).
the House of Lords did nol apply the test in Amis. 1hc cou1·t preferred
an increment"11 (and cautious) approach lo developing new categories of
negligence via an analogy to the established categories (of cases). 1lie
plai11tilf, '' n existing shareholder of a company. bought additional shares in
1he compa11y in reliance on 1hc defendants' audit report. II was alleged that
the accounls of thal company were negligently audited by the defendants
(auditors). The phinti If lost monies as a result of the purchase of shares and
claimed 1h:11 1he defendants. who were engaged by the company. owed a
duty to the plaintiff 10 take re<lsc.>nable care in :u1dit ing the occou:nts of the
company. With rcspe.ct 10 dul)' of care. Lord Bridge in Cnpnro (nt [6171[618]) slated:
The concept of foreseeability has already
mentioned in the case of
Douoghue v Stevenson. "Proxilnity"' refers lo lhe clo.senes.s of the relationship
between !lie parties. We will sec in the next two sect ions what factors were
considered to assess the closeness in lhe p art ies' rela1ionship in decided
court decisions. 'l he lc rnt "fair, just and reaso nablcn is shnilar to the concept
o f public policy co11sidenuions which have a lread)• been discussed in paras
6.9- 6. l I above. It should be noted I hat the elements of foreseeability and
proxin1ity, and fairness, justice and reasonableness/policy considerations 1nay
overlap, In most cases, it is observed that the more foreseeable the harm, the
more likely 1he courts will find that there is "proximity''. In turn, it is more
likely lhe courts will hold th'1t policy considei-ations will result in, or that the
11otions of "fairness, justice and reasonableness" call for, the impositio11 of a
d uty of care.
The Singapore Position
6.15
Rearing in 111ind 1he above llnglish develop111cn1s. it is now 1imely 10
a nal)'se the Singapore approach 10 duty of care. In !lie pas1. the Singapore
courts have applied both a two-stage process aki11 to Lord Wilberforce's
as the C11p11ro three-part test. As mentioned,
two-stage test in 1\m1s '1s
the current Singapore approach is encapsulated in the Court of Appeal
decision in Spnmleck E11gi11eeri11g (S) Pie Ltd v Def"11CC Science & 1'cdmology
Agency (2007) ("Spm1deck"). Jn this case, 1here was n building contract
between a contractor and the e1nployer (the p:1rty who
the
building project). A superintending ollicer was engaged by the employer
to adn1inister nnd supervise the building project. The contr:ictor ntade
a claim against lhc superintending officer for negligently undervaluing
a nd under-cert ifying works carried out b)' 1he con1ractor, resulting in the
contractor being underpaid. However. there ..vns no contractual relntionshlp
, 31
132
Chapter G: Negligence
Principles of Singapore Business law
between the eont factor and the superintending officer. The issue arose as
to whether the superintending officer owed the contractor a duty of C3re
under the tort of negligence in the absence of a cont ractual relat ionsh ip.
a eareless act llas caused physical hafln or psyehbtrie injur1• to plaintiffs
who \\'ere strangers at the 1·elevant rin1e."
6.19
6.16
The Court (at 189]) preferred 10 appl)' a single test 10 determine whether
to impose a duty of care and the scope of such duty in negligence cases,
regardless of the type of damages claimed. This single test is the two·stage
test premised on pro:ximity and policy considerotions, and the applicat ion
of the test is to be preceded by a preliminary requirement of factual
foreseeability.
under the first stage. TI1ese policy considerations involve the ...,veighing and
balancing of competing moral claims and broad social welfare goals" (at
[85]). 1l1is refers to weighing the policy considerations mentioned earlier
(see paras 6.9-6. I t).
6.20
6.1 7
For the preli1ninary require1nent) the court will enquire whether the
cldenclant, on the facts of the case, should be able to reasonab'ly foresee
that his negligence would likely result in harm (any kind of harm) to the
class of people whicl1 included the plaintiff. 111e focus here is typically
the foreseeability of the occ11rre11rc of l1am1 and the class of pcrso11s who
may be affected by the negligent act/stalemenr or omission. According to
the Court (at I 11 5)), t:he threshold requirement of "foc1ual foreseeability"
would likely be fulfilled in almost all cases.
6.18
At the sec-0nd stage, the court will consider whether there arc any
considerations that ought to negative or IL1nil the dut)r th:H has arisen
With respect to the first stage of the test, the concept of 'prnximity"
focuses on the closeness of the relationship between the plaintiff and
defendant, including physical. circumstantial as well us causal proximity
and encompasses the twin criteria of voluntar)' assumption of responsibility
and reliance (al 178]). If the proximity requirement is satisfied, a primn
fndc duty of care •rises (at l83J). In the subsequent case of A11wm· Patrick
Adria11 v Ng
& Hue LLC (2014), the Court of Appeal r<frrred to tl1e
relevance of other proximity factors (the defendant's knowledge of the risk
of harm or of the plaintiff's reliance or vulnerability, and the defendant's
In addition, the Court stored (at (73]) that the single test should be applied
"i11cre111c11tally" (ie, when applying the test in each stage, judges ought to
1'efer to decided cases in analogous situations). In a novel situation. the
j udge is not precluded from extending liability where it is "just and fair
to do so'; taking into ac.count the relevant policy co11sidera1ions against
indeterminate liability (al (731). The Court reiterated (al 169]) that there
should not be a general exclusionary rule against recovery of pure economic
losses. Instead of focusing on the type of damages in order to determine
d uty of e<ire, the court suggested (at 167)) that the
in -.hich
the pure economic los_.; arises would be more importtml. The problem of
indeterminate liability docs not rear its ugly head in all pure economic
loss cases (sec para 6.38 onwards for a discussion of such
Thus,
there .should not be differenl tests for pure econon1ic loss cases as distinct
from physical damage. Nonetheless, the single test for duty of care in
Spandeck may be applied differently depellding on the type of damage
and, 1nore i1nportantly) the drcu1nstnnces giving rise to the dan1age,
given the court's exhortation to refer to :malogous cases in applying the
proximity and policy stages of the test. Possible analogous uses are
considered in the next section.
conlrol over the situation giving rise to the ri.sk of harm).
It should be noted that
eveq• foctor/facet of proximity need be satisfied
in order lo establish proximity. and the relative importance of any factor
would depend on the nature of the negligent deed and the type of harm that
resulted (sec Ramcslr s/o Krislr11fln v AXA Lifi· bimr11ntc Singapore Ptt Lit/
(2015) al (244 1-12471 ). For example, the Singapore High Court in Rn111csl1
observed (al (245]) th"t "the twin concepts of ossumption of responsibility
and reliance tend to h<' n1orl° useful for ... ca.scs: involving negligenl advice or
1101
6.21
The Court decided, on the facts of Spa11deck, that the superintending
officer did not owe any duty to the conlrac101'. Although it was foreseeable
that the negligent certification of the works would deprive the contractor
o f the 1noncys he was entitled to, the proxinlity rcquirtmcnt 'vas not
satisfied. 'lhis w:1s because the building contract between the employer ond
contractor staled Lhut in the ewnl of o dispute re luted to the eont ruct Of
the works. either the en1ployer or contractor n1ay refer t<.> :in :irbitrntor for
provision of professionril services ... lbut are J less irnportant in cases where
133
134
Chapter G: Negligence
Principlr:s of Singaport: Business law
In addition, t heFe is unlikely to be " "lloodgates• problem associated with
in determinate liability and indeterminate scope of potential defendants.
Examples o f such cases are th e typical car accident where the plaintiff suffers
p ersonal injury (or damage to pro perty) arising fro m n egligent d riving
as well as pcrsonttl injuries from the consumption of foods negligently
manufactured by the defendant. Occupiers o f premises may also owe a duty
to take reasonable care to prevent physical injury to persons entering th e
premises (see See Toh Siew Kee v Ho Air Lam Perroremcnt (Pte) Ltd (2013):
BNJ v SMRT Trt1i1ts Ltd (2014)).
resolution. The presenee of lhe arbitration elause in the building eolll met
and the contractual arrangement of the parties (the employer, contractor
and superintending officer) led t he court 10 hold lhat the superintending
officer was not e mployed 10 exercise care cowards the contra.ctor, and
therefore had not ass umed such responsibility towards 1he contTactor (blll
towards the employer) (M 199)-(100] a nd ( 108)}. 111e contrac1or. beiog
content for its rights of compe nsation to be safeguarded by contractual
a rrangement with the e mployer, cou Id not be said to have relied o n the
exercise of care b)• the superintending officer (al 199) and I108)). Under
the policy consideratio n stage, the court noted that since the parties had
chosen 10 regulate their relationsh ip(>) b)• contractual a rrangem ent. this
should nol be u nde rmined by t he imposition of a lorlious duty of care on
l he superintending ()flicer towards lhe contractor (at
6.24
the Pr'isline, was destroyed due lo the transfer of nitric acid c-0nlaminated
by hydraulic oil from 1hc defendant's vessel, 7l1e Sunrise Crane. No one
o n board 7Jie Sll11risc Crn11c provided infort111ation that the subst•nce was
IJ 0 IJ a nd IL 14)}.
Duty of Care: Various Scenarios
6.22
conta1n inated nitric acid which had lo be disposed of b)' alte rnative
means. 111cre was also no contractual relationship
t he plaintiffs
a nd defendants. 111e defendants had requested 1he vessel's Protection &
Indemnity ("P & I") Club for assistance, and th e C lub appointed a surnyor.
"t he surveyor t hen engaged a contracto r ( Pink Energy) for the disposal job
who, in tum, engaged nno cher sub-contractor (Pristine Maritime) to remove
the contan1in:ited cargo. Neither the sub·cr.>ntractor (Pris tine Marilin1e) that
carried o ut the disposal nor Lhc plaintiff was informed of t he mnurc of the
cargo. The Court of Appeal held by a majority (Prakash J dissenting) that
As the Spnndeck test is to be applied incrementally by a nalogy to decided
cases, '"'c will now exa1nine lhc vario us .scenarios and c:ises relevant to
1he issue o f duty of care. Though the Spa11deck 1est applies regardless of the
type of damage. this does not necessarily mean that all types of damage
a rising from negligeAt cond uct arc equally recoverable, due to the greater
fear of opening the Aoodgaces 10 liability for certain types of losses. As
mentioned , physical d amage and p rop erty damage arising from positive
acts arc generally rec.ovcrable as compared to pure c'onomic losses. fttriher,
or
'11ie Sunrise Crnne owed a d ucy
care in the 1or1 of negligence 10 inform
the Pristine of t he nuture o f the cargo imme:diatdy p rior to the tronsfcr of
clahn s in negligence for psychiatric h;irm are normally more rcst rkth'C than
a similar claim for
injuries arising fro m the defendant's negligent
acts. "Physical damage" in th is context refers 10 nclunl physica.I damage
suffered, and docs not include fu ture or potcntfal (physical) dt1m:igc. Mere
defects in construction or funct ionalit)' (eg, in:.idcquate l'Ound:.i.tions of a
the contaminated add . The very dangerous nawre o f the cargo appeored to
be :i significan t fac tor in the majority decision. The fact 1ha1 t he defendant
h t1d informed the contractor ( Pink Energy) of the nature of t he cargo was
i nsufficient to fulfil the d u ty of care.
house o r an engine) are not gene rally treated as ''physical da1nage". but as
econon1ic
because .such defects nlay or nlay not s ubsequently lead to
In cases where personal injury is caused by the positive act of the defendant,
The court in ·m e SJJnrisc Crane (2004) a ppeared (tll [731) 10 h1we a pplied the
Cnpnro three-pa rt 1e.,1. With respect 10 t he proximity element. it referred lo
the physical proxilnity of tht> two vessels which were n1oored alongside when
the disposal opera tion was in progress (ai 1771), a nd to the fac t that the
act o f lrnn,<ferring the con1am ina1ed cn1·go "dfrectly affected" the plaintiff (at
lhr tequirc 1ncnt of ··rensonable foreseeability" would nornutHy be .snli.sfied.
[SO]). 'I here was also n slalc rnent in the judgmcnl, albeit without elab oration,
actual physical damage.
(1) Negligent act or omission causing personal injury o r physical damage
6.23
Not all cases pertaining 10 physical damage arc st raightforward and dear. as
illustrated by t he case of 7J1c Sunrise Crn11c (2004). 111e plaintiff's steel tanker.
6.25
that it was not unfair or unjust to impose n duty of care in the instant case
141]).
(at
135
136
Pnnc1plts ot S1n9;iport Business Law
Chapt•r 6: Nt9li9tn<•
third patty h3s rreated a source of d3nger on the defend3nt's premtsl'\ and
8ox6.1
t.hc d<fendant faikd to take rca.onable >1tps to prNtnt the danger from
damaging the plamtiff's propcny (sec Smr1/1 v Lmlcwoods Otgnmsn11011 Ltd
( 1987)).
Controversy In The Sunrise Crone
The d11>entin9 1ud9ment 1n Th• Sunri"" Cran• h signihcant and should be briefly
menttoncd. Similar lo lhe approach ot the majority judges In Tht S1111rlse Cront,
Prakash I apphed lho Caparo lest. However, Her Honour arrived al a different
conclu>ion. The 1eamed judge ruled that the defendilnt could nol have foreseen
thal lhe tanker sent 10 colle<:Lthe cargo (Prisf/nt) would not have bren Lold of Its
nature, afler having provided lhe contractor (Pink Energy) lhe requisite Information.
In • fairly unusual stance, Her Honour conceded thot, despite Lhe absence of
foreseeability, physlcnl, circumstantial and causal proximity were present in the use.
With respect to the foirncss e lement. the learned judge was ol the view that it is
not fair or reasonable or just to Impose on a party, who engages • quahOed person
lo undtrtakt task, tht duly lO
btfort lht talk coMmtntts, llm
the person actually sent to complete the task is aware of lhe task at hand and the
rtquired. lmpo11ng a duty would, according to the learned fudge, make
the
tor carrying out the duty ol the contractor (Pink EMrgy) to
inform th<- sub-contractor of lhe nature of the cargo and thus, open the floodgates
to claims against a whole new da11 of parties.
Do you agrtt with lhe majonty judgmrnt or the diutntlng fUdgment ln The
(2) Negligent misstatements causing economic loss
6.28
Sunrist Cront?
6.26
In contrn>l to positive acts, there is generally 110 duty of care arising from
mere omis.,ions. There is, for example. no legal duty placed on a pa.<scr-by lo
rescue a drowning man. One undcrliing reason for the currcnl lcgol position
agains1 Imposing n dllty of care Is lhat the law should 1101 unduly i111crfere
wilh • porson's liberty by requiring him lo .,ve •no1her pcr<on with whom
thcrr i> no prior relationship. 'lhc performance of ahruisuc (or heroic) act>
may !><' laudablr, but 1s generally trot legally mand.ied runhrr, lh<re 1s the
potenlial d1fficul1y of •scertaining in (at l•ul) ;omt ca<es the panicular
dcfrnJant respon;1bk wh<re there arc olhcn. who n11ght ha,·r
able to
rffecl lhe rescue.
6.27
1he gencrnl pnncipl• of non-liability for thr defendant's omission to prevent
the plaintiff from ht1rming humelf or to prevcnl a third pany frorn harming
lhe plaintiff Is subject to certain excepl ion;. lhese exceptions include
the following: where lhere is a >pedal 1·clntionship bclween thr plaintiff
and dcfcnd11111 based on u voluntary t1ssump1lon of rcsponslbilll)' by 1hc
dcfcndJnt townrds lhe plointiff, or conirol by lhe defendant over lhe lhird
party cond11c1: nnd wh<r< the defendant knew or ough1 to know that the
137
One notable case on neg Iigcnt misstoternent s is Hedley Bymc & Co Ltd "
I/cl/er & Pnr111ers Utf ( 196'1). llcrc. the plaintiffs (advcriising agents) wi>hed
to do some ndvcrthing work for a company called Eosipower. 1hc defendants
(bankers for Eosipower) negligently provided to the plaintiffs a rdcrcncc on
the crcditworthinc.s of Easipowcr. ·rhr plaintiffs subsequently dain1ed for
financial !ruses when liJsipowcr went mto liquidation. On the fact.<, th<r<
was a valid disclaimer et.us• that tht bank's statement was m•de "without
responsibility on the pm or the bank or i1<
Th\U, the dcfcndanl
bank was not Hable for lhc negligent mmtatement.
1f not for the
disclaimer daus<. th< Hous•
th>t a duty of car• would ha\'c b«n owed
by the defendant bank lo lhe pl•int1ff to take reasonable care m makmg
s tatements which 01hers could reasonably rely upon. The judgmenl< of lhe
law lords indicated that the following foc1ors should be considered when
determining whctht•r o duty of care hod arise n between the plaintiff und lhc
dcfcnda.nt bank:
o
the skill and expertise o( I he maker of
O
whether the mnkcr or the StalC111Cl11 kll0\"5 or ought 10 know thal the
other pcrso11 will rely on lhc s1ntement; nnd
statement:
o
whether the maktr of the statement mlunlarily undenakcs or assurnes
responsibility for making lhc
further. where the reb1ion<h1p between the maker of th< <tattment and the
tecip1en1 is akin to contraci. a duty of care as hkely lo •rise.
6.29
'The rationale for the above ndd111onnl requirements in respeCI of negligent
rnisstntcmcnt> (as compllred to negligent acts cau>ing physical Jamagc
discussed al para 6.23) i> 1ha1 wordi arc more "volatile" than deeds, whilst
damage by ne)lligcnt nets lo persons or properly is more "vhiblc and
ob\'ious" (at p 534). For example. >tnlemcnts made Lo a particular p•rty may
be conveyed or lrnnsmlllcd by the recipienl lo a lhird party or pJrtics. who>C
138
Chap••• 6: N<gli9tntt
Princ1plts of Singapott Busintss law
idenuues may nol be known 10
1113ker of 1he statemem•• :md the imp:iet
of 1ho>e >talcrnen1i. on lhe recipients may not hO\'C bttn contrmplatrd by the
maker. On the olher hand. the effects of ph)'>IC•I 1niury or property damage
arising from one's negligent acts (such u negligent driving) are normally
more obv1ou) and direct.
6.30
The following •tatcments of Lord Devlin (al p 529) are instruclive as to 1he
relevance of paymcnl or lack thereof for the advice:
l'a)•mcnl for informalion or advice is wry good evidence chat lrhe
advice) is being relied upon and 1hn1 rhe informer or adviser knows thal
II as. Where there is no [payment], it will bt necr.sary to exercise grea1er
care in distinguishing b<tween social and profcs•ional rdatfombips and
bcrween those which are of a con1ractual chJr.tCICr and !hose wluch arc
not. II m"l' oft•n be mat<rial 10 consider wherh<r rh• ad.,ser IS acung
purely out of good nalure or whether hr i> geuong hos rrward in .ome
111d1rec1 form.
6.J2
Another important case on negligent ntiS>latemcnts. Cr1poro /11d11stries pie v
Dkk111n11 (1990), held chat rhere was no dury of care owed by the -defendant
auditors to the plaintiff (purchaser of additional sha rr< in a comp;tn)•) in
respect or the dtrenclant's negligent misstatcmcnl cone<rning the ;1Udited
nccou111s of the company. The general principle h thol 110 duly of care is
owed hy rhe auditors of a company 10 individual mrmbers of rhe public at
large (1ncluding the plaintiff) who rely on rhe 1nfornmion to buy shares
in 1he compan)• (see 1> 627). It was hdd that the na1u1ory accounts of
rhe compan)• were to be used 31 the general meetong for ,hareholden;
as a w/10/c and werr not intrnded for
b)• md1vid11al shareholders.
Tho; pnnc1ple h;u been atended 10 pr<clude
on neglJgencc by
lender> and gunantors (of cr<dit factliloe< 10 audned cornp•mcs) aga111st
audilor> for nrgligently prepared audired statement> (sec olso Staudard
Clwrtffctl 81111k v Coopers & lybmud ( 1993): 1411111e11e Smgnport Pit Ltd v
l£cmg Chee I c11g (1993)).
Inn simihtr vein as lht• decision in l/edley Byrne, the court In Ct1p11rtJ outlined
(01 p
some important requirements tor estnblbhlng .1 du!)' of Cllre:
o
rhc purpose (general or sptcific) w:1s made k11own to 1he adviser al thr
lime of rhe advice:
139
lhe ad,iser knows or oughl 10 know tha1 his or her ad,ice will btcommunicat<d to 1he pla1nhfT (spccificall)' or as a member o( an
ascermnable cla») for the abo,·e purpose;
o
the adviser knows or ought to know that his or her advice will be acted
upon by rhe plai11utT without indepcnden1 inquiry; and
o
lhe advice was acted upon by the plaintiff lo his or her detrinwnt.
6.33
in Sprt11g 11 G11nrdia11 Aswrn11cc pie (t994)
'rhe House or l.ords
provides an interesting foclual cwhl. It concerned a written reference
given by the defendants (Guardian Assurance) 10 Mr Spring's pro>pcc11\·e
emplorer. Mr Spring failed 10 ger rhe job "ilh the prospective employer
:ind sued Guardian Assuuncc for negligenl misstalemenl in respect of
the reference. The House held lhat a dul)' of care was owed by Guardian
Assurance 10 Mr Sprmg, 1ts e.-cmploycc. lord Goff in that case appeared
lo have applied Ht1llty. t lowcvrr, ii is noted that Hedlry concerned a claim
in negligencc by the recipient of lhe bank'> ad,ice. Jn Spr111g, 11 "3> not
the recipienr of 1he reference (prospoct1ve employer) bur the sub1ec1 of 1ht
ceference (the pl•inriff employee) who hod sued for damages. Thu>. 11 iJ
s uggested 1hat the decision in Spri1111 might i>e construed as an cxten>ion of
the Hedley. principle.
6.34
In the Singapore cn>c of R11111cs/1 s/o Krls/111n11 v AXA Life lm11rn11cr
S111gnpore Pll' Ltd (20 t5), rhe High Court held tliat the crnploye1 (nn
insurance company) owed Q duly of core io ihe cx· emplO)'Ce (former
finance director) in providing reference checks on the latter's •mploymenl
lmlory to prospeciive emplo)'Cr• This duty of care was based on cau,al and
circumstantial prnxtmit)• betwtrn 1he cmplorer and ex-emploree (which
analysis was endorsed by the Court of Appeal: src Rame<h slo Kns/11rn11 v
AXIi Lift Tm11r1111u S111g.1port Pit Ltd (20t6)). Similar to Spring, the employer
possessed special knowledge o( thr employee. provided the reference wnh
the tacit consent of tht ex-employee •nd the ex-employee relied on the
employer 10 exercise due care and skill In pr<paring the reference.
6.35
'l hc 1ort or negligence ma)' be compared with the aclion ba,ed 0 11 ncl!ligcnt
1nisrepresen1a1ion under the Mlsrcprcoe111atio11 Act (Ca1> 390, 1994 Rev Ed)
("MA") (see Ch:tprer t3). 't he MA typically applies to a scenario where a
rcprrscnlce relics on a negligent rcprcl!cntation 111adt by the
and
enters inlo a con1rne1 wilh the rcprescn1or (as opposed 10 Q thitd parly a;
[empha>1> addedl
6.3t
o
140
Principlts of S1ngaport BusintSS Law
Chapltr 6: Ntgllgtnc:t
in Htdlty). AceoFding
lo
s 2(1) MA, the Fepresentee would only need
10
that the representation was false and the burden of proof would shift
10 the representor to show 1hn1 he had reasonable ground 10 believe and
did believe, up to the time the contract was made, that the facts represented
were true. llcnce, the burden of proof on a plaintiff in an action based
on s 2(1) MA is considerubly lighter than the plaintiff >Uing for negligent
misstatement in tort.
(3)
6.36
6.37
(4) Negligent acts or omissions causing economic loss
6.38
0
Negligent misstatemenu causing physical damage
Clahns for physical damage ari>ing from negligent misstatements arc. as one
cnn unagine, relatively uncommon. In Marc Ric/J 6' Co AG v Bishop Rock
M111·i11e Co I.Id (1996}. the issue was whether a clas;iikat ion sociel.)' (a nonprofit organisation) owed a duty of care 10 the ownc1· of cargo on a vessel
in respect of the society'> negligent certification of a vessel's SCJWOrthiness.
It transpired that the ship sank and the cargo wos physteally damaged as a
mult. lhc House of Lords (Lord Lloyd dissenting) held that there was no
du!)' of care. In d1sa.Uowmg rcco•'Cf)'• the House appeared to have
the policy requirements at the txpcnse of the proximity requirement. Their
Lord;hips outlined 1hc followi ng public policy reasons against recovery: the
higher costs o( insurance to the clnssification society which nught be passed
on to the ship owners: the foci that cargo owners already have con1ract11al
cl;1ims against the sh-ip owners pu rsuant to the Hague· Visby Rules. which
provide for the lim itation of the ship owners' liability to the cargo owners;
the onerous duty of the cla>Sific.iion society 10 promote the "collective
namely to ensure the safety of ships and h\'cS; 1( the clusification
society \\'Cre to be held habit. 1t might, as a result. adopt a defensive position
and useful resources may be dl\'CMcd elsewhere; and the fac1 that the
cla»1fica1ion society h ad no protection al all via hmilalion provisions, unlike
the >hip owners.
In another case involving negligcnl certification resulting In physical harm,
Perrett v Collins (1998). however, the English court held that an association
that wa< approved by a civil aviation authority 10 issue the ccrufication owed
a duty of care to a passenger on an aircroft in respect of the personal injuries
he sulTrred. The cou rt noted that the defendant had voluntu1ly a.sumed
rcspon<ib1lity for issumg the cenifica11on and the e<nifica11on \\".JS for 1he
protccllon of member. of the public.
141
There arc two notable Singapore cases relating 10 claims for pure ccononiic
arising fron'I negligent construct ion. Jn RSI' Arcl1itects J>lnnners
& E"gi11c, rs v Ocen11 Fro"t Ptc ltd ("Oc.,a11 Front"), the tnlmngcment
corporation sued the developers for the cos1s of repair incurred due to
defects m 1hc common area> within a condominium project. '! he court held
that a duty of care existed based on the proximity between the management
corporahon (the plaintiffs) and the developers (1hc defendants). Funhcr,
there were no public policy reasons to negate a duty of care. In lhal case. it
was found that there was a determinate amount of recovery. a detcnnmate
class of persons and no transmissible warranty gh•en to other parties.
Siniilnrly. in RSP Architects Planners 6' Eugint!trs v 1\1nnngc111c11t Corporntion
Stmt11 '/'itlc Pinn No 1075 ("Easlcm Lagoo11"), u duty of care existed bnsed on
the proximity be1ween the m:magernent corporation (the plaint iffs) and the
nrchilcCIS (the dcfendanls). It was found that there was sufficient reliance
and a>Sumptton of responsibility to c>tablbh a duty of care. In add111on.
there were public policy reasons for supporhng such a duty. These cases
concern real property. ,..1hich troin.slatts into greater financial in,•tstment
and pO>ScSS<> permanence of structure a> opposed to chancls. especially in
t he context of land·scarce Smgnporc. In foct, it should be noted that these
factors were also applied in 1hc Australian case of Brynn v Mnfoncy ( 1995),
a case involving a subsequent purchaser of ll house (ie, not the fir.I owner)
clnim ing against the builder, though Bryan discussed the nbovc policy
fJctors in the context of the proximity clement.
6.39
In A111111a/ Concerns RtStnrcl1 & F.1l11catton SoCttl)' v Taro Boon K"''
(2011) (decided post-Spamluk). the criteria of voluntary assumption of
rcspons1b1ht)' and reliance were applied under the proxim11y requirement
of the Spandrck test. A non· profit society engaged a company •s contractor
to con;t ruct a shelter for oninrnls. 1hc contraelor appointed 'J'Jn, di rector of
the company, as clerk of works for the building project. Under the cont met,
the conirnc1or was obliged to level the site bi• using surplu; earth (a process
known as •backfilling") but instead 11<cd materials which rr>ultcd in the
pollution of the environment.
a rc.ult, the society had to excavate the
conum1na1ed ponions of the $11< and thereby mcurred economic loucs. In
the claim m
against Tan for 1hc economic losses, the coun held
that the clerk of works owed a legal duty to the society to supervise the
backfill Ing.
142
Chapter G: Negligence
6.40
6.41
Applying the Spandeck lest, the Court opined (at (351> that it was reasonably
foreseeable that the socitty would sulTer some loss or domagc if 1an did not
take care in supervising the backfilling. On the proximity requirement, there
wos clearly physical p roximity as tlie society was lessee of the site and the
clerk of work.< wos obliged 10 be physically present at the site to carry out
his duties. Tan, in procuri11g the contractor to appoint himself as clerk of
works, was adjudged (at (631} to have vc1/1111tnrily assumed the responsibilities
of a clerk of works a nd held himself out as having the qualifications and
skills necessary to fulfil the role of a clerk of works. In addition, Tan, in
declaring in a form submi1ted to the Building and Construction Authority
that he was not Jinked 10 the contracior, knew or ought to have known that
the society would rely on him to act in the
interests as tl\e clerk of
works (m (64J).
More recently, in NTUC Foodfnre Co-operative Ltd v SIA EngiJJccriJtg Co
Principles of Singapore Business law
ag3inst imposing a duty of eare exi5led given that (at 153]- (57]): (a) there
was a determinate
of claimants (operators of businesses in the lounge);
were insured would not negate
(b) the mere foct that the claimants'
a duty of care; and (c) the imposition of a torlious duty of care would not
undermine the parcies contr;ictual arrangemencs. As the airmg operator was
found liable in negligence, his employer was adjudged vicariously liable for
the loss of profits.
(S) Negligent acts or omissions causing nervous shock or psychiatric harm
6.43
This applies only 10 recognised psychiatric ilh>esses, not mere mental disiress,
nnidecy or disappoint ment not associated
any physical injury suffered
by 1he plaincitf arising from a negligent aci or omission of the defendant.
6.44
A duty of care would arise only if the plaintiff sat isfies the three proximity
requirements stated in Nginm Kong ScJJg 11 Lim Clticw Nock (2008) (al ( 101lwhich generally follows the test htid down in the English case of
Mclo11xhli11 v 0'1Jriw1 ( 1983). 1hc proximity ,·cquiremcnts are as follows:
Ud (2018), the Singapore Court of Appeal decided that the respondent
rL03])
(un operator of airtugs al the airport) who negligently damaged a pillar
of a building in the course of carq•ing out the openHions. owed a dul)' of
care to the appellant (the operator of a nearby food kiosk located within
the building) in respect of the appellant's loss of profits. 'l he pill"r was the
structure supporting the floor of the airport transit lounge. The appellant
had leased premises nt the transit lounge to run a food kiosk. The leased
premises including the kiosk were not damaged but the Building und
Construcliott Authority issued a closure order over a part of the lounge that
covered the leased pre mises. 111e appellant claimed for loss of profits arising
fro ln lheir inabiliLy t() use Lhe pre1nises during the period o i closure.
6.42
The court chan>cteriscd the loss as "relat ional economic loss" and analysed
it within 1he Spaudeck fran1ework. The tcrn1 "relat ional econo 1nic loss"
referred to pure eco11omie loss that arose from damage to property (pillar of
the building) which was not owned by the plaintiff (operncor of food kiosk)
6.45
o
the closeness of 1he relationship becween che plaintiff and che primary
victim, such as porenc- child and husband- wife relationsh ips. though
this does not necessarily exclude the ocher types of relationships
(circumstantial proximity);
o
proximity of the plaintiff to the nccirlent in time ond space (ie, through
sight and sound of Ilic event or its immediate aftermath) (physical
proximity); and
o
the memis /1y wltich tltc shock Is cn11scd (causal proximity).
With respect to the first proximity requlremenl, l..ord Wilberforce in
Mclo11glili11 v O'IJriaJJ (1983) had slated (nc [42 t] - (422)) th;1t "(l) he closer
the tic (not merely in any relationship, but lit cnre) the greater the claim for
was established based on (ac (47)-ISO]): (a) the physical proximil)' becwcen
the p>trties, (b) 1he causal proximity between the airtug operntor's iicgligence
and the kiosk operntor:< loss, and (c) lhe airlug operator's knowledge that
if the airtug collided into the structures supporting the floor of the lounge,
the occupiers on 1hnt Ooor would sufl'er economic losses Aowing (ro111 their
consideration·: \Vith respect to che second proximity. the parry who suffered
psychiatric harm need not have wicncssed the a"ident and the victim's
injury concemporancously. In Mcl-Ougltlin, tlte plaintiff did not atcend the
scene of the ear accident but saw her injured family members ac the hospital
soon after the accident. When the plaintiff met them 81 the hospital. the
fomily members were ;till in pnin. 11ms, the llouse allowed recovery based
in:\bility to
o n the "inunedinlc afte rmath" doctrine.
but nonetheless affected the plaintiff's econo1nic interes1s. 1be duty of care
the pre1nises. 111e court wa.o; satisfied that no poli-cy factors
14 3
144
Pnnc1plts ot S1n9;iport Business Law
Chapt•r 6: Nt9li9tn<•
6.46
Accordmg m the court in Nginm lumg Smg (at l951l, there mould not be any
dishnction in the trea tment of claims by a pnmary '1C1im and a secondary
VlClllll (eg, one who \vilncssed the car accodcnl caused by the defendant's
neghgene< and suffered psychiatric illness as a resuil). lnstud, there should
be • •inglc 1c>1 applying 10 both primary and •ccondaq• ''ICtims. I lowever.
h os no1 clear how the first proximity requirement "'ould nppl)• 10 a claim
by o primary vict i1n. In such a ca,;e) 1here docs no1 seem be nny relational
proximity to speak of, '"opposed 10 the case of a plaintiff who witnessed his
loved one colliding with the negUgent driver. I lowcver, the co11r1 (at I108])
emphn•lscd 1hn1 there was no one unique way 10 apply any particular factor,
and thM the applicalion of 1hc fac1ors depended very much on the prrcisc
fact> of the ca•e. It Is therefore suggested thnt 111 relalion10 a primary victim.
the fim proximity re<1uiren1ent should not be Jpplied literally.
the
rtlcV3nl conitdrration is \•t'hetht'r there is
proximity bet\\·ccn
the dcfcndont and 1hc primary victim thal would iusufy recognising the
prmrnry vicum's claim.
the standard of care ts the nbiecttve standml of a rm.wnnblt ptrsa11 usmg
ordinary care and •kill. lhis will normall)' "" the case t\'Cn if tlte defendont
is
in p<:rformong the actl\•I)' or task in qucshon (such u
driving a car) (see N<ttlesloip v ll'esto11 (197t): lmbru v MrNtrlly (2008)).
Factors to Determine the Standard of Care
6.49
6.50
6.47
The Singapore decision of Pa11g Koi Fa v L/111 D}o•· Plrmg { 1993) involved
medical negligence thal C\•en1ually culminated In the dcBth of 1he plaintiff's
dauijhtcr. Upon aprlymg MrL-Ouglrli11, the fir.I proximity rcquiremenl
wtis clcllrly satisfied on 1he basis of a mother-daughter rcla1ions11ip. Wit.h
respect 10 the second and 1hird proximity requirements. 1he court observed
lhot there was no accident or aftermnth whne»ed by the plaintiff in
P1111s Kc>i
unlike in McL011ghli11. Nevcrthele>s. the court held 1hn1 the
ploinHn In Pmog Koi Fa was proximlllc In bolh time and space to the
torliom event (ie, the death of her daughter) a; the plaintiff had witnessed
throughout the effects of the defendant doctor• negligent diagnosis.
ncghgenl op<:ratton and negligent posl ·operotive 1r.a1men1. In addition, the
learned iudge regarded her (al (621) as a "prrC1p1en1 wotncs. in terms of
the elements of immcdiat")'. closeness of time .md space, visual and aunl
Ho< Honour added (al (76)) 1ha1 the •lxwc legal analysis and
ou1come 111 the cose should be confined lo medical ncghgenrc coses.
6.48
ground that was surrounded by a high rencc. It wns found that the chance of
n cricket ball hitting .1 person such as the pluintitf outside the ground• ,._.
very low. In the ci rcums1a11ccs, ii was held 1ha1 the defendant (the cricket
club) did not breach its dul)' of care to the plaintiff to prevent the uccidenl
occurring. Convcr.cly, where the likely injury is scriou>. a higher •landard
of care would be required. In Pnris v Stcp11cy Borough Co1111crl ( 1951), the
!louse of Lords hdd th•I the defendant employer should hove rea>onably
taken into account the mk of great<r iniury to the plaintiff employee (who
was already miured m one eye) by providing goggles for hr< work as a garoge
hand. 'rhe di>obility of the ploinulf employee increased lhc nsk of the iniury
becoming more sertou' (ie. blondness) u compared to a normal per>On.
Thus, the defendain employer hod breached rt.< duiy in not
goggles
to the plaintiff.
6.51
In this >ecllon. we 'ore concerned with the "stnndllrd or care" expected
of the <lcfcndont In question. If the defcnd.1111's conduci falls below 1hat
slandllrd of core. we sny that he has "breochcJ" 1hc duty of core. Ge11erally,
145
Whert the likdihood of oniury 10 1he plaintiff is extremely low or r<mote.
o high standard of care i; not required 10 prevem Ilic Injury. In 8olto11 ''
Stone (1951), the plaintiff wa< injured by a cricket ball hil from a crockcl
r,.,
BREACH OF DUTY OF (ARE.
"J he standard of care, based on the 1cs1 of the objective rca;onnble man,
is dependent 011 what wM rensonnbly foreseeable as measured by the
prevailing knowledge lll the mnlerial time of the event in question, and not
after (sec Roe v Mi11ut<r of l/efllt/o { 1954): PlrmA<sure PAC v Gaclir /11/IS Ptt
Ltd (2007): JS/ Sluppi11g (S) Pit Ltd v Ttofoongwonglcloo11g (2007)). Fnctors
such as the likelihood of 1hc injury. th• s•veriiy or the ln1ury as well a;
the costs of avoiding the IDJUr) are rdevant in det<rmining the standard
of care.
'fhe costs or avoiding injury Oil lhc parl o( the defendont is also n rclevunl
faclo r, and this is 10 be bnlnnccd •galnst the risk of harm occurring. In
Latimer v AEC /,t,f (1953). the plaintilT tripped tmd foll on the lloor of
n factory owned by 1hc dcfcndn111 and sued fo r negligence. 1 he llou<c
determined thal the JclendJnl did not breoch its duty of care. Ba>ed on
Principles of Singapore Business law
Chapter G: Negligence
6.52
the faets, the risk of i nju1•y lo the plaintiff resulting fro m the slipper)• Ooor
d ue JO Oooding did n OI justify the closure of the facto ry. 'lhc defendant
in this case had already taken reaso1iable steps to remove the effects of
the llood and it was unreasonable lo expect them to close the factory. The
Wttgo11 Mo11111f (No 2) ( 1967) case furt her illustrates this balancing exercise
to determine the standard of care issue. It was stated that a i·easonable
man wo uld o nly neglect a small risk provided he had some valid reason
for do ing so, ror cxan1µlc, because it would involve considerable expense
to eliminate the risk. He would weigh the risk against the difficulty of
e1in1inating it.
6.54
Other factors determining the standal'd of care include the following: the
6.5S
Ill Fo11g
M111111
Yee. the plaintiffs wished 10 pu rchase a piece of property and
presence of potential hazards or dangers posed to the plai ntiff (eg, the
had paid monies in reliance on the defendant's negligent misreprese111a1 ion
contan1inated nitric acid in 'lire Sunrise Crane); the presence of industrial
standards and regulm ions (cg, in the comext of employer's duties to
employees: see Cliandrmi a// Subbiah v Dockers Marine Ptc Ltd (2010)): 1he
level of the plaintiff cmplo)'cc's experience, training and skills (eg, Zlirng
Yu Shnri v Lian Beng Constr11c1io11 (J 988) Ptc Ltd (2009)): and the level
of knowledge and com mercial sophistication of !he plaint iff clien ts (i n 1he
conlexl of investment advice given by banks: .see Go Dante Ynp v Bank
that the latter had authority LO act fo r the purported vendo r. 'Jhc defendant
lawyer had obtained from a property agent an optio n to purchase and a
resolutio n purportedly passed by the vendor';; directors authorising the sale
o r !he properly. ' lhe clefendanl did not know the purported vendor o r its
directors personally. Yet. the defendant did not verify his instructions 10
act for the purported vendor. though the defendant carried out o compan)'
.carch and confirmed to the plaintiffs that the persons who had signed the
resolution and o ption were directors al the material time. As it turned out,
the signatures on the resolulion and op1ion \l\1cre forgeries and 1he property
agent absconded with !he plaintiff's monies.
Austria Crcditmmnlt AG (201 1)).
Standard of Care Relating to Professionals
and Professional Standards and Practice
6.53
What if the professional had aeted eonsistenl with the professional standards
o r practice of the professional body to which he or she belo nged' It appears
that the professional may still be fo<md liable under the ton of negligence.
The professional standards sf'rve. at the 1nost) as a guideline of what is
expected of a reasonably competent professional. In the context of lawyer's
negligence, the courts have opined that the real issue is not the professional
p ractice but the extent of the legal d uty in a given situation which is a
question of lnw (sec l'.dwttrd Wong Fi11t111ce Co. Lid v /ol111sm1, S1okes nnd
MMter ( 1984 ): Fo11g Maw• Yee 11 Yoon Weng Ho Robert (1997}; Yeo Yoke Mui
"' Ng Linng Poli ( 1999)}.
With regard to
1he standard of care is that which is reasonably
expected of a reasonably competent professional with respect to a pa.rticular
field. 11>al is, a speci .ilis1 must exercise the ordinary skills of
speciahy
(sec Maynard v Wes/ Midlands Regional llM ll/r A11tlwrit)' (1984); sec also l'<:o
Prng Hock Neur)' v Pal Lily (200 1) discussed below at paras 6.65-6.66). In
!he English case of Bolt1111 v Friern Hospital Management Committ.ec ( 195?),
the cour t stated that the test is based on the sl:mdard of the ordinary skilled
man exercising and professing to have that special skill. 1\ man need not
possess 1he highest C'X pert skill M the risk of being fo und negligent. It is
sufficient if he exercises the o rdinary skill of an <>rdinary competent man
exercising th<lt particlllar art. 111e level of experience of the professional is
no1 relevant in determining !he standard of care (see Wils/1er v
Arcn
I/c:n/tli Auclwrity ( 198 8)).
14 7
6.56
Al the lrlal or the action in negligence, evidence W>\S adduced from •
conveyancing lawyer that it was not the pract ice in Singapore for la\.\ryers to
verify their instructio ns. Nonetheless. the Si ngapore Cour t of Appeal held
th;1t the defendant lawyer had breached his d uty of care and skill to the
plaintiffs. Applying the test in Edward Wo11g Fi11micc Co Ltd, the Court of
A ppeal held that. in foiling to verify his instructions. there was clearly a
fo reseeable risk thllt the defendant wo uld be acting without authority. 1l>e
court o bserved thal the defendant could have avoided the risks by taking
s teps to confirm his authority to act or if he could not do so. to at least warn
the plaintiffs <>f the r isk 1ha1 he could be acting without aut hority.
Use of Expert Evidence in Determining the Standard of Care
6.5?
'.I he cour l would generally determine the standard of care expected of
p rofessio mtls based on the evidence of cxperb with in the samt o r similar
148
Principles of Singapore Business law
Chapter G: Negligence
prllfessio n. With 1•espeet to tJw standard of eare
of medical doetors,
fo r instance, ii was held that a doctor is not guilty or negligence if he
has "acted in accord anee with a prnctia ncceptcd ns proper by n respousiblc
body of 111cdicnl men skilled i11 tlrat partiwlnr nrt ... Putting it the other
way around, a n1an is: not negligent, if he is acting in accordance with such
a practice. merely because there is a body or opinion that cakes a contrary
view" (sec 80111111 11 Fricrrt Hospital Mm1agcmc11t Committee ( 1957) (at 1587)).)
Iemphasis added I
6.58
The Bo/am test was confirmed in the decision of Bolitho v City a11d Hoc/wey
l/enltl1 A111lwrity (1998) with some refinements. l he judge hearing the
medical negligence case had to be satisfied that the medical opinioll had
a logic,1! basis which would involve weighing the risks against the benefits
to reach a "defensible conclusion". u ird Browne· Wilkinson in Boli tlto stated
thus (al f2431):
Cu1111p11tlty o n the appropriate standard of >eare based on the Bo/11111 and
80/it/10 tests continued 10 apply (at I 100)-11021). With respect to the giving
o f i1tformation and advice, the new <1pproach required a consideration of
e ither o ne of the following: (a) whether, from the patient's perspective. the
inforn1ation in que-stion would be relcvanl and 1nntcrial lO a rtasonablr
patient in his particuhu posilion; o r (b) whether it was informa1ion that the
doctor knew was important to the particular patient in question (at I 132]).
'rlu: personal cirtun1Slanccs or the patie nt we re to be taken into consideration
whe1l ev;tluating what a reasonable person Ln the potient's position would
consider material. The Singapore approach i$ generally consistent with the
current English position in M1111tgo111ery 11 Lmwrkslrir" Hc11/th Bo11rd (2015).
Res Ipso Loquitur
6.61
6.59
The nbove Bolitho test was endorsed in the Singapore case of Dr Khoo
James v G111wpatl1y r!Jo M1111ia11dy (2002). With respect 10 the m eaning or
"defensible conclusion': the Singapore courl took the view (at f65 f) that the
medical o pinion must be internally consistent on its face. At the same time,
it 1nust not ignore or controvert known Jnedical facts or advances in n'lccl icaJ
knowledge. Subsequently. the 811/11111 and 80/itlro tests have also been applied
to assess the standard of care of auditors (see Pln11Ass11re PAC v G11clic /1111s
Pie Ltd (2007); /SI Sit ippi11g (S) Pie Ltd v Tcofoo11gwo11glcloo11g (2007)).
6.60
In the subsequent case of Hii Cltii Kok v Ooi Pc11g fi11 Lo11do11 Lucien (2017).
the Singapore Court of Appeal made a
between diag nosis and
trc:ilmcnt Oil the o ne hand, and the giving of infor mution and advice
to patients on the other. For diagnosis and treatment, the position in
149
The legal burden of proor is generally on 1he plai111iff 10 show
011
a balallcc
of probabilities that the defendant had breached the d uty or care. In some
c ircunlstance.s, how('vcr, lhc plaintiff may C'Xp('ricncc difficulties in adducing
In the vast majority of cases the foct that dislinguished experts in the
field nre or a particular opinio n will demonst rate the reasonableness of
that opinio n. ln particular, where 1here are questions of as:scssnicnt of
1he relative r isks 1111d benefits of adopting a particular medic11I practice,
a reasonable view necessarily presupposes that the rclo.t ive risks and
bt"ncfits have been Wt"ighed by the
in fonning their opimions. Hut
if, in a rare case. it can be demonstrated that the professional opinion is
not capable of withstanding logical analysis. the judge is en tit led to hold
!hat the body of opinio n is not reasonable or responsible.
direcl evidence of the negligent act or omi$sion. In such an instance. !he
doctrine of rcs ip.<n lo11111t111' ("the thing speaks for itself' ) may be used in aid
o f the plaintiff. To establish the applicability of the doctrine, three criteria
m ust be satisfied. namely:
o
the defendant 111ust have been in control of the situation or thing which
rcsul1ed in the accident;
o the accident would not have happened, in the ordinary course of things,
if proper care had been taken; and
o
the cause of the accident mu>t be unknown to the plaintif!:
However. it should be noted that the defendant can displace the effect or the
doctrine by giving evidence to show dml he or .she wa.s not negligent.
6.62
A few illustr:1tions shall suffice here. In Scott v l.011do11 6' St Kntltcri11c
Dorks Co ( 1865), sacks of sugar under the control of the defendant fell
fro m a crane at the defendant's warehouse. It was held that the doctrine
of r.:.< ipsll loquiwr npplied as the accident could not. in the ordinary
cour.se of events, have occurred without th(' nesligcnce of the defendant.
The Singapore case or Teng Ah Kow v Ho Sek C/1i11 (1993) held 1ha1
res ipsn /oq11ililr is a rule of evidence. 'llms. upon the fulfilment of the
three crilcria
above. the effect of res ipsa foquitur rcsu.lt:i in the shifl
150
Chapter G: Negligence
Principles of Singapore Business law
of the evidential burden of proof 10 lhe defendan1 to show thu1 he or she
con eet medical tfeatment had been given by the doctor at the relevant time,
was not negligcnl (sec Ooi Nan Sim v Bee Nim Meng (1991) and Awn11g
biil Doi/ah v Shun S/1 ing Co11stmctio11 & fa1gi11ccri11g Co Ltd appeals (l 997)
in the context
occupier's liability). The defendant may then rebul the
the patient would have perished from poisoning anyway. -111us, the cour t
r uled that the doctor's negligenl omission i·n thal case did not cause 1hc
death. since the "but for" test was nol satisfied.
or
prcsu1nptio n of negl ig(·ncc via an ahrrnalive rxplnnation that indicates
non-negligence by the defendants (see Grace Electrical E11gi11ccri11g Pte Ltd
v Tc De11111 E"gi11eerir1g Pte Ud (20 18)). However, lhe doctrine of res ipsn
1-0qnitur does not apply to a case where the accident could have happened
6.65
via a number of pennutations, some consistent with the plaintiff's negligence.
the defendant's negligence or a combination of !he negligence of both parties
(sec Clteong Chim Pnf1 v M1m1J1inn s/o Rtmgnsnmy (2004)).
for negligence o n the g rounds that the defe ndant's failure to so advise her
CAUSATION OF D AMAGE
6.63
At limes, the "but for" test of causation may not be fulfilled for other
reasons. In l'eo Peng Hock Henry v Pni Lily (200 1). the plaintiff (patient)
consulted the defendant (general medical practitioner) and complained of
fever, cough, cold a> "'d i as blurred vision :and spots o n her left cy<. 1lw
defendant doctor suspected the plaintiff of having a drtached retina and
urinary lract infection but did not advise c.hc plaintiff l-0 consult an ere
s pecialist o r go lo a hospi1al im mediate!)'. 11w plaintiff claimed damages
'Ote third legal requirement to establish an action in negligence is that the
damage suffered by the plai111ilf must have been caused by 1he defendant:1
breach. Causation is analysed by considering bolh factual and legal causalion.
!'actual causation foC<Lscs o n the causal link between the defrndan1's negligent
conduct and damage according 10 the laws of physics and natural science.
The re are hvo pri1nary tests to detern1ine lhe issue of factual causation of
damage subject lo c.crtain cxceplions (sec paras 6.64-6.70). In addition
to fac rnal causation. 1he com'ls would have 10 consider the issue of legal
causotion (namely, 10 which cause should we ascribe legal responsibili1y). In
this regard, the i1npact of n 11ovus trctus hrtervenicns (or n .. new intervening
ac1") of the plainrilf o r a l"hird par ty or even a namral evcni on 1he issue of
causotion will have 10 be assessed (sec paras 6.7 1- 6.72).
led 10 her losing !he chance of an earlier diagnosis by a specialist which
would have prevented her from losing her srght. In this regard, the cour t
held !hat the defendant had fallen short of the slandard of care required
o f a competent general prae1irioner.
6.66
The more controversial issue in the case relates to c1111sntion. lhat is.
whether. if the plaintiff had been properly advised by the defendar\l, the
plai ntiff would have itnmcdialcly gone to the hospital and saved her sight.
In this case, the plaintiff did nol in foct >utfor from a detached retina but
a rare infeclion known as endogenous klebsicl1" cndophthalm itis ("BKE")
which resulted in her loss of vision_ 1he klebsiella bacleria grows al an
exponc ntiu1 rate within 24 hours. It wa.s de:.ir that such a rare disease could
not have been detec1ed by a reasonably con1pctent general practilioner.
Based o n the evidence of expe n witnesses, the court observed that whether
t he pl:iintilf's eye could be s:wed was subject lo 1hree q ualifica1ions, namely
(l) the correct diagnosis by 1he doctor al lh<' hospital at the malerial lime:
(2) the appropriate treatment administered: a nd (3) the
of 1he eye
to the treatment. Titc court concluded that the plaintiff had not proven.
011 11 l>nlmrce of pr<>/Jabilities. that had the d efendant advised her to go to
the hospirnl im mediately and had she done so as advised. 1he plain1ilf's eye
would have been saved.
Factual Causation
(1) " But for" test
6.M
This test involves asking the questioo whether the plaintiJT would have
suffered harm if lhe defendant had 1101 been negligenl. If 1he question is
answered in the affirmative, lhen
wt
can
based on the .. buc for"'
test, thtll the defendant's alleged negligence did not cause the harm suffered
by the plaintiff. In Bnrrrctt v Clrdsen & Ke11si11gto11 Hospillll (1969), a pal ienl
who hnd sulfrrcd from persistent vomiting was taken lo ho;.pitnl. The doctor
negligenlly refused 10 examine the patient and the latter died of arsenic
poisoning. It was fou nd, based on the evidence adduced, 1hal even if 1he
151
6.67
l he
of 1he "but for" lcsl may lead to incongruous results in
ccrta.in lnultiplc causalion cases. For instance. assurnc thal there a.re rwo fires
152
Chapter G: Negligence
which resulted in the daimge to the plaintiff's property. Let us
Principles of Singapore Business law
the plaintiff's damage (see Fnirc/1i/1! v Clm/1m1e11 Fu11eral Services J,td (2003)
assume
a nd !larker v Corns (UK) pie (2006)).
that each fire. on its own, would have been sufficienl to caust th(· property
damage. What is the cause of the property damage here! [f one applies the
"but for" test, strictly .speaking. fire #I would nol be regarded as the cause of
the damage on tl1e ba.sis lhat bul for lire #l, tl1e property damage would Slill
have occurred (ie, due to fire #2). Based on similar reasoning, fire #2 would
not be regarded as the cause of the property damage. Such an outcome, that
neither tire is the cause of the property damage, would dearly be absurd. In
such a situation, it is submitted that the second lest below, namely whether
each of the fires # I or #2 had nwerially contribuced to the property damage,
is the preferred approach.
Legal Causation
6.7t
potential eJfect o( a novus actus interveuiens ("new intervening act").
novus aclus iuterve11icns rnighl be an act of the plaintiff, a third
parly or even a natural event that t:ikcs pl<'ce between the defendant's
a lleged negligence and the damage 1ha1 ensued. Where an acl or
o mission is of such a nature as to constitute a wholly independent cause
of the damage, the intervening conduct may be regarded as a 11ov11.<
uc111s intcrvcnieni (see Muirltcad v /11d11.1trial Tn11k Specinlitics /,td (1986);
TV Media Ptc Lui v De Cmz Andren Heidi n11d nnotltcr tlppcal (2004)).
If there is a uovus tlctus intervenitns
is sufficien1 on the focts
to break the chain of fac1ual causation, the defcndam's breach would
r.10t be regarded as chc cause of che plain1itT's damage. Cases in which
the n1kged 11ovus ac•tus iulerveniens was suffidenl lo break the chain
(2) Material contribution to damage
6.68
This test considers the question as to whether che breach macerially
contributed 10 the
The word "material" indkalM a non-negligible
contribution to the damage. To satisfy this test, it is 1101 necessary for the
breach to be the sole or dominant cause of the plaintiff'• loss or dnmage.
6.69
In Bo1111i11gto11 Cnstillgs Ltd v Wnrdlmv ( 1956). the plaintiff suffered
pneumoconio<is, alleging that the defendant employer failed 10 install
safety equipment to p revent exposure to silicone dust. He was expo.<ed to
silicone dust at the
prcn1ises. Science could not dcnlon s1rate the
precise proportions of the source of dust due to the employer's negligence
and llllOthcr non·tortious source. But there is scientific evidence that the
severity of the illness was proportionace to !he level of exposure to che dusl.
The coun chus concluded that the defendant's negligence had materially
concributed to the plaintiff's pncumoconiosis. In a similar case, Holtby
v JJriglrnm & Corvm• (/-lull) Ltd (2000), where there were cwo or more
employers. each employer was liable to the plaintiff employee for a porcion
of the damage proportional<' to the relative lime of exposure to the ag<•nl of
hmn (in thoc case, asbeslos).
6.70
(n addi1ion, courts have used an alte rnative tesl of 1na1eriaJ contribution
to the risks of damage: that where the plaintiff was exposed to the same
risk involving the same agent
harm {eg. asbestos dust) by lwn 0 1' more
ddcndnnts. the defendnnts may be jointly and
liabic. even when ii
is impossible to de1er111ine scientifically which of the sources actually caused
or
153
In determining the issue or causation, one should also take note of chc
o f causatio n norn1a1ly invo lve intervening. acts that are unreasonable,
d eliberate, reckless or unforeseeable (see McK<·w v /lo/land & lln1111c11
C11bill5 (Scot/nm/) Ltd (1969); Wrigltt '' Lodge (1993): Pait Kim Ngolt v
Yap Cir wee Hoe ( 1968- 1970)).
6.72
whm OM 1ort is followed
kgg!
by another lort or a natural event. ln Baker v Wil/011gltby {1970), the plaintiff
inj ured his left leg in n road '"cidenl. He was later shot in the same leg by
a n armed robber. It was held lhat the defendam remained liable for the
lnjllr)'. even though the etfects of his negligence had been wiped ouc by the
second tort. However. where the second event Is" natural cause which wi1>es
out the physical ctfects of chc first tort, che tortfeasor's liability ceases at che
point when chc nacural supervening condition manifests itself (see Jobling
"' Associ111cd Dairies { t 982)). Othcn•isc, chc Jcfcndant would be liable for
damage which would have occurred natur"ll)' as pan of the "vicissitudes of
life". ' l11c Singapore Court of Appeal is more inclined towards chc ]obli11g
approach in tnking into account, when assessing da1n1.1ges. randorn evenb
whether 1iatu ral events or subsequent torts committed by a third party {see
S"lcrm Ltd 11 Uuited Cement Pte Ltd (2004)).
154
Principles of Singapore Business law
Chapter G: Negligence
REMOTENESS
as the cause of the aeeident was a "known sou1•ee of danger". the defendant
would be liable even if the accident was caused in a way which could not
have been foresee n. Lord J-ioffman in Jolley added that the actual injury was
within the trial judge's broad description of the risk 1hat the children would
" medd le with the boat''. Hence, the defendants were liable.
DAMAGE
General Principles
6.73
The test fo r remoteness of damage is the .. reosonable foreseeability .. test laid
down in the case of Overseas Tnr1ks/1ip (UK) Ltd '' Morts Dock & E"gi11ecri11g
Co Ltd (or Wago11 Mound (No I)) (196 1). According lo Wagon Mound
(No I), the loss would not be too remote where the type of loss which
actually occu1·red was reasonably foreseeable, notwithstanding that the
precise extent o f the loss was not foreseeable. On t he facts of Wago11 Mound
(No I), the defendants (chorterers of ship) breached t heir duty in spilling
fuel oil which spread to the plaintiff's wharf, thereby causing damage to the
wharf. ·111e n1olten nl etal fron1 the plaintiff's welding works on the wharf
Special Circumstances of the Plaintiff
6.76
"cgligencc. As the plaintiff had a pre·cancerotLI condition, the lip became
cancerous due to the burn resulting in the p laintiff''.< death. 11ie defendant
was held to be liable for the entire damage, and not merely for the burnt lip.
had set Rre to couo01 waste
on the oil. 'Though the fire damage
was a direct consequence of the defendants' b reach, the plaintiff's claim in
negligence failed. This was becausc the Privy Council d etermined that it
was not fo reseeable that the fuel o il would burn in water.
6.74
6.77
In t he subsequent case of Wngo11 Mound (No 2) ( 1967), the facts were
largely similar except that the plaintiffs in this case were the shipowners. 1hc
defendants were found liable in Wagon Mo1111d (No 2) d ue primaril)' to the
evidence of the shjp's chief engineer chat there was a real risk that fire will
result. The court decided that the defendants could not neglect the risk if it
was easy in the circumstances to eliminate those risks.
6.75
To fu rther illustrate tbe concept of fore<ecability as lO t he type of d;image. let
us examine the Mouse of Lords decision in Jolley v S1111011 Lo11do11 Bor·ough
Cowrcil (2000). The p laintiff, a schoolboy, suffered spinal injuries when an
abandoned boat lcrt on t he grounds of t1 block of coundl nats owned by the
defendant fell on the plaintiff. On the fac ts, the plaintiff and his fr.iend were
attempting to repair 1he boal that was propped up with n car jack by the
boys. Unfor tunately, t he boat frll o n the plaint iff, causing severe inj uries. 1hc
Court of Appeal took the view that whilst it wo.s foreseeable fol' the boys to
be attracted to 1he abandoned boat and engage in .. normal ploy··: it was not
reasonably forCSl'eable that they would repair it und thereby sustain severe
injuries d ue to its collapse. 11ic l-fouse of Lords disag1·eed. Lord Steyn in
/CJlley stnted th;tt t he hoys' activities were no different from normal play and
ca11 take the for m o f "mimicking adult behaviour". His Lordship also cited
the case of llriglics v Lord Advocnte ( 1963) for the proposition that a.s long
155
The general rule Is that the defendant has to take the plaintiff as he or she is,
with existing p redispositions (known as the "eggshell skull rule"). In Smith v
Leec/1 Brain & C<> Ltd ( 1962), the plaintiff burnt his lip due to the defendant's
What if the plaintiff's existing predisposition related to his (tight) financial
condition? Assume that the defendant's negligence destroyed the plaintiff's
property (a ship). If the plaintiff had enough capital. he would have
purch;iscd another ship as replaccmenl and claimed damages from the
defendant in rcsp<cl of the total costs of the ship. I lowcver. as the plaintiff
did not have sufficient capilal to pay for the ship, he had to hire a ship
instend. As.su1ne that overnll. it would have been c.heaper to purchase
t he ship than to hire. Will the defendant be liable for the additional loss
(based on the higher rates of hire) which the plaintiff suffered due to
his impecuniosity? ·n1e Singapore Cou rt of Appe;1I has confirmed that
t he plnintiff can recover the additional damages from the defendan t (sec
flo Soo Fong "Stnmfnrd Chartered Bank (2007)). Similarly, in Alcon Mi11ern/J
of Jm11aica /11c v Broderick (2002) a claim for increased costs in repairing
the
roof
allowed even though the increased costs was due LO
t he plaintiff's delay in undertaking repair as he could not tlfford it al an
earlier point in 1in1e.
M ITIGATION O F DAMAGE
6.78
I I is the defendant's burden to show t hat the plaintiff o ught to have taken
reasonable steps to pn·vcnt or reduce the plaintilT'> own lo>s. If the defendant
is able to discharge its burden. t he loss claimable by the plaintiff would be
reduced accordingly.
156
Chapter G: Negligence
ASSESSMENT
Principles of Singapore Business law
the defonee in fairl)• exceptional eases sueh as As/11011v1im1er (1981) (where
DAMAGE
6.79
The main purpose of damages in the tort of negligence is to romp-ensal< for
losses suffered (ie, to restore the plaintiff as far as possible to the position he
or she would have been if not for the defendant's negligence).
6.80
In personal injury cases, the plaintiff call claim for geneml dnmnges such as
pain :rnd suffering, loss of amenities (eg, the lo:» of capacity due to the loss
of a limb) and future loss of earnings. In addition, special dnmnges such as
loss of earnings (pre-trial) and medical expenses thai have been reasonabl)'
incurred may, subject to proof, be recovered. In deat h cases, a claim for
bereaven1cnt expenses rnay be made fOr the benefil of certain specified
dcpendents (s 21 Ci1'il l..aw Act (Cap 13, 1999 Rev Ed)), 1lic quantwn of
damages for proper!)' damage is normally based on the costs of repair or
dilninulion in value of the property. Assess1nenl of dan1ages in econon-1ic
the plaintiff suffered the injury in the course of committing a crime together
with the defendanl) and Cl1mis v Cnmde11 <md 1.•liugton Health Afllhority
(1998) (in which the plaintiff claimed against the health care authority for
the latter's negligent omission to provide him with psychiatric care which.
it was alleged, resulted in the plaimiff killing a person). rn St011e & Rolls Ltd
"'Moore Step/tens (2009), the liquidator of the plaintiff company daimed that
the auditors were negligent in failing 10 detut the fraud commined by S, a
director and sharchold<'J' or the company against certain banks. s was the
sole directing mind and will of the company and thus the fraud was imputed
co the company. 1 he auditors were adjudged not liable due to the defence
of ex Jurpi cnusn.
6.83
loss cases is intimately connected to the ascertainment of the prcdse scope
of duty of care in n pari icular case (eg, whether the duty was 111erely to
suppl)' inforn1ation or Lo advise o n a purported transaction) which may
result in quite diffcrenLquantifications of damages.
DEFENCES
Ex Turpi Causa
6.8!
T!ie
ex turpi •a1mi 11011 oritur n(liq
no
<11Jght IQ
founded on a wicked acr. As a defence, ii has a limited application in the 1011
of negligence. lhe fact that the plaintiff is involved in some wrongdoing does
not of itself provide a good defence to Lhe defendant. For instance, a plaintiff
who docs not have t\ permit to work in Sh1gopore docs not prevent him
from claiming damages against Lhe defendanl who had negligent ly caused
the plaint iff's injuries (see Ooi Hnu Sun v Bee I-Jun Meug (1991)). However,
as staled by the cour1 ln Ooi Hnn $1111, public policy dictates that the plaintiff
in such a case cannot be con'lpens::ited on the
of '"hnt he rnight have
earned by working illegally in Singapore.
Valenti Non Fit lnjuria
6.84
6.82
For the defence of ex turpi arusn to arise, 1hc plaintiff's \ vrongdoing n1ust
1
be sufficiently serious and conntctcd 10 1hr damage he suffered. There
is also a principle tlltat the damage caused b)' the defendant should be
proportit>nate lo the plaintiff's \Vrongdoing. The English courts ha,,e allowed
157
In the Singapore decision of United Project Com11lta11ts Pte Ltd v Leong
Kwok 01111 (tradiug ns Leong Kwok 01m & Co) (2005). the court opined that
the defence of ex 1urpi causa could include.. apart fron1 crin1inal offences,
o ther forms of reprehensible or grossly iminoral conduct. On the facts of
the case, the defence of ex wrpi cn11sn did not apply to defeat the action in
negligence. 11ie court found that the plainlin- had not connived 10 cheat 1hc
IRAS and thus did not engage in an act so m lpable as to attract the defence.
The plaintiff had merely committed the stattttory offence under the rncomc
Tax Act (Cop 134, 2014 Rev Ed) of making incorrect lOJC returns which was
not crhninttl in nature, reprehensible or grossly in1moral. 'lhis was sufficient
CourLof Appeal went a step
LO deny the defence of ex turpi w11st1 but
[urlher. It observed that the defendant was engaged by Lhe plaintiffs precise!)'
to avoid the economic loss (namely, the penalty imposed by the IRAS)
suffered by the plaintiff.<. Thus, the defendant should not be allowed to reli•
o n a consequence (ie, the penah)' imposed by the IRAS) that was directly
caused by the defendant's own failure in the first place, in order to absolve
the defendant from liahility.
' rl1e issue is whether the plaintiff had acted !freely and voluntarily with full
k nowledge of the nature and extent of the l'isks of the defendant's negligence
and consented. whether expressly or im1>liedly, to those t•isks 1hM resulted in
Lhe tort. If this is the case, the defendant has a complete defence.
158
Chapter G: Negligence
6.85
Principlr:s of Singaport: Business law
The defence is generanl)• 3pplicable to absolve negligence liability for injuries
of personal injury or death (eg, property damage and finaneial losses), the
suffered in 1he context of participation in sporting act ivl1 ies involving
decisions and nctions that have 10 be taken swiftly in the "agony of the
moment'; though it is unlikely to cover intentional and reckless behaviour of
the defendant (see Wooldridge v Sumner (1963)). The defence appl.ied where
the plaintiff was aware of the n•rure and extent of the risks and .consented
to those risks in the participat ion of inherently dangerous ac1ivities in
deliberate breach of his ernplO)<cr's orders and statutory regulations (see /CJ
v S/111twell ( 1965)). '!he defence did not, however, appl)'
the plaintiff
took conscious risks to effect rescue in rntergrncy circu1nslances that had
arisen fro1n the
negligent conduct (sec Haynes v I larwootl
( 1935)). ll>e court may take into consideration the brave acts of tlte plaintiff
effectiveness of the exclusion or limitation clause is subject to satisfying the
requirements of reasonableness (s 2(2) UCTA) (sec also Smith v eric S /!"'"
(1990)).
Co nt ribu to ry Negligence
6.88
( I) Where any person suffers damage as the result partly of his own fault
and partly of the fault of any other persoll or persons. a claim in respect
of that damage shall not be defeated by reason of the fault of the person
suffering the dtlmage, but the damages recoveraillc in resput 1/1crcof slral/
in such re.scue cases.
6.86
Sec1ion 2(3) Unfair Contract Terms Act (Cap 396, 1994 Rev Ed) ("UCJ'A")
provides that n person's agree1ncnl to or awareness of a tern' 01· notice
purporting to exclude or restrict liability does not necessaril)' c<>nstitute a
voluntary acceptance of the risks. Full knowledge of the nature and extent of
the risks and consent would have to be shown b)' the defendant i11 order to
successfully raise the voleml defence.
be reduced to such extent ns tlic court tf.riuks just nnd equitable havirrg
regard to the claimant's sltare In tltc rtspowibiliry for the damage:
Provided that (a) this subsection shall not operate to defeat any defence arising under
o contrnc1;
(b) where any contract or wrinen law providing for 1he limitation of
liabilil)' is applicable to the clainl the :unount of d.in1ages recoverable
by the claimant by virtue of this subsection shall not exceed the
maximum li mit so applicable.
Exe mption of liability
6.87
rn this section, we .:xamine clauses or notices which seek
10
exempt the
defendant from negl igcncc lhibiliry. 111ese exemption clauses or notice.<
might either nncmpr to cxclutlc liability entire!)' or to merely limit the
liability of the defendant. For the defendant to rcl)' on exemption dauses
or notices lo excn1pt liability. he v.. oul<l first have to show that these
1
exen1ption clauses have been incorporated into the contract with the plaintiff
or in a notice Lhat t.lle defendant had taken rca.sonilble steps to bring to
1
the attention Qf the plaintiff. Secondly, the defendant wmtld have t<> show
that the language of the clause or no1ice covers the situation in question.
For instance. did the contract or not ice sufficient!)' exclude Jiobility for
damages arising from the defendant's negligence? Thirdly. the exempt ion
clause or notice must not be rendered unenforceable by the UCTA. A
defendant cunnol exclude or restrict its liability for negligence whfch results
in personal Injury or deat h (s 2(1) UCTA). In respect of damage outside
159
As indicated earlier> the doc trine of contributory negligence serves only a.s
a partit1l defence. In this regard, s 3 Contributor)' Negligence and Personal
Injuries Act (Cap 54, 2002 Rev Ed) rC<>ds:
!emphasis added !
6.89
A plaimitf's negligence will result in a red.iction of damages only where
lt is causally relevant to the damage which he or she has sustained. 111e
opportionment of liability as between lhe plaintiff and the defendant
depends on their respective cnustllive potency and blameworthiness.
Where the defendtmt's liability in contract is concurrent with nn identical
tortious duty, lhe dcfendm1t could avail himself or herself of the defence
o f contributor)' negligence (see Fong Maim l'e< v Yoong We11g Ho Robat
( 1997); Forsikri,,gsaktiesdskapct Vesta 11 Butcher (1989): Jet Holding Ltd 11
Cooper Cameron (Singnporr:) Pie Ltd (2006))_ To reduce damages based on
contributory negligence, there is no need for the dciendant to show that
the plaintiff had been in breoch o( a legal duty of cnrc (see Kltoo Bee Kco11g
"A11g C/11111 Hong (200S)).
160
Pnnc1plts ot S1n9;iport Business Law
Chapt•r 6: Nt9li9tnct
and henfe the tortious am or omi,..ions of the company cannol norm3Jly
bt imputed to the
I lowe•·er. where the director in question lS
clearly the ·controlling mmd and sprru· of the compan)'. the drrcctor ma)'
be personally liable for au1homing, directing or procuring the comp•n)•S
negligent act>. a> was Ilic case in '(If Mr1fia Pie Lrd v De Crut A11dr,•a lltid1
(2004). In that case. the director was also a principal shareholder of the
company. Based on the above, the corporate \'eil was lifted. Tiie Singapore
Court of Appeal in the 'f'V Media case also stressed that a director would
be found hable in negligence for the company's negligent acts only in
cxceptionnl circun1$tances Jnd, a< such, the decision would not open ehc
floodgates of litigation.
0 THU ISSUES
6.90
We
examine 1he following issues related to 1he tort of negligence:
••1ca11ou> llab1lily, directors liabihty for a company'< negligence, concurrcm
hability m torl and contract as well as the limttalton periods for bringing an
nction 1n negligence.
Vicarious Liability
6.91
6.92
6.93
Employc1·s ore vicario usly liable for the torts commincd by 1heir emplorees
in the course of their employment. lhis mun> thol on employer is legallr
liable to the third pany who suffers harm due lo the employee's ncg;ligencr in
1hc course of employment. Vicarious liability h biscd on various rationales;
th• tmployer has deeper pockets, exercises control O\.. r the cmpl<>ree and
benefit> from thr emplore<,"s work.
One crileri<>n of •ocanous liability is the cxutencc of an employcr- cmplorec
relalton;hip. Apart from any rcle•"JJ1t tcm1> of the contract bctwt<n the
partit,, the precise 1elationsh1p depends on 1he degree and tx1em of comrol
by the employer over the employee's method of work, whether the worker
h sufficiently integrated into the organisation of the cmplorcr an<.l whether
the employee is acting on behalf of the employer 01 on his own account,
The ttlhcr imporl:rnl criterion (ie, "in the course 1>f employment")• relies on
the test of "clO>e connection" betwccn the nature of the employment and the
tort committed
well ns several pohey consldcr:illons (eg. eompensntion
for vulnel'\1ble victiins of lh• tort and deterrence •garn<t emplorers)(see
SJ.111r1li111iv1sk11 1!11skil1fa 81111kt11 AB (Publ), Smgaport Brn11<11 v Asia P11rijir
Brtwcrits (Smgaport) Prt lrd (2011)).
If the worker who committed the tort 1> not an emplo)'Ce of the defendant
but merrly an independent contractor. the defendant it not v1eariousl1•
!table. h
nevertheless possible to claim •g•h1>t the defendant directly if
the Inner wa> negligent rn engaging tl1e independent contr.ictor and that the
negligence 1esulled in the plaintiif's Joss.
Director's Liobillty for Company's Negligence
6.94
The director of a company is not generally li:ible for the company's negligent
conduct. "lhe director is regarded in law as a scparJI< entity from the- company
161
6.95
Apart from the above CJ>c, J Jireclor may be personally liable in negligence
lf he is shown to have voluntJril) assumrd personal rcspons1b1hty to the
plaintiff, and the assumptton of respon.,bihty wa< reasonably relied upon by
the plaintiff. Whether such assumption arises in a particular case depends on
chc panics" conducl, words and the surroundrng orcumstances obiectt\'CI)'
construed (sec WrUi11111s v Narural I if' Hral1l1 Foods /,Id ( 1998)).
Concurrent Liability in the Tort of Negligencoe and in Contract
6.96
The oft-cited case on concurrent llabilily ls He11dcrso11 v Merrell ( 1995). h1
t hat case, shorn of the dctlliled facts, the i•sue was whether the pl•intilf.
who had " contr•ctual relationship with the defendants, could ncverthelc;s
sue the defendants in tort to avail himself of the more favourable hmilation
period for tort claim< (as compared to contractual claims). lhe House of
Lords gave an affirmaltve an>wer. ·1 he plamtilfs could select the tortious
n:medy which was more ad,-;intagcou> rn the circumstances. The tort remedy
would be applicoble unless 1t i> hmtted or excluded br the agr<emrnt of the
conctrnm
Limitation Periods
6.97
Acc.ording to s 6(•) Li1nitlllion Act (Cap 163, 1996 Rev Ed) ("LA'), an
action founded on a wrt >hall not be brought after 1he expirJtion of
s ix year.< from the dote nn which the cou<e of action occrued. In the
context of negligence, this d11tc refer> to the date that the dllmage occurred.
162
Chapter G: Negligence
This section is, however, subjeet to other provisions in the Aett, namely,
s 24A, which provides that, with respect to a negligence claim fo r
damages for personal injuries, the action shall not be brought after the
expiration of:
( l) three years from the date on which the cause of action accrued; o r
Principles of Singapote Business Law
CONCLUSION
6.100
The tort of negligence has grown from its hLJmble beginnings in Donoghue
" S1evc11son to be a very significant fa ult-based tort toda)'. It is clearly
i.nstrun1e ntal in regulating business and olher conduct and activities i n
Singapore. As we have seen, the courts have utilised legal mcchanis1ns such
(2) three years from the earliest date on which the plaintiff has 1/1e
as d uty, breach, damage and defences to shape the conto urs of this expanding
knowledge req11ired for />ringing ai1 action for damages in respect of tl1e
relevant injury, if that period expires later than the period mentioned in
area of the co1n rnon law whilst safeguarding the physictl, n1ental. proprietary
paragraph ( l ).
For other claims for damagos in negligence (eg, proper ty damage and
financial loss), lhe relevant Hrnilation periods are six years fron1 th e date of
the accrual of action and Lhree years from the date of acquisition of bolh
!he knowledge required for bringing an action in respecl o f the relevant
damage and knowledge of a r ight to bring such an action (s 24A(3) LA).
(Note that there is an overriding time period of 15 years from the "start
a nd economic interests of a person fro m the negligent conduct of another.
In doing so, the courts endeavour to strike :a suitable balance between the
application of concrete legal principles and the exercise of judicial discretion
a nd policy to depart from those principles, if and when such departure
facilitates the proper deYelopmem of 1ort law and where fairness and justice
require it.
date" fOr actions in dan1ages for negligence, nuisance and breach of duty: see
s 24B LA. 111is means that the aclio n cannot be brought after the expiry of
the overriding time period even if the cause of action had not yei accrued:
see s 248(3) LA).
6.98
Under s 24A, an action may not be time-barred if it can be sh own that
the action was institu ted within three years from the earliest date in which
the plaintiff had acquired knowledge of his rights to bring a claim for the
damage. In C/tiri Kok Leo11g v Prosperla11d (2005), as th<' action was instituted
in May 2002, the plaintiff has the burden to show that it had acquired the
relevant knowledge o n or afte r May 1999. '"Ille o nus on the
o n the other hand, is to show knowledge o n the part of the plaintiff at an
earlier date.
6.99
Knowledge of the foctual essence of the complaint (as opposed to the
details of the claim or whether the plaintiff had a legal claim in negl igence)
would suffice. It must be shown that the plaintiff possessed knowledge of
material focts about the damage thot would lead a re;isonoblc person to
consider it "sufficiently serious" to invoke legal proceedings (sec Lian Kok
/lottg v Ow Wnh Foorig (2008)).
163
164
This page inremio11a//y left bhmk
PART Ill
The Law of Contract
Principles of Singapore Business law
Chapter 7
Offer and Acceptance
7.1-7.2
lnlroduclion to tbe Law of Contract
7.3- 7.5
7.6-7.7
Offer nnd Acc:eptance
Some Issues Relating 10 Offer and Aeceplanee
7.77-7.83
7.84
Certainty and Completeness
Conclusion
Ba.sic Terminology
Offer
7.8-7.10
7.1 1- 7. 13
7. 14- 7. 16
7. 17-7.24
7.25- 7.29
7.30
7.3 1- 7.32
7.33
7.34- 7.40
7.4 1- 7.43
7.44- 7.45
7.46-7.18
?.49
7.50- 7.51
Dcfinilion and Nature of Offer
Offers to Public at Large
Offer Distingu ished fron1 Invitation to Treat
( 1) Advertisements
(2) Displays of goods for sale
(3) Auction sales
(4) Tenders
Termination of Offer
( l ) lntroduc• ion
(2) Revocalio n
(3)
and counter-offer
(4) Lapse of time
(5) Pnilurc of a condition
(6) Death
Acc:eptancc
Dcfinilion and Nature of Acceptance
General Principles
7.52- 7.54
7.55- 7.60
7.6 1-7.67
7.68- 7.70
7.71
7.72
7.73- 7.76
( 1) Ace<plancc must be fim1l and unqualified
(2) Acceptance must be commun icated to offeror
(a) General rule
(b) Exce ption: The postal acceptance rule
(c) Acceptance by silence?
(d) lgno-rnnce of offer
(e) Cross-o!Tcrs
({) Bailie oUorms
168
Pnnc1plts ot S1n9;iport Business Law
Chapttr 7; Offtr and Acctptanct
INTRODUCTION TO THE LAW
7. I
when made, but due to some re:uon one of the parties to the rontr.ict hu
the right not to go through with 11 (or to ":ivo1d" it), for uample, on the
ground of misrepre«ntation In such a case. onli• the pany who w:u mode
(or "induced") to enter into a contract through misrepresentation can avoid
it, but not the other party. The 1'3rl)' entitled 10 "''01d it can also choose
to continue with the contract. LD>lly, an 11nl'nforcct1blc contract 1s one that
is valid and legnll)' binding but which the coun will not enforce for >OmC
reason. for example. because of a legal provision. As an illustralion. under
the low of limitation, one cnnnol recover " debt more thon six ycnrs from
the ti1nc it was due.
( ONTAACT
In Part II we ltarnt about the two important branches of law - criminal
law and civil bw. In relation to criminal law, we learnt about business
crin1cs. and in relation 10 civil la\\f, '"'e learnt abc>ul iht law of 1or1.S. \Ve
now turn to another important branch of civil law - the law of contract.
In Part Ill we shnll c-onsider what a cont1·act is, how it is formed, what its
co111cn1s are, how it cnn be lerminated and what 1he remedies for breach of
COllt l';lCt tl r(".
7.2
Whal is a contract! A conlrael is a legally binding agreement, which
mean> lhal the law requires bolh parties 10 do whal they promised in the
ai;rccmcnl. llowcver. for an agrcrmcnt to be leg:tlly binding or ·valid", ii
mu.l satisfy certain requirements. These are as follows· (a) there must be
a mee11ng of the minds or common understanding between the partitts, as
maniftsted through otftr and acceptance (Chapttr 7); (b) there must be
consideration (ie, something given in exchange for the rcspcc1ive promises)
and the intention 10 create legal relation< (Chapter 8); (c) the panies must
have the capacity to contraC1 (Chapter 9); and (d) the parties must freely
con,c11t to the ngreeinent. 111c factors thnt mny demoy or "vitinte" the free
consent of thr pnnles are called "vitiMing foctors" and include mistake
(Chapter 12). n1isrcprcsc11ta1ion (Chapter 13). ond durc,s and undue
inllucncc (Chapt<·r 14). Further, a conlract mu>t 1101 suffer from illegality
(Chaplcr IS).
7.4
B ASIC T ERMINOLOGY
7.3
Before we procetd. i1 h ncc=ary lo unden.tand some or the commonly
used term; an the law of contract. In the par•graph obo\'e, we described a
leg•lly binding or '"lid con1racl as being an agreement that satisfic• oil the
legal requirements. How do we refer to a contract 1hat doc< not S'11isfy one
or more of 1hese requirements, or i< affected hy n vitiating factor! We do
so in three malll ways: (a) "void": (b) "•'Otdn/J/c"; and (c)
A co1111·ae1 is 1101d when lhe law trcots lhc co111ract "S null. as lhough 11
never exbtcd at nil. because of some serious flaw such a< fu ndamental
mistoke. A contrnct Ls voidable whe1e the l.1w treats the contract
valid
169
7.5
'£hen there are "bilntm1r and "wrilnttrnl'" contracts. AU controcts arc
bilatunl in the sense that there mu>t alwai•s be al least two partlts to a
contract. There mu5t be mutual promises between th< parties before there
can be an agreement betwc<n them. One par1)' cannot impose hu or her
proposal on the other party 1f the othrr pany is unwilling to enter into
an agreement. The mam feature of a b1/t1ttral conrract is that the proposer
of the agreement or the "otferor" makes a promise in return for a pro1111Jt
on the part of the offerec. On 1hr other hand, the term 11111/ntrtal means
one-sided. There Is no •uch thing as a one-sided contract because one
party cannot enter into t1 contract with himself or herself. Whal a 1111ilntm1/
contmct really means Is that one party t-o a prospective contraCI has
a lready done all that he or >he 1, required 10 do under the contract. leaving
o nly the other pany lO do his or her part. 111us, in a uni/11tera/ ruirtract,
the offeror makes a pru111ise an return for an nrl 10 be performed by the
offeree. Performone< of this oct by the offeree constitutes both the
acceptance of the offer a. well as considtration. As on illustration. where
:t person advtrllses a reward for finding a lost purse, this 15 • 11111/attral
co11tract bec•u« all that th< other party ha< to do is to find the purse, and
claim the reward.
Lastly. a word aboul the typN or contract<. There arc 1wo c•ttgorics of
contraels, s1111plc ro11trnrts nnd spccinl ro111rt1cts. Most cont1acts lh3l are
c111crcd into for bu>iness und in everyday lire are simple cont1nct>. A
(Cfercncc to contrnel in 1his book is a reference to a >imple contra<!. unless
Lhc context
otherwise. Simple contr:icts can be ornl (also known as
170
Cl>ap,.r 7: Offtr and Accrptantt
Princ1plts of Singapott Busintss law
"puol contr:tcts") or 111 writing. or partly oral anJ partly in writing. Sped:tl
contracu •re formal contracts by deed (• type of legal document that u
•igned and ddl\·ered) or contracts under •eal. Unlike •imple contr.icts, they
do not require consideration (see Chapter 8, p•r. 8.46). They are used in a
more form.ii setting s uch as a grant of a gift or purchase of land.
Intention to be
bound by proposal
Revocauon
Rejocbon
Counter-olfer
Failure of cond1t>on
Lopso or limo
Death
• Not a mere puff
Offer and Acceptance
• Not an Invitation
to treat
7.6
proposal
Communication or
We now turn lo offer and acceptance, which are irnportanl requiren1enls for
u contrnct . A contract is an agreement where the partic> strike a bargain for
themselves. It happens when one parry makes on offrr that the other pany
accepts. Thi> may look simple in everyday contracts hke buying a lo•f of
brc•d. but may be difficult to
m more >erious comracts i11\'0Mng
long-drawn negot1at1o ns. Yet for the contraCI to e•ht, n must be escabhshed
th•t there w.u • meeting of minds betwttn the putrts such th•t they have
• common understanding as to what they ha•e agreed co. La")'ers use the
phr»c <OllS(nsus 11d idem to describe thrs. Sonce ii 1s not possible co look
into t he minds of p•rties, how offer and occeptance is detnmmed depends
not on what the p•rtits >ubjectivdy in tended. but what can be ob1ee1ivcly
ascertained. This "objective" lest of ugreemenc exam ines t he external
1mnifc.tJtlo11 of the parties' intentions thro ugh their action> as they may
be rcosonobly u nderstood by the other party. 'lhc Singnpo1·e lligh Court in
No1wcsr Holtli11gs Ptl' l trl (i11 liq11idotio11) v Ncwplll't Mi11111g Ltd (20 10) stated
(at l34f) thnt the law is predominantly concerned wllh o biectove intentions
Figure 7.1 Overview ol concepu In offer and acceptance
OFFER
Definition and Nature of Offer
7.8
7.7
Coru<1u1u ml 1de111 1s established by applyrng the rules of otfer and
acceptance O nce 1he acceptance of a valid otrcr 1ako cffecl, • contract
comes into emtence provided other r«Juircmcncs a1c met. Roth 1he parties
will then be bou nd by their mulual promi>es. As co o ffer and •cceplance in
1he contc.i of electronic con1rae1s. these tire co1i.id ercd in Chapte r 24. The
framework In Figure 7. 1 can be applied co s11uly th i> topic:
171
In Gay Clroo11 /11g v l.0/1 S:c ·n 7rrerrce Peter (2009), the Singoporc Cou rt
o r Appeal st1id (at (481) chul an offer "mu;t consist of o definite promi>c lo
be bound, provided thot ccn oln >pcclfied terms are
An offer hns
o lso been defined tlS "an expre»l<>n of willingness to contract on specified
terms. made with the in tention lh•l it ls lo l>ccornc bindins as soon as it 1s
ncceplcd by ihe person to whom 11 1s addressed" (see
of a parly, and not his .ubjcctive or actual intentions. Specifically, the
objective approach detem1ines a party's intention> by looking al 1l1e way in
which all his words and condue1 would be understood by the reuonable
per;on m the position of the recipient. the party 10 whom the words and
conduce wue directed
Final and
unconditlonall
unqualified assent
• Not a counter-offer
Communication or
acceptance
• Receipt rule
• Postal acoepcanoe
rule
• Silence
• Batde of th9 forms
ll Ped. Tre1td: 1111• I nw
of Co11trnct ( 14th ed, 2015) at p 10).
7.9
Thus. an offer is a rroposal by one puty mdicaling his
10 be
bound by certain terms provided they are uncondition•ll)• accepted by the
oth<r. The party mak.ong the offer is the "offrror and thr party to whom
the offer is made rs the
'The offer thus contains (1) a proposal of
the terms of the exchange: •nd (2) ''" expreS<ion of willmgncss to bt bo1111d
as >OOn as lhe recipient of the propo>JI accept> the trnn>. An offer put>
the offeror at risk: it confers a power 0 11 the off'erec 10 bind the offeror • I
t he precise moment of nccepta11cc: thereafter t he offeror loses his abilit y co
withdraw from or fu rther ncgoclalc t he arrangement (sec M Chcn· Wishnrt,
Co111rnct
ww
(6th ed,
o r by conduct,
.11 p SS). An offer 1m1y be made orally. in wrhrng
172
Chapter 7: Offer and Acceptance
7.10
Principlr:s of Singaport: Business law
The critical issue in this context is whether there is an i11te11tio11 to be bound.
was indeed an offer sinee it was not made
As 111entioned. an object ive approach is used in nscerlaining whether there is
o f persons but to the world at large. The court held that nn offer could
i ndeed be made to the world at large. 1hird, whether the plaintiff should
nevertheless foil in her claim because of her failure lo notify her acceptance
to the defendants. 'I he court rejected this argument and Slated that no such
notification was requi red since this was a unilatcr11/ conrract. Lastly. the
contract was supported by consideration.
an intention to be bound. Accordingl)', ii is possible for a party, who had no
actual intention to n1:1ke an offer, to heconle bound by what was perceived
object ively as an offer. 'Ibis was recognised by the SingllpOre High Court in
Ho11gko11g & S/1a11gl1ai Ba11king Corp Ltd v !11ro"g Engi11eeri11g lid (2000).
The object ive approach embodies a principle of convenience because it is not
10
any specific peri:on or group
possible to read a person's 1nind to ascertain his subjective intf!nticns.
Offer Distinguished from Invitation to Treat
Offers to Public at Large
7. 11
In most cases an offer
be made lo a particular person and only that
person may accept t he off'er and no one else, £or example. an off'er 0£
c1nployn1cnt. Howcvc-r, an offer JTI3)' a)so be n1adc lO a group or to the
whole world. ln such a case any member of that group or any member of
the public, may accept the Qffer. An example of an otfer made lo the public
nt large is wh('rC the ownrr of 3 lost purse offers a reward to anyone who
finds and returns it.
7. 12
"l hc principk that nn offer can be made to the wholr world was laid down
by the English Court of 1\ppeal in tJ,e famo us decision of Ca.-lill v Car/10/ic
Smoke Ball Co111pa11y ( 1893), which has been followed in numerous Singapore
cases. 'lhe defendants were the manufnclur<•rs and vendors of the Carbolic
Smoke Ball. which they claimed could prevent influenzt1. They advenised in
the newspapers staling that if anyone used their smoke ball three limes daily
for two weeks and in accordance with the printed directions supplied with
each ball 11nd still C<rught influenza. they would pay 1ha1 person f.100. To
prove that they were serious about their claim, they said the)' had deposited
£ 1,000 with their bankers. Mrs Carlill bought the smoke ball and used it as
directed and yet caught influell7.a. She claimed the £100 but the defendants
refused to pay.
7. 13
The court had to settle several issues in coming to a decision. First was
1he
1hnt 1he ::a.dvcrt isernent was not ;,t serious contn:icl (a rnere
· puff") and that there wns no intention lO be bound. 'lhr court reject<d this
argument because the t1dver1 isement itself stated lhal the defend:111ts had
deposited £ 1,000 with. the bank, which showed that they were serious about
their promise. Second, whether the apparent promise by the d efendants
, 73
7. 14
Somcli111cs one parly, instead of n1aking o.in offer, 1na)' invite others lo
1·nakc an otter. This is known as an "inv;urrion to
which is si1nply an
expression of willingness to negotiate with the other party. At this stage there
is no intention to be bound. 1be distinction beh,rccn the two is in1portant in
that if the proposal is an offer, a binding contract will come into existence
without fu rther negotiation upon its accepta.nce. Therea11er ony attempt lo
escape from the contract would b« a breach of contract. O n the o ther hand,
i.f lhe proposal is an invitation 10 treat, and if the response of the otlier party
amounts to an offer. the person 1mking lhe pro posal may accept or reject
the offer.
7. 15
In detern1ining whether a staternenl is rin offer or invitation to treat, the
'A'Ords used in the .ittatc1ncnt are nol c.onclusive. In Soo11 Kok 1'inng v
DBS Bank Ltd (2012), a plaintiff itwestor made an application for a
declaratio n that the series of notes known as "'DBS High Notes 5" ("HNS")
was void a l the time of their issuance and asked the court to order the
defendant bank to repay each of the plaintiff.< the principal amounts they
had invested in HNS. To succeed in the cl.1im, the plaintiff investor had
to show thnl the launch of llNS was an offer that had bocn accepted. 11ie
Singapore High Court was not persuaded tbat the launch of HNS was an
offer (at (19)). Although the launch of HNS was termed an "offering" and
the period for application was called the "Offer Period': the dcfrndanl bank
retained the r ight 10 reject or accept nny application without the need lo
give reasons. The defendant bank thus had not indic;11ed any intention to
be bound, but was merdy invilins interest in I INS. 'lhe launch of I INS was,
acco1·dingly. an i11vitalio11 lo t real. It was the individual investor who. b)'
submiuing the application fo rm, made an offer 10 the defendant to buy into
I-INS. "ih« I INS contrnct cnmc into existence o nly when the defend:ml bank
accepted that offer.
, 74
Principles of Singapore Business law
Chapter 7: Offer and Acceptance
7.16
There are situations in everyday life when ll'hat appears lo be an offer
is held by law to be an invitation to treat. Jn many such est"blished
situatio1\s, the courts have already decided whether t here is an o:ffer or an
invitation to treat by treating certain sit uations as indicating the presence
o r absence of t he intention to be bound. Some of t hese
are dealt
with below.
7.21
(1) Advertisements
7. t7
It is now common fo1· businesses to advertise in the media induding
newsp•pers and magazines. TV, radio and the Internet; also in the
sam e category are catalogues, brochures and price lists. Generally, these
that the price was n
The case of Pnrtridgt v CrittemJe11 ( t968) is often cited for this principle.
Partr idge "dvcrtiscd in • magazine, " Bramblcfinch cocks and liens, 25s
each''. lie was charged with '"offering for sale" a wild bird contrary to the
7.22
provisions of the Protection of Birds Act 1954 and was convicted at the
Magistra1es' Court. However, his conviction was quashed on appeal because
the English High Court fou nd t hat his advert isement was not an offer but
an invitation to treat. According to Lord Parker. *'when one is deali ng '\Tith
advertisen1cnts and circulars, unless they con1e fron1 1nanufacturers. there
is busincs,'i sense in their being construed as invitations to trcal and not as
offers fo r sale''.
7. 19
Advertisements placed in newspapers and magazines are usually considered
invitations to treat on the basis that people who read the adve1·tisennents may
want lo negotillte furtl1cr. Further, t he unending selle1· may ha,•e a limited
Si111ilar
· 1he Singapore I ligh Court considered whether existing contract principles
applied to Internet contracts and said they could. However, the court
cautioned against applying them the same way as to traditio nal contracts. The
court furl her stated Ihat Internet n1crchants must be cautious as: lo how they
present an advertisement since this determi11es whether the advertisemont
v.rill be construed as an invitation to treat or a unil:iteraJ contract. toose
language may result in inadvertently estaMishing contractual liability to
a much wider aud ience (purchasers} tl1an r.:sources pennit. The case was
eventually decided in favour of the d efendant on appeal based on unilateral
rnistake. l-lowevcr, the High Court's views on Internet contracts mentioned
above were not disputed and remain pertinent.
7.23
1-lence, de.spite thr general rule, it i.s still possible for an advcrtise1nrnt on
the Internet to co1\stitllle an offer rather than an invitation to treat. 111is
is especially so where the buyer is guided on screen step-by-step by the
seller until he clicks " J accept" and pays the purchase price online. 'lhe key
clement in sucl1 cases is the i11te111io11 of tlte p11r·1ies to be gathered from the
circu1nstances of lhe case.
7.24
Apart from Internet contracts. there arc also o t her cases where advertisements
number o r items to sell, with the result that he may not be able to sell to all
who might respond to the advertisement.
7.20
and that it would therefOre have to dee.line
all orders. The plaintiff.I sued, insisting that the confirmed orders were
b inding o n the defendant.
advcr1iscrncnts arc considered invi1 ations 'o 1reat.
7. 18
This principle ll'as applied in t he Singapore ease of Cliwee Kin Keo11g v
Digiltmrlmall.com Pie Ltd (2004). 'lhe defendant advertised on its website
laser printers for sale. Because of an employee error, the price quoted was
$66 each, instead of t he correct price o r $3,854 each. The six plaintiffs
s potted t he blugain and quickly placed orders on Lhe website for 1,606
printers in total at S66 each. Upon receivin g t he orders, t he defendant's
auto mated response system sent emails to the plaintiffs confirming each
p urchase. W hen the defendant realised its error, it promptly removed the
3dvertisement from the website. It informed all who had placed orders
apply to electrunic trading on the Internet or e-c-01n1nercc.
Advertisen1ents posted o n a websile generally a111ount to invitat ions lo treat
(see s 14 Electronic Transactions Act (Cap 88, 201 t Rev Ed) di&cussed in
Chapter 24, paras 24.15 - 24. 16). Here the customer is said to be making the
offer which the seller may accept or reject. So if a seller makes a mistake by
quoting a ridlculo11sly low price for t he goods, he could refuse to sell the
goods ut Lhe advertise'({ price. It would be absurd if tl1c seller were lo honour
all such "col\trncts'".
, 75
111ay :unount to an offer rnthcr than tUl invita.tion to treat. 111is W'3.S the case
in Carl;// v Cnrbolic Smoke Brill Co (see para 7. 12}. In that case, t he cour t
round an intention to be bound. Similarly, in an A mcrican case. Lejkowilt 11
Gm1t Mi1111cnpoli.< S1Jrpl11s Store (1957). the advert isement stated: "Saturday.
CJ ain sharp; 3 brand new fur coats, worth SlOO, first co1ne first served,
, 76
Principles of Singapore Business law
Chapter 7: Offer and Acceptance
S I eaeh''. lhe plaintiff was the fii'Sl customer to present himself 31 the
appointed lime, but the defrndant refused 10 sell the coat 10 him. llc
successfull)' sued for breach of contract and the Supreme Court of Minnesota
held that the advert;semenl amounted to on offer. Thus. in relation to
advertiscn1ent.s, the question wheth('r thrre is an offer or n1ercly an invitation
to treat turns on whether there is an intention to be boUJ1d.
(2) Displays of goods for sale
7.25
7.26
Arc lh(• goods on disploy with price tickets on the suprnnarkct sheh•es or in
shop windows offers or iiwitalions lo treat? Holding it as the one or the other
will result in a different outcome. If the goods on display are offers. the mere
picking up of such goods misht amount 10 an acceptance and r<.·sult in a
binding contract. If the goods on display are invitat.ions to tretll, there would
be no contract until the ci1ston1er nlakes nn offer to purchase the itern.
The general principle is that all >\ICh displai•s are regarded as iiwitat ions
to treat rather than offers. The English case of F1sl1cr '' Bell {1960) is an
example where this principle was applied. 'lliere. the defendant had displayed
Oick knives in his shop window and was convicted of the criminal offrnce
of offering such knives for sale. However, his convict ion '"as quashed on
appeal. 1hc court held that the display of goods with a price ticke• attached
in a shop w'indO\\' is nn invito.Hon lo
ond not an offer to scl1.
a n in\'itation to trcal. The eustomer made the offer to bU)' at the eash
a nd the s:ile was completed when the cashie r accepted the offer. If it were
o therwise. then the customer concerned would be unfairly bound once the
article was placed in the basket and would not be able to change his mind
to substitute it with another. 'lhe shopkeeper also would be in deep trouble
if he ran out of stock.
7.28
Two practical consequences of this rnle arc that. firs t, the shop docs not have
to sell the goods at the marked price especially where it has mi.<quoted the
price, and second, the buyer cannot insist upon buying an item on display
even if the shop has run out of stock.
7.29
The court's reasoning, however.
some criticism. l.egal commentators
have argued that a n1odern store or a sup(•rmarkcl i.s not a place for bargaining.
There is also no reason to hold 1J1a1 the customer will be prejudiced by being
automatically bound if he were to pick up priced goods, as that act is too
cquivocnl to constitute an act of acceptanccM Lastly, the arguntcnt that lhe
shopkeeper woltld be unfairly bound if he were 10 run out of stock was not
tenable. He could overcome this difficulty by holding that his "otfer• was
open only "while stocks last".
(3) Auction sales
7.30
7.27
At an auction sale. the call for bids by the auctioneer is an im•itation to treat.
A.ii there is no Singapore decision on Lhi:-. principle1 let us consider the
..Jhe bids 1nade
leading English case h1 this regard, PJ111r111<1(C11tlcal Society of Grear Britnin v
Boots Casl1 Cltemists ( 1953). Tiie defendants were charged with the offence of
selling drugs, which could be sold only under the supervision of a qualified
pharmacist. TI1ey opcnued a sclf-sel'vice shop where the goods for sale
were displayed on sh.elves in pacbging wit h the prices m;11ked on them.
Cusiomers entering the shop picked up whatever goods they wish ed to buy
and took them to a cashier near the exit. TI1ere was no pharmacist present
near the shelves. but a registered pharmacist was present near the cash desk
and could prcvcnl o customer fron1 buying any listed drug. 111c English
Cou,.L of Appeal in th is case had to identify the precise Lime when :a cOl\tract
was concluded. This required them to decide whether the display of goods
on lhc opm shdvc.1 in a se!C·sm•icc slorc amounted II! an offor or sood1 for
sale or an invitation to treat. 111t• cour t held thnt the display of goods was
selects the highest bid and the contract is completed by the faU of the
hammer. It rollows from this that until the hammer fell. a bidder is free 10
withdraw his offer. "lhi.< is now confirmed by$ 57(2) Sale of Goods Act (Cap
393, 1999 Rev Ed).
, 77
by those present nt the auction are o ffers. Thtt auctioneer
(4) Tenders
7.3 1
Large businesses '1nd public outhoritics often award contracts by inviting
interested parties to tender for the business. Such an inviHllion to tender is
a n invitation to treat and not 3 11 offer {see UOL Devdopn1cnt (J\!ovcna) Pte
Ltd v Co111111i$Sio11er of Srnmp D11tie.1 (2008) referring to Sptn(cr v llnrdi11g
( 1870)). 111c offer is made by the person who submit; the Lender. The
acceptance takes place when the person inviting the tender accepts one
tlw tender bids.
, 78
or
Chapter 7: Offer and Acceptance
7.32
However, there are eireumstanees where the eourts have held that the
invit<ltion to tender 'vas, in fuct, :'n offer. Jn Han1e/n /11vest111e11ts Ltd ''
/loyal Tru.11Co1>f Canada ( 1986), the itwitation to tender pro111iscd thitt che
highest bid would be accepced. In chat case, which concerned che sale of
shores, the House of Lords held that the invication to tender constituced an
offer to enter i11to a contract wich the highest bidder. Nevertheless. because
the higher bid was a "referential bid'" in chat it gave a figure and stated "or
$ 100,000 in excess of any other offer'', th'u bid was invalid. The purpose of
co111pctilive tendering was 10 secure a sale al lhc best po,sibk price. If both
parties had submiued a referential bid it would have been imp-0ssible to
conclude Lhc c.ontracL
Principles of Singapore Business law
7.35
Termination of Offer
(1) Introduction
7.33
7.36
defendants. The plaintiff W<IS liable 10 certain claims under the reinsurance
contracts and decided to negotince with 1he defendants for a reduction of
their liability. In March 1999. the dcfendaiit offered to accept a sum of
US$220,000 from the plaintiff in reduction of the plaintiff's outstanding
liability. On 21 October 1999, the plaintiff IJlurported to accept this offer.
However, the defendant claimed that the offer had since bc'Cn withdrawn
by the dcfendant"s lcuer of demand, mndc on 5 October, co the plaintiff for
pa)'mCnt of lhc plaintiff:, full liability. 'fbe Singoporc High Court agreed with
the defendant that the offer had been revoked. lhc court held t hnt the maker
(2) Revocation
The offeror CM revoke his offer at any time before il is accepted by the
offcrcc. Once revoked , the offer ceases to exist and il is no longer possible
for the offcrec 10 accept it. To be effective. however, the revocation must
be communicated to the offerce. In Byme " \lm1 1"ie11/1ove11 (I 880), the
defendants, a Cardiff company, mailed a lcller on I October lo New York
offering lo sell lo the plaintiffs 1,000 boxes of tinplate<. "lhe plaintiffs
received the letter on I I October and immediately accepted by telegram :md
confi rmed by u letter posted on IS October. (Acceptances by telegram ore
effective as soon as they are sent ; see the postal rule al paras 7.61 - 7.67).
Meanwhile, on R October, the defendants had sent a leuer revokillg the offer,
which reached the plaintiff on 20 October. TI1e court held that "there was
a binding contract. ·m e revocation was not effective since the contract had
'omc Into exis1cn1:e ni ne days before the kncr of revo,a1ion rcilched the
plaintiff.
, 79
In a Singapore case, Overseas Union /usurnnce Ltd v 1i1tegunJ lusurauct Co
(2001). the plaintiff company h<1d entered into reinsurance conlr:\Cts with the
Where an offer has been accepted, a binding contract comes into existence
and the offer ceases to exist. h would be a breach of contrnct to disclaim
nny obligations in the offer. Jiowcver, if nn offer ls ltrrninated prior to its
acceptance no contract can co1n c into existence. 111ere arc five ways in which
an offer 1n:1)' be tennimated.
7.34
It appears from ease law that the revoeation of an offer does not have to be
communicated by the offeror himself; communication may be made by some
0 1her reliable source. Dicki11so11 v Dodds ( 1&76) appears to suggesc that an
implied revocation is possible. If the offeree comes to know of the revocation
of the offer by the olferor through a third party, that wo11ld be sufficient to
terminate the offer. h1 this case, the defendant offered to sell a house to the
p lnintiff, the offer "to be left open until Frida)'. June 12, 9
However, 011
1 1 June he sold the house to someone else. The plain tiff heard about the
sale from his properly agent the same day. Nevertheless, he purported lo
accept the defcndanl°s offer by forwarding " writlcn acceptance before 9 am
o n 12 June. ·1he English Court of Appeal held that the defendant had validly
withdrawn his offer and thal the withdrawal had been validly communicated
to the plaintiff through a third porty.
o r an offer is free to withdraw it at any thnc befo re it is accepted. Notice of
wilhdr:lwal 1nust be given and must reach
<>fffree to be effective. It is not
necessary, however, that the notice of withdr:iwal be explicit. It is enough if
the offeree is given informalion which shows 1ha1 the offeror has changed his
mind and no longer wants to proceed with the offer. This information need
not even come directly from the otfcror.
7.37
Although il is clear that the revocation must be brought 10 the auention of
the offere<'. there is uncerlointy about the exact point al which il comes lo
his <1lle11tion. For example. if revocation is made by po>t. revocation could be
clfw ivc when the kncr reaches his business or when he rends it. There is no
dear authority on this point, but in "/he Brin111es ( 1975) the English Court
180
Cl>ap,.r 7: Offtr and Accrptantt
Princ1plts of Singapott Busintss law
of Appeal held 1ha1, in the ease of a notice of 11i1hdr:iwal of a vessel sem by
801 7.1
ltlrx during ordinary busmrss hours, the w11hdraw:1I w•s cffectivc when u
Wth r«eivtd on the telex n1achine. There "'•U: no rtquirtn1cnt that it be read
by any ptrwn within the organisation.
7.38
7.39
7.40
There i< 110 legal obligation on the part or 1he olferor 10 keep the offer open
for a specified period even if he had promised 10 do so. l n Routledge v
Grnnt ( 1828), Lhe defondanl offered 10 buy the cluinrnnl's house, giving the
cluilrnrnl six weeks lo consider the propO>al. 'I he cou rt held that he could
withdraw lhc olfcr al any lime before acceptance. even though the deadline
had 1101 ycl expired. ·1 he claimant could not accept the offer afler ii hod been
·withdrawn. 'I
is on the basis that an offcrct cannot tnforce an offcror's
promise to keep his offer open unless there is a >tpara1e contract supported
by coru1dero1ion. Such contracts arc called
A legally binding
op11on will bt created 1f the offeree proV1de< somr con<1dcra11on m return
for the offrror'• prom 1sr 10 keep the offer open. Thu<, in Mo1111tford v ScoN
( 1975), the purchaser o( a house paid thr sellrr t I for an opuon to buy.
cxerca<>ble wuhin SIX months. The Court of Appral held th•l the seller could
no1 withdraw the offer before the option expired.
An 01Tc1· may be revoked when it is replaced by a •ub;cqucnl <iffcr. 11ic
second olle 1 111us1 state 1hat it supersedes the ea1lier 01rcr, so that It cnn no
longer he accepted (•ee Pickford.< 1.trl v Crlrsllrn I.Id (2003)).
The rule 1ha1 revocation Is effective only whr11 ii is communicated to
the offerrc causes some difficuh)' in un1la1cr•l con1racu. In such cases
acceptance 1s by perform•ncc or an act. ·1 he offeror "' not aware 1f anyone
ha, accepted or has .iarted lo accept thr offer by looking for 1he lost item.
Accordingly, two 1'<.•ues need 10 be considered: fiN, how rcvoc•uon " to
be validly effected. and >ccond, whrther • unilattral offer <."an be revoked
once
h:b begun. A• 10 the first. 11 seem> to br enough for the
offcror 10 take reasonable steps 10 bring the withdrawal Lo the • llention o(
•uch persons. 'I hu>. 1f lhc offer o( a reward for finding a lo>l item was made
through o ncw>papcr advertisement, it 1vould •uflice 10 place anotl\er s1m1lar
adve1·tiscnienl withdrawing the offer. nhhough there Is no guarcmtee that
everyone concerned will s•• ii. ·1he second question h 111C>rc co mplicated
and h.11 not bt•cn conclusively decided in Singaporo.
181
Is it possible to revoke a unilater•I oner once SM'rfo.rmance has started?
Despite the lradit1onal rule that an offeror can withdraw his offer any ttme before 1l
Is accepted. 1n lhe case of unilateral contratts, there is potential unfairness to people
who may have spenl considerable lime and effort in response to an advertisement
offering a reward for the recovery of a lost pel and In performing the conditions
require<! In the advertlsemen1. An alternotlve approach is
If an orteree begins to
perform his obl19ations within D reasonable lime from the making of the offer, the
offeror cannol revoke the offer. This Is known as lhe "lwo·offer• approach, which
was endorsed by the English Court ol Appeal in Doulia Lid v Fo<1r Millbonk Nommets
lid (1978). Under this appro;ich, the olfcror 1mpllcdly undertakes not to revoke
performance \Vlthin a reasonable
the main offer once the offeree has
llmt. In Singapore, Chan Sek Keong JC {a1 he then was) referred 10 1ll1s .ippioach
approvingly. ln oblrtr, In Dtd<<On Trading (S) Ptt Ltd v Tnmsmotto lrd (1989). Vet
another suggested approach is to allow the olfcror to withdraw htS offer at any
ume before full perl0<mance of 1ht roquor.cf .ict subject to compensotion be1nq
paid to tht offeree who ha> commenced perlomlance b¥ way ol a su1tal* sum f0<
his lrO\Jble in qtlOlltum mttu•I. Tht1e d1fftrent approaches have not yet
fully
considered b¥ tht Singapore coorts - which approach do you think Is best?
(3) Rejection and counler·offer
7.41
An offer is 1ermlnnted when the offeree rejects it. This ma)' be done either
expressly 3S when the offercc
lhal he J1as no inlcrc•I in the offer. or
impliedly, where he purporl• to accept lhe offer with conditions attached or
makes a counter-offer. A counter·otter ha.• two distinct effects. A< the fact• o(
Hytle " Wrmclt ( l 840) illu>trate. fir.I. it 3Cls as a rejrclion or the origrnal offtr
:ind accordmgly. the original offer bpsc,; and second. 11 siand• as a nrw offer
capable o( being accepted by 1he olferor. In this case, 1hr defendant offered
to .rll his farm to the plalnt11T for £1 .000. 'lhe plaintiff madr a counttf'offer
or £950. which the defendant rtfusc.1 'TI>r plaintiff then purported 10 accept
the original offer 10 buy for
lhr Engh.s h court held 1ha1 there W•$ no
con1rac1. "fhe counter-offer had lhc effect o( rCJ<elmg the Jcfcndont's original
olfer. causing It to 1.11i;e.
7.42
I lowcvcr, sometime• ii may be Jlflicull to decide whether lhl' offercc is
making a counter-offer or I; ""·rely asking for additional lr1fornll1tlon on 1hc
offer. in which case there I< no rejection o( the offer. In S1<vms011 1• Mr/ en11
(\880). the dcfrndanl offered 10 sell • quantity o( iron lo th• claim•nt> for
182
Principles of Singapore Business law
Chapter 7: Offer and Acceptance
7.43
cash. The claimants asked whether they eould have credit terms. When there
offer was made until aeceptanee. If goods aa·e damaged before aeeeptanee,
was no reply to tJ1eir enquiry, they accepted the terms of the orig.inal orTer.
the defendam sold the irM to someone else. The English cou11
decided that the enquiqr was a request for 1nore infonnation and not a
rejection of the orTer. I lcncc, the dcfendalll was liable for breach of contracL
Lhen the offer will cease 10 exist.
7.47
In Fi11n11ci11gs l.td v Stimson ( 1962), the defendont saw a car at the premises
o f a dealer on 16 1'vforch, which he decided to buy. I k signed a hire·
purcliase form provided by the plaintiff which stated that the agreement
would be binding only when signed by the fi nonce company. The defendant
took possession of the car and paid the firsi instalment on 18 March. On
2 0 March, he retmned the car because he was not satisfied with it. On 24
March, the car was stolen from the car dealership. but was later recovered
badly damaged. On 25 March, the finance company signed the hire-purchase
agreeme11t, unaware of what had happened. The defendant argued that he
was not bound by the contract and refuicd to pay the inmlments, and
was sued for the breach of the hire-purchase agreement. ' Ilic E.nglish Court
o f Appeal held that the hire-purchase agreement was not bi11ding because
the defendant's offer to obtain the car on hire-purchase was subject to an
in1plicd condition thal the car would rc1nain in substantially Lhe san1e- state
until acceptance. Since the implied condition had not been fulfilled at the
ti1ne the finance con'lpany purported to accept. no contract had co1ne into
existenc<.\
7.48
In Dysart 'limbers l.td v llotlel'ick William Nielsen (2009) the New Zealand
Supreme Court held that as a rule of law an orTcr can lapse if there has
been a fundamental change in the basis of the olfer. TI1e cour t held that an
offer to settle a case hod no! lapsed when lhe offeror's leave lo appeal was
granted just before the offer was acccp1ed. 1 he change of d rcun1stanccts wa.s
11ot sufficiently fundamental.
To distinguish between a counter-offer and a request for information, you
can consider whether a new tcrn1 is being introduced, or whether the request
only clarifies what the offer is.
(4) Lapse of time
7.44
Where the orTcror has specified a time limit by which the orTcr must be
accepted, the offer will lapse if not accepted within that time. This is subject
to the offeror's right to revoke it earlier and any binding agreemml to k.ep
the offer open. However, if it is clear from the orTcror's conduct and other
evidence that the terms of the supposedly lapsed offer continue •to govern
the relationship after the specified period, then the offer is still valid and
capable of acceptance after the deadline (sec Pnnwcl/ Pie Ltd v /11di1111 Ba11k
(No 2) (2002)).
7.45
Where the orTeror has not specified a lime limit, the orTer will J.opse after
a rcoso1rnble period. What is a rcaso1rnble period wotJd depcn d on the
circu1nstanccs of each case. Thus, in dealing with cornn1odities whose prices
Ouctuatc dail)', the period will be shorter. In Ramsgnte Victorin Hotd v
Mo111ejiore (1866), the defendant applied for shares in the plaintiff company
in June and paid a deposit into their bank. Having heard not hing from the
co1np11ny (or fi"e n1o:nths, he wns then lnforn1ed in Nove1nber tht\l shares
had been ollotted to him and asked for the blllance due o n 1hem. He
refused to pay. Tiie court upheld his argument that five months was not
a reasonable tin1c for acceptance of an offer tn buy shares, as th(' price o(
shares nuctuates rapidly.
(S) Failure of a condition
7.46
An offer may be made subject lo conditions, which may be stated expressly
by the offeror or impl;cd by the courts from the circumstances of the case. If
such conditions arc not satisfied, the offer is not capable of being accepted.
For example, when a person offers to buy good•, il is implied thott the offer
is conditional on the soods remaining in the same condition as when the
183
(6) Death
7.49
Death or the offeror or the offcrec n1ay in s.on1e cases tcnninate the offer.
I lo1vever, the law is not entirely dear in this Tegard. It appea.rs that Lhe offer
will terminate if the off'eree knows that Lhe offeror has died; it will not if
the offeree has no notice of it (see Bradbury v Morgn11 (1862)). Whether an
ncceptance is valid if made 1vithou1 knowing about the death of the offeror
depends on the natu re of the contract. Jf the <>ffer involved personal services
e>f the Qlfmll' (eg, to paint a portrait), it cannot be accepted after the death
o f the offeror. I lowe1•cr, other offers may be accepted and become binding
o n the personal representatives of the deceased (eg, lo provide a loan} even
184
Chapter 7: Offer and Acceptance
Principles of Singapore Business law
after the death of the olferor. If the olferee dies before aeeepti11g the offer, the
offer mudt Lo him c.an no longer be acc.cpted. 'l11is is t>pecially so if the offer
is made only to the otforee and is not capable of acceptance by the deceased
conmuetion, the 1iarties have agfeed lo the same terms. In Allianz T11surn11ce
Co (JJgypt) v Aignio11 l11s11rnnce Co SA (200S) the parlks In nn Insurance
contract had previously agreed upon a warramy, bm the final email between
the parties made no reference to Lhc warranty. The English Court of Appeal
held that the emailed reply was intended to be the final reference point and
that a reasonable reader of the email exchange would conclude that there
otTereeS estate or his personal represeol':itives.
ACCEPTANCE
,Nas a contract between the parties which orn itted the warranty.
Definition and Nature of Acceptance
7.50
An acceptance is a final and unqualified expression of
to the cerins
Gny Cl10011 Tng v Loli Su Ti Terence Peter (2009) at (471).
7.54
rnean that there 1nu,<;t be precise correspondence beh"een offer and acceptance
so long as there are no new tcrn1s. 'l hc question is whether what has been
Lntroduced would have been regarded by a reasonable olferor as introducing
of an offer (see
IL is an unconditiQnal agreement to all the terms of the offer which bring a
comract into existence, making both parties legally bound. 1herenft er neither
party c.1n get out of the contract or vary its contents. Acceptance can be
signified orally, in writing or by conduct. An acceptance must be made when
the offer is .slill open> and il 1nust be absolute and unqualified. Acceptance in
The requirement that the acceptance must be unqualified docs not, however,
::i
new term int() the bargain rather than acceptance of the offer (see Midgulf
l11teriu11io11al Ltd" Croup Chimique 1imisie11 (20 10)).
(2) Accep tance must be communicated to offeror
a contractual setting 111ust be ascertained objectively. When there is a history
of negotiations and discussions. the court will look at the whole cont inuum
(a) General rule
of focts to decide whet her a con1 rnct exists (see 1\ltidlink Devclopn1e11t Pie Lt<I
7.55
v The Strmsficltt Group Pte Ltd (2001) al 1481).
·n1c general rule is Lhat before a binding contract can co111e into existence,
the acceptance must be communicated to the olfcror. 1l1e acceptance is
·nie 1node of acceptance depends on the type of contract. As n1entioned
o r the offcror, A n1ere 111ental ussent is insufficienl. \Vhere Jn offeror has
cal'licr in the chapter, in the case of a unilateral contract, the acceptllncc is
through the offeree's performance or an net in return for a promise, while in
the case of n bilateral contracl ii is through the offEree's promise in return for
a pro1nise.
prescribed that the offer can only be accepted in a specified way. he would
not, in general, be bound unless the accepl<lnce is made in that way. 111e
offeror rnn. however, choose to waive any requirement as IO lhe form of
acceptance provided that the acceptance has not prejudiced the other party
(see MSM CoJ1s11/1i11g Ltd v Tanznnin (2009))_
generally said to be validly communicated when it is brought to the notice
7.51
General Principles
7.56
(1) Acceptance must be final and unqualified
7.52
The offeree 111us t ngree to all the tenus contained in the <>ffer. Al\}' ntten1pt
on his pllrl to introduce new terms would result in a counter-offer.
alread)' noted, a counter-offer destroys the original offer and simnhaneously
constitutes n new offer.
7.53
Sometimes when parties carry on lengthy negotfotions ii may be hard to
say exactly when an offer hos been 1nnde and accepted. (n such cases the
court must look al the whole correspondence and decide whether. o n its true
185
Apart from the direct oral or Wl'itten communication, acceptance can take
pince through conduct. In Brogdm ''Metropolitan Railway (1877). Brogden
supplied the raiJwny con1pany with coal for 1nany years \Vithout any
[ornlltl agreement. The parties thc11 decided Lo formalise their rcl3lionship
and the railway company sent Brogden a draft agreement. Bl'ogden filled
sonle blanks. including I he nmne of nn :irbilrator, 1narkcd it "approved"'
and l'elurncd it to the company. 1l1c company's employee put the draft in
his desk drower where it remained for the next two years without anything
being done about it. Meanwhile, Brosden ronninued to suppl)• coal under the
terms of the "agreement" and the railway company paid for it. Eventually.
a dispute arose between the p;irties and Brogden refused to supply co<1I to
186
Chapter 7: Offer and Acceptance
Principles of Singapore Business law
the company holding Lhat there was no binding eontrael between nhem. The
House of Lords held that a contract had been concluded between them.
Brogden's amend111enrs to the draft agreement amoumed 10 an offer which
was accepted b)' the company either when the first order was placed under
the terms of the agreement or at the h1ttst when the coal was supplied. The
parties had indicated their approval of the agreement by thei1· conduct.
7.57
to London and aeeepted by a telex from London to
The House of
Lords held that the contract wos Lhcrefore made in Vienna. In both cases,
the telex machines were in the offices of the parties, and the messages were
received during the norn1al working hours. However, the House of Lords in
Brinkibo11 said that a telex message sent outside working hours would not
be considered instantaneous in certain exceptional circumstances. 111is and
o ther exceptions were described by Lord Wilberforce in 81·i11kibon as follows
(at 142]):
'!he general rule that the communication must actually be received by tl1e
offeror applies to all modes of instantaneous co111111unic:ations including
face-to-face negotiations and communications by telephone. telex and
fax. 'Ibis important principle wM ('5tablished in Eutorcs Ltd 11 Miles Far
Erut Cot'porntion ( 1955). 1l1e plaint iffs in London telexed an offer to buy
copper cathodes from the defendants in A111iterda111. The defcndmts
acceptance back lo London. Later, when sued for breach of contract in
England, the defendants argued that the Engl.ish courts had no jttrisdiction
because the contract was concluded in Holland when they typed tl>e
acceptance on their te lex machine. 1hc plaintiffs, on the other hand, argued
that the acceptance was not effective until it "'"s printed Olli in London. 1l1e
court held that the En glish courts had jurisdiction because where a contract
is 1nade by instantaneous COJn1nunicalion the contrncl
Since 1955 the use of telex communication has been greatly expanded.
and there are many variants of it. ll>e senders and recipients may not
be the principals to the contemplated cantract. 1bey may be servants
Or ascnlS with li mited authority. '(he llll<'SSagc may not reach, Or be
intended to reach, the designated recipient immediately: messages may
be sent out of office hours, or at night. with the intention. or on the
nssurnption, thal lhcy will be read al a Later li111c. Thrrc n1ay be so1ne
error or default at the recipient's end which prel'ems receipt at the time
contemplated and believed in by the sender. 11w messoge may have been
sent and/or received through machines ()pcrated by third persons. And
many other variations may occur. No universal rule can cover all such
cases: they must be resol\'cd by reference to the intentions of the parties.
by sound business prac.tice and in some cases by a judg111cnt where the
risks should lie ...
co1n plcte o nly when
the acceptance is received by the offeror.
7.58
7.$9
As explained by Lord Denning in the above case, suppose the offcror shouts
an offer to the offeree who is across the ril'er and just as the offerce shouts
back an ncccpt;mcc a noisy aircraf\ llies overhead preventing the offeror
fro ln hearing the <>ffcrec's reply: no contract has bren nrnde. The samnc \\'ould
apply if the contra.et was m;1de by telephone and the olferor failed to hear
what the offeree said because of the interference on the line; there is no
contract until the olforor knows that the offcree is accepting the offer. 1 he
main reason for th is rule is thal in the alternative people might be bound
by a conlrnct without knowing th<ll their offers ha"e been ticceptcd, which
would lead to future diOicultks. However, the general rule will not opply
strictly if the offeror is at fault, for example, where he failed to maintain his
equipment in a propN condition. To hold it otherwise would not be fair Lo
the offeree.
The decision in Entores was approved by the House o( Lords in llri11kibon Ud
v Stnliag St"hl 1111d St·n/ilwnrenlimrdds Gmbll ( 1983). 'lhe facts we re •imilar
except for the locotioll. In Bri11kibo11, the offer was mode by telex fro111 Vienna
187
This position was accepted in Singapore in Trnns11iko f>te Llrl v C-0111munlcntio11
Tecl111ology Sd" Bhd (1996}.
7.60
Do the rules relating to instanta11eous communication apply to email! In
Olivnyllc Ply lid v Flottwcg AG (No 4) (2010). a decision of the Federal
C::ourl of Australia, Logan J noted (at 125]) that experience suggests that
email is often, but not invariably, a form of 11ear instantaneous
c:o1nnn111ication. However, one could argue that e1nnil is not instant.aneous
because 1he contents of Lhe e rnail nre c<>nvcyed in "packets" not necessarily
al the same lime (see Chapter 24, para 24.20). Email coltld also be argued
to be no dilferent from the normal post because it is subject to delivery
d elay.s and is to so
extenl outside the control of Lhe con Iracting parties.
The1·cfore. tl1c positio11 regarding email correspondence is not settled (see
C h;ipter 24. para 24.21 :mJ Table 24.2).
188
Cl>ap,.r 7: Offtr and Accrptantt
Princ1plts of Singapott Busintss law
(b) Exctptlon: Tht postol otctptonu rult
7.6 1
7.62
7.63
1he po>tal rule of acceplance is on rxceplion lo the general rule that
acccplance must l>e communicated 10 1he offeror Instead, accep1ancc lakes
plocc al 1he lime wh<!n the lener of acccptoncc i• posted and il does no1
matter whether lhc letter reaches lhe otTeror nl all. 'l hi; exception appli<s
equolly to telegrams a lthough this mode of communication is now hardly
in use.
1 hc postal rule was laid down in Adams v L111dscll ( 1818). On 2 September
IR18, the dcfendanls wrote to the plainilffs offering to sell wool and
requiring an answer by return post. In the normal course the lcller would
have ret1ched the plaintiffs on 3 Scptrmber but >lllCC the defendants did
not addres< the letter correctly. it wa.s deli\'ered to them on S Sep1embcr.
'!he plamtilf> posted their acceptance the same <"·ening and it reached the
defendants on 9 September. If the defcndanl> had not misdirected the letter,
then the repl)• by return post would ha\'e come by 7 September. Smee they
did not he•r from the plaintiffs by thi> dote, they >Old the wool to a 1hird
p•rty on 8 September. The courl hrld thal the contracl was concluded on 5
Sep1<n1bcr when the letter of acceptonce was posle<l.
It 1m1kc• no ditfcrc11ce to the rule even if 1hc lcner of accept;mcc is losl
In the post. In No11sd10/d Fire 011rl Carr·iag<' Aaidrnt l11s11rm1rr Co v Grn111
( 1879), the defendant by his letter agreed to buy 100 shares in o company. He
paid S per ccnl of the price of £100. A letter nccepting his offer w;is pos1ed,
but he never r·eceived 11. The company sub<equenll)• welll inlo hquida1ion
ond a demand was made for payment of lhe balance of £95. 1he English
Coun of Appeal held that • conlract was formed when the letter was posted
and 1her<for. he was obliged to pay the balonct. I fownrr. when a leuer
o( accepi.nce is lost or delayed becau<e It bears a wrong, or mcomplele,
addre-. such nusdirection will be due to the carele»ne» of lhe otrercc and
the postal rule should nol apply to such case< (see /,/ Korbrtrs v Trnnsgrnw
Sl1ippl11g BV (2005)).
7.64
The rntlonale for the postul acceptance rule ls hlslorlcal
il dales back to
19th centu ry Englond when lhc communication lhrough po>t w.s s.lower
nnd less rcllnble thon il is todny. It was then, a.1 It I; now, en;icr 10 prove that
the leuer hns been posled lhan to prove lhllt It ha; been 1cccived. The rule
189
continues to apply in England and has been applied in Singapore (Stt
Se11g H<11g v Guardia11 Ass11ra11ct Co Lttl (1932)).
7.65
ut
The pos1al rule of acceptance will apply subj ect to two condition<. Fir>l, 1t
will apply only where il b rca;on•blc. An offer made by pO>l may generally
be accepted by posl, bul in >Omc circumstances, il may be tca<onable to
accept through post offer. made in other ways. The offeror is al libeny 10
prescribe the mode of acceptance and it is open lo him to expressly exclude
the applicallon of the postal rule. Second, the lclter of acceplancc mu<t be
p roperly stamped and addressed noted above.
°'
7.66
Can a pos1al acceptance be recalled ot revoked before il reaches the offe1or?
There ore two ;ides to this t<Sue. As we have seen bffore, a vahd acceplance
of an offer rcsuhs in a conlracl. 1hu•, 1f the poslal rule
a contracl
comes inlo cxislencr umned1a1ely upon the posung of 1hc letter of acctp1ance.
In such a case. 1he olfer<e h•s no •cccplance to rC\'oke. Besides. it would not
be fair lo the olfcror of lhc otTercc could have lhe bcsl of both world> - to
avail himself of the J>O>tal acceptance rule lf it suilcd him, or 10 re\'Oke tu;
acceptonce if it did not. On lhe other hand. it is possible to argue 1hn1 if 1hc
letter of acceptance can be inlercepted by fa>tcr mearu, 1here is no prejudice
to lhe offeror since he would be unaware of t he acceptance. In any ca;c, the
olferor had 1hc choice of 1hc medium. If he chooses lhc poslal medium, he
1nust bear the consequences.
?.6?
Does the postal acceptance rule apply io communications via email?
ll depends on whether cnud 1s con>idcred a mode of inslanlancous
commu111cauon or nol. If so. then the general rule would apply. and 1f nol,
1he postal acccplance rule would apply. Conscqucnll)'. the pos111on remain<
mcondush·e. for a summary of iudicial (obitcr) and acadrm1c argumenu on
whclhcr the general receipt rule or the postal rule should apply 10 em•il
acceptances. please refer tn Andrew Phang R L (ed), The l.aw of Co111ratt 111
S111gapore (20 12) Chaplcr 3. pam 03. I 9·1-03.206.
(c) Acceptance by sllenct?
7.68
Since accepHrnce Is com1>INc only when communicaled 10 the o lforor, 11
follows that ""cptancc must lake ormw form of objective manifestat ion of
inkntion through posilivt• action. Accordingly. sikncc cannut normally be a
mode of acccp1ance.
190
Chapter 7: Offer and Acceptance
7.69
7.70
However, it could well be the intentions of the parties for
to be a mode
of ac«ptance. A strong case for inferring that the offcrce wants his silence 10
be regarded as acceptance is where he says so. lo Re Selectmove Ltd (1995)
the English Court of Appeal found that it was in fact the offerer who had
undcr1ake11 thal he would communicate with the offeror if he did not desire
10 conclude 1he conlL"act. This decision can be contrasted wilh Fe/1110,.sc v
Bindley (1862). There, the plaintiff who wanted to buy his nephew'.< horse
to hirn: .. Jf I hear no n1orc about hin1, J shall consider tJ1r horse
mine at £30 15s:' 111e nephew did not reply to this letter, bu1 he did ask !he
auctkmeer, whom he 1,,d engaged to sell his farming stock, not to sell the
horse as he had sold ii 10 his uncle. lhc auctioneer sold the horse 10 a third
par1y by mistake and the uncle sued him for selling his property. 111e court
held that there was no co11tract between 1he nephe1" a11d the uncle, and
therefore 1he ownership of the horse had not passed to 1hc uncle. Although
the nephew had me1uali)' accep1ed the offer. some form of positive ae1ion
W:lS required for a valid accepl anee. The difference between 1he diecision in
Re Selectmove Ltd and the one in Feltl1emse v Bimlley is that in Re Seleclmove
Ltd, it was the offercc who was seeking the possibilil)' of acceptance by his
silence \vhile in the lauer, it was the ofj'cror who \'laS seeking lo in1pose on
the offer« 1.hc term of acceptance by his silence.
ln Singapore, the proposition th:lt silence can in except ional drcu1nstanccs
be construed as :.1cccptance was recognised in Southern Ocean Sh ipbuildi,Jg
Co Pte Ltd v Dc111schc 811nk AG (1993) (al (46)-147)) and in Mid/ink
Dcvc/opme11i Pie Uri 11 771c Slnnsfield Group Pie Lid (2004) (ni (SOJ-152]).
Principles of Singapore Business law
(e) Cross-offers
7.72
(f) Battle of forms
7.73
Instead of negotiating tern's each tin1e a contract
n1ade, businesses
oAen enter into agreeinents using lheir stnndard forn1s of contract. This is
convenient as it saves effort. 1ime and money. Undersiondably. both parties
would like 10 conch1de 1he cont rncl upon their own terms. Since the terms
and conditions on 1hese standard forms can be incompatible wi1h each other,
this wi.11 sometimes lend 10 offers and counter-offers. If counter-offers are
constant!)• being made, 110 concluded contract can ensue as each counteroffer destroys the original offer and itself constillllcs a new offer. This
could lead to an endless exchange rcsulling in no con1ract. 'Ibis si1ua1ion
is popularly known as the "battle of forms" where the contract is ultimately
fo rmed on the lerms of the party who fires the last shot.
7.74
The leading decision is Butler Mnc/Jinc Tool Co v F.x-Cell·O Corporntio11
(Et1gla11d) Ud (1979), which was decided by the English Cour1 of Appeal
:md Inter followed by the Singapore courts (see Gny Ciloo11 l11g v Loh Sze
Ti Terence Peter (2009) at [63)). On 23 May 1969, the plaintiffo offered 10
(d) Ignorance of offer
7.7 1
The general rule is that a person cannot accept an offer of which he has
no knowledge. In such a case, ii is not possible to reach an agreement
resulting in ::i binding contract. The Australian High Court decision of
R •' Clnrke ( 1927) is a leading c.ase in support of 1his principle. The.-e, 1he
Australian Government offered o reward for information leading to 1he
conviction o( the 111u rdcrs of two policen1en. 111cre was also a pro1nise of
free p;1rdo11 t<> an ttccornplice giving such infol'nrntion. Clark, who \Vas an
accomplice, gave the requi red information 10 obtain pardon withou1 ony
lh!lughl !lf lhe reward at 1ha1 time. He
' laimed the reward. lbe
courl held that he could 1101 ch1in1 Lhc reward as he was ignorant of ii al thal
crucial 1iinc.
191
The general principle is that there is no contract in 1he case of cross·
offers (see Tinn v Hoffinnm1 6- Co ( 1873)). Cross-offers happen when two
par1 ies se11d offers 10 each other i11 identical 1erms and al about the same
time, and their leners cross each other in tr.1nsit. For example, A offers to
purch:1sc B's antique clock for $5,000 and l\ oilers to sell 10 A his antique
clock for $5.000. a nd bo1h offers are pos1ed at 1he same lime. 111e obvious
reason would be 1ha1 1herc is no meeting of 1hc minds beMeen them.
Unckr the rules •pplicablc to offer and acceptance, there can be no \•alid
acccplance
the offeree has no knowledge of thl· offer at the relevant
ti111c. f lowever, there is an alternative view· that has nol yet been accepted b)'
the courts. Acaden1ics have pointed out thal in such a situationt each party
does in truth contentp1ate legal relations upon an identical basis, and each
i.s prepared to offer his own promise as co11siderat ion for the promise of 1he
other. There is not only a coincidence of acts. bu1 a unanimity of minds. (see
M P Furmston, Clies/Jirc, Fifoot n11d Fur111$1()11$ Lnw of Contrnct (17th ed,
2017) at p 75).
192
Chapter 7: Offer and Acceptance
Principles of Singapore Business law
sell to the defendant bU)'CfS a 1m ehine, delil'ery to be m3de in ten months.
The offer was made on the plaintiff's terms and conditions, which included
a price variat ion clause and stated thnl these te1Tns nnd conditions \\tere
to prevail over <lny terms and conditions in the buyers order. On 27 May
the defendants ordered the machine on their order form that excluded
the price variation clause. Al the foot of the order form was a tear-off
slip, which stated, "We accept your order on the Terms and Conditions
staLed thereon:• On 5 June the plaintiffs signed the slip and sent it back
to the defendants w ith a covering letter th:it stated that the order "is
being entered in acc()rdance with our revised quotation of 23rd May''. 'Die
was d('livered. 1berc was, in facl, a subsequent rise in cosu, 3nd
the plaintiff.< invoked the price variation clause, but the defendants resisted
such a claim.
7.75
The court held that t he contract was cmicluded on the defendants' terms.
Their letter of 27 M<ly w;is a counter-offer, which h<ld been accepted by
the plainliffs on 5 Ju ne. Though the plain1·iff's coveri11g letter did refer to
the offer of 23 May, the court held that it was only intended to idemify the
price and the ident ity of the machine. 111c majority of the judges in this
case ado1>ted the traditional offer. counter-offer and acceptance approach.
Here, the accepta11ce is complete only when a party finally concedes b )' way
of unqualified acceptance as opposed to a mere cot111trr-o!Ter. 1ltc English
Court of Appeal ht1s reaffirmed this ruk in 'rekdnln illlercomretliorrs Ltd v
Amplic110/ {2009).
Box 7.2
Is there another approach to the "batlle of the forms" situation?
In Burler Machine Tool Co, although Lord Denning endorsed the traditional approach
discussed above, he advocated a more radical approach. This requires looking al
all the documents passing between the parties and gleaning from them and from
the conduct of parties whether they had reached agreement on all material points,
despite the dilrerences between the terms and conditions printed on the back of the
forms. However, although Lord Dennlng's approach might give the judges flexibility,
it has generally not found favour with the English courts, probably because It is loo
vague and may result in uncertainty. This approach has also not been fllvoured by
the Singapore Courts. The Singapore Court of Appeal in Goy Choon Ing v Loh Sze Ti
Terence Peter (2009) slated (at 163)) that there Is no reason not to continue adopting
the lraditioMI app1oad1 in Singapore. Do you 091ee?
SOM E
ls.sues
R ELATING TO O FFER AND A CCEPTANCE
Certainty and Completeness
7.77
A contract will come into existence only if the terms of that agreement
arc both certain and complete. It should be possible to determine with
certainty what exa"IY has been agreed upon between the parties. 1lie court
will not make a comract for the parties but rather decide through objective
criteria whether the agreement is reasonably certain. Despite negotiations
between the panks there may be no enforceable contract if 1hc
is: c:o,,t/Uioun/, i11ror11plete or vflguc. \Ve will brieflr consider lhcsc situations
7.76
(n a s ituation \vhcre both sides insist ()n having Lhe last word, a contract
\viii not co1ne into c>:istence as agrecn1ent will never be reached. In
a situa1ion. it is possible for the court to conclude that there is a contract,
but on neither party's terms. In GHSP Inc v AB Electrorric Ud (2010)
1he claimant's terms imposed unlimited liability on the seller while the
defendant's terms effective!)• excluded such liability. The issue was whose
terms applied. 111e court noted that there was a deadlock, bu1 also noted
that there was a contract that had been performed. 111e court filled the gap
by implying the tern1 contained in s 14(2) of the Sale of Goods Act 1979
concerning the quality of the goods supplied.
193
below.
7.78
Someli111es parties n1ay enter into agreen1t>nls "subject to
.. o r
..subject ta tr fon11n l contrnct being drnwu up by our solicitors.._ These words
postpone li:ibility until such a document has been dr:ifted :md signed.
Because of this. the general view is that no binding contrncl has been
concluded (see Winrr v Bull ( 1877): 111oms"'' Plaza (Pie) /.,td v Uq11id11toN
of Yaolrmr D"parlmc111 S1orc Singapore Ptc Ltd (200 1): NorwcSI Holdirrgs Pie
lid (in li1111idnlio11) v Newport Mi11mg Ud (2011)). In Norwm, the Si ngapore
Court of Appeal noted (at (24)- 128]) that the question whether there was a
binding contract bctwec11 the parties should be determined by considering
nll thc circumsllmces, including what was communiented between the parties
19 4
Chapter 7: Offer and Acceptance
Principles of Singapore Business law
if one of the parties Fefused to appoint a valuer aeeording lo the method
s pecified under the terms of the lease, the court could nevertheless treat
the agree1ncnt as if i1 were one to pay a reasonable price, which \\1':.tS to he
r.eached by applying objective standards. The Singapore High Court followed
this decision in Ta11 Yeow Khoon "Ta11 l'eow Tar (No I) (2000).
by words or conduct, not just the inclusion of the stock phrase "$ubjeet to
contractro. ln this case, d'e docunlentary evidence of the conununic:u ion
between the parties contained several objective indications that the)' had
not intended to be comractuall)' bound until a formal Sale and Purchase
Agreement was negotiated and executed. Hence, there was no binding
contract between the parties.
7.8 1
7.79
Sometimes the parties ma)' stipulate in their agreement that "t.erms and
conditions will be "g.rccd upon later''. In such cases there is presumed to
be no contract unless there is ckar evidence from the facts or the- language
used b)' the parties that they had intcnckd to enter into a binding contract..
In the English decision of RTS l'lexible Systems Ltd 11 Molkerci Alois Muller
GMBH (2010) the parties entered into a contract through a "letter of
intent" while they were negotiating a full formal contracL A dr.aft of 1he
final contract was produced, which stipulated that it would be effective
onlr when executed. However, 1he draft was never executed. Meanwhile
the plaintiff curried QUt substanthil work at the defendant's factory after
the expiry of the letter of intent and claimed for the work aone. 111e
Supreme Court (previously known as the House of Lords) found dear
evidence of the existence of a contract because, among other thing$, it made
no commercial sense to S3)' that the parties agreed to the work without
nnl' relevant contract terms. 111e principle laid down in this case - that
the parties can b)' their conduct waive reliance on the "subject lO contract"
term - was cited with approval by the Singapore Court of Appeal in
Norwest (at 124)).
lo Cooperatieve Ccntrale Raijfeiseoi-8oerc11/eenba11k BA (1rarli11g as Raboba11k
111tema1iona/), Si11gapore 8ra11cb v Motorola Electro11ics Pte ltrl (2011),
the Singapore Court of Appeal affirmed (at 146]) Lhat contracts might in
certain cases be implied fro1n a course of co.nduct or dealings between lhr
parties, from c.o rrespondcnce, or fro1n all relevant circumstances.
it
was al1eged that an implied agrcen1cnt ex_iste:d, the court wHI scrutinise the
evidence to determine whether all the elcnu:nL;; o( a valid conlracl {n:.unely,
offer and occeptance. consideration, intention to create legal relations, and
certainty of terms), had been proven on a balance of probabilities (at [47]).
7.82
Vagueness sometimes overlaps with incompleteness since the agreement
ma)' be so vague as to be incomplete. In Smmmell a11d Nephew Ltd "
011sto11 (194 1), Ouston wanted to acqu ire a 11ew van on hire.purchase. 111c
ngreeme1\l stated that "this order is given on the understanding that the
balance of the purdrnse pl'ice can be had on hire-purchase cerms over a
period of two years''. After some disagreements. Scammell refused to >upply
the van. Scammell argued chat the agreement was not certain enough to
a 1nounl to a contract. 1 hc House of Lords held lhal there was no contrac t
between the parties because the agreement o n hire .. purchasc lenns was so
vague that it could not be given a definite n1eaning. For instance, it left open
7.80
$uch questions as whether payments would be made on a weekly, nwnthly or
yearl)' basis; whet her there would be an initia.I deposit; and what the interest
rate would be. Hence, the parties would need to reach funher agreement
before there could be a completed contract.
As regards completeness, though the courts will avoid n1aking contracts for
the parties, the)' arc willing to uphold contracts where possible b)' filling
the gaps. For this purpose, the court mar use a definite formula;( there is
one (Brow11 v Gould ( 1972)). ·n1e other factors that the court may consider
include a previous course of dealing between the parties or a trade pructicc.
In Sudbrook Tmdi11g 11 Egglcto11 (1983), a lease gave the tenant an option to
buy the land absolute-ly, "at such price. not being less than t l 2.000, as may
be agreed upOI\ by two valuers one to be nominated bJ' the lesso>r and the
other b)' the lessee and in default of such agre<·ment by an umpire Qppointcd
by the ... valum .. .': 1he tenant exercised the option to purchase but the
hmdlord rdusc<l to appoint a valuer. ·1he House of Lards held that even
195
7.83
Generally. the courts will try as far as possible to give effect to a contract
particularly where the pa rt ies have acted on the agreement rnther than to
s trike it do,vn 011 Lhe ground of vagueness. To declare a contract l'Oid for
unccrt,1int)' is 3 Inst resort conclusion (see Slln111 v Lightllo11sexprtss Lt1/
(2010)).
196
Cl'! apter 7: Offu and Acctptanct
Box 7.3
Are t he offer and acceptance rules too arti0tlal7
A\ we havt sten, a contract comes into existence through constnsus between the
parties as manifested through offer and acceptance. Yet this theoretical framework
may nol neatly f1t all cont.ract situations and could result 1n artificiality. Lord
Wilberforce In New Zealand Shipping Co lid v AM Sotttrthwollt & Co Ltd (The
Eurymedon) (1975) highlighted sales al auclions, supe11narket purchases, boarding a
bus, buying a train ticke t, tenders for supply of goods, offers of rt•wards, accep tances
by post, and manufacturers' guarantees, as examples of such situations. He said,
"These arc all examples which show that English law, having committed lllelf to l•l
rather technical and schematic doct rine of contract, in application cakes a prae11cal
approach, olten at the cost of forcing the facts to ht unus1ly into marked slots of
offer, acctptanct and (Onsidl!ration.•
Although the courts will ordinarily apply th• sottled logal rules, at limes they
have rosorted to "backwards• roason1ng to achleVt! ju>lJ<e between the parties see, for e.. mple, the two cases on exception clauses d1scu>sed 1n Chapter 11,
v Barry Urban OIStr>CI Council (1940) and Thomton v SllM I.OM Porting Ltd
(1971 ). In these cases, the respectJVe courts held that the exceptoon d•uses were
not part of the contract as they were introduced alter the contrKt had been
concluded
0 1fficulUts with the offer and acceptance model
arise beca use of
the courll' attempt to achlew multiple objectives simultaneously These include the
court's wish to 91ve effect to the parties' intenhon, the" desire to achieve a just result
in each case, and the need to establish a clear rule which can be applied to all future
cases. Nevertheless, the courttS' use of the mod el, despite occasional artlflclall ty, has
generally nlded In achieving a just result.
C ONCLUSION
7.84
We started thi> chopter by defining a contract as a legally binding agreement
and introduud \'aflOUS terms that are used in the context of t h e law of
contract. We then considered the requiremrnts of a valid contract and
noted that the first of these is co11stm1.s nd 1drm, that is. the meeting of
the nunds. 1111s " ascertained objectively through the requirements of offer
ond acceptance. We noted how each of these arc governed by rules that
m:1y •<>mctirncs be difficult to apply in practice. We rounded off the chapter
with a considerntlon of t he courts' approach to ;uch p1·actical difficulties in
determining the existence of the offer and ac((•ptancc, especially where the
agreement llppc.u·s to be cond itional, incomplete or
197
This page imett1ia11ally left blank
Principles of Singapote Business Law
Chapter 8
Consideration and Intention to
Create Legal Relations
8.1 - 8.2
Introduction
8.3-8.9
Consideration
8.10
8.69- 8.70
Intention to Create Legal Relations
8.71 - 8.74
Social and Domestic Agreements
8.75- 8.79
Business and C-0mmercial Agreements
8.80-8.82
Conclusion
Consideration Must be Requested for by the Pron1isor
8.11 - 8.17
Consideratio:n Must Not be Past
8.18-8. 19
Considcralion Must Move from the Promiscc
Consideration Must be Sufficient
8.20-8.22
8.23-8.24
8.25- 8.27
8.28-8.30
8.31
8.32- 8.41
8.42-8.45
8.46
8.47
8.4 8
8.49- 8.50
8.5 1- 8.60
8.61-8.62
8.63- 8.64
A.65- 8.68
Concept or "Sufficiency"
Intangibles and Moral Obligations
Forbearance a nd Con1pron1ise
Existing PubHc or Legal Duty
Existing Contractual Dmy
( I) Owed to third party
(2) Owed to the promisor
(:.i) Jn return for
(b) Jn
:.l
pron1ise for 1nore
for a promise for less
\'\'hen C·o nsideration is Not Required: The Exceptions
Contract by Deed
Promissory Estoppel
( I) Meaning and origin
(2) Elcmc11ts or promissorr cstoppcl
(a) Clear and unequivocal prom ise
(b) Reliance
(c) Inequitable to go back 011 prontisc
(d) Shie ld, not sword
(3) Effect of promissory estoppel: to suspend or extinguish?
200
Olapttr 8; Consideration and lnttntion to Crtate
8.5
INTRODUCTION
8.1
In Chapter 7. we considered the circumstonces m which the law would
rccoi;mse that parties ha>« come to an agreement. I lowcver, the law does
not enforce all agreemems. Generally, ideas of fairness. the cone.em to give
effect to the intention of parties to the agreement (thu> focilita11ng the "free
market" economy) and public policy concern> nrc relevant in deciding which
agreements to enforce.
8.2
Hence, two ot her element.-; (in addition to the pre;cnce of nn agreement) are
required ior the fonnation o( a contract: co11sider1ttio11 and ;ntt11tio11 to rreate
frg11/ rclm1011s. In this clrnpter. we shall consider the following questions for
each of 1hc1c legal rcqutremcnl.i;
o
What arc these legal requirements and th• ra11onale or JUSllfication for
them?
o
When. 1( at all, .,., these requirements not nrcc=ry for the <nforcoment
of an agreement ("the exceptions") and what arc the 1us11fications for
exceptions?
o
Pnnc1plts of S1n9;iport Business Law
Rtlations
8.4
o
/11 return for A$ promise: ll provides consideration in the form of dt/1e•r
o benefit conferred upon A (le, A obtains the right to ownership and
possession of the car) or a 1frtrimtt1t suffered by B (ie, B having to part
o
111 rtturt1 for
promlu: A provides consideration titlter by conferring
upon B a w11tfit (ie. the promise to pay B the purchase pnce). or by
to pan \\1th his money).
suffering a detriment (ie, A
with the car).
o
Jn return for a
a pro1n1see ma)' ofif'n ha\"e conferrtd a benefit
as well as suffered a delriment. llowe''"r, the law only require• titlter
a benefit or detriment to ;atisfy the requirement of considcrn11on (sec
para 8.3 I for an example where only " benefit CJ<ists to support a promise
without a detriment being suffered by the pro111isee).
o
In any one ngrccnu:nt, n pnrt)' n1ay be both a pron1isor rind n
depending on th" promi>c under discussion. Thus, it is important to
specify the prom1>e that I< sought to be enforced when we arc trying to
d.cide if consiJer.tlion exbls to ;upport that promise.
Is th• law on tl\esc legal requirements and txccptiOM coherent and
>ati>factory!
'lhc
ruk is that a promise ;, only rnfor(eJblc 1f it i, >upported by
con;idtrution. that I<, where the pronuse is given 111 CArl11111g; for somttl1111g of
value. Such reciprocity is said to be the reason and 1u.<t1fication for the enforce·
ment of the
However, the reader should note that cxctplions to th•
gener•I rule exi<t and will be discussed 111 detail later (<cc para 8.46 onwards).
So "'hat exactly i> consideration? Consideration I; defined a> somtt/1i11g
1/1n1 /ms 1•n/11t 111 1J1r tyes of tltt law n111l gi1w1 iu r<rl1n11gt for a promist.
Tmditionally, the "benefit detriment analym" ;, u;cd to explain consideration
(sec C11rrir ''Afoa (1875) at p 162):
A vallmblc consideralion, in lhc sense o( the lo,\\', 1nay consbt e ither
in some l'ight, Interest, profit, or benclil accruing to the one pnrty, or
;c'lme forhcarnnce. detriment, loss. or rc;po11>ibl l11y given, s11tfered, or
undertaken by the <>ther.
201
Bs
Several observations can be made from the abo\'e example:
CONSIDERATION
8.3
Take the example where A 2grees to purchase B's ear al the price of SS0,000 (see
Figure 8 .1). As is 1)1'1Cal of mmt agrttments. there are two promises. There is
A'.s promise 10 purchase B's car at SS0,000 and R's prom15<' to transfrr ownership
and possession of his car to A. I'or 1•11Clt promise to be cnforctabk, the recipient
of the promise must provide consld<ration in exchange. The law refers to the
maker of a promise a> the "promisor" ond the recipient of a promise as the
To dcter111111e If each promise is supported by consideration and
there(orc enforceable, the bencfit- dctrin1ent nnalysis is used
lA t
(Promt•m)
[Proml1U)
A PROMISES
to P<#<hllH ond poy $50.000 tor
B s car
B pmm1u1 to stN end dfHNfH' ftts car to A
(PromtstJ]
IProml111t)
Figure 8.1
R.6
Two >Cll of promises In an agreement
Consideration may nlso be defined as ilw /'rice for p11rclinsl11g • promise.
In the example •bove. A can be >lllll to have boug/11 B's prombe of >Ok
a nd delivery of the h11tcr.. car •I the prlc" or constderation of SS0.000.
202
Principlr:s of Singapore Business law
Chapter 8: Consideration and Intention to Create legal Refations
Conversely. B can be said to have bo,.ght AS promise of payment at a price
something that has 1·nlue i11 the eyes of
the law. What the layman may consider factually to be a benefit or detriment
rnay not be :ltcepted by the law as conside rat ion.
la'" only recognises
consideration which it deems to be s11f]icie11t (and ii docs not concern itself
with the ndCIJuncy of the consideration). Thus whether consideration (and
Lhe related concepts of benefit and detriment) exists is a l•glll inquiry rather
thnn a fnctual one. This has led comnientators of the law to sugge.<t that
consideration ls ac.tually aboul the policy reasons that justify the en(orcen1ent
of a promise (see R Halson. Contract Law (2001) at p 160).
Second, eonsideration is defined
or con:;ideration equivalent to the car.
8.7
Considcrntion must b-e distinguished from a co11ditio11 to which a prom ise is
subject. If A sa1•• to B "I will buy you a car when you attain the age of 21•:
the q uestion is whether A is promising a giit subject to the fulfilm ent of a
condilion or making a contractual promise to be accepted by a reciprocal
promise by B. In the example above where the fulfilment of the condition
is nol within lhe control of lhc pronli.sce, the prorni.s(• is likely to be a 111cre
conditional gift. However, where the fulfilment of the condition involves the
performance of some act by the promisee, it is not as dear.
8.8
The difficulty is illustrated by the differing \'icws between the judges deciding
the case of Chappell & Co Ltd v Nestle Co Ltd (196-0). The defendant company,
Nestle, offered to sell records of the tune "Rockin' Shoes" for a nominal cash
price and th1·ee wrappers of their chocolate bars. 111e court had to decide
whether the chocolaL.c wrappers formed part of the consideratio n for the
purchase of the records. A majority of the judges thought so as Nestle had
(indirectly) bc11ejittcd from the receipt of the chocolate wrappers since its
chocolate sales n1ight have increased in connect ion \'1lth the pron1ot·ion. llte
purchaser had also suffered • detriment having been put to the tro uble of
purchasing the chocolate bars in order lo purchase the record. J\ minority
of Lhe judges, however, disagreed as they felt that the requirement for the
wrappers was merely a condition which a purchaser had to fulfil before he
could pureluisc llte re.cords.
8.9
·•seneflt-Detrlmont"
"PI
rce o f promfse"
b& r(K1u.<i.stcd by
a benefit or detriment must have been rcq11csted by the pro mi,;or in
order t.o
a valid considcr:nion:
o
past consideration is no
o
consideration 1nust n1ovc fronl the pronlisce.
and
203
Value In eyes of l3w
I
J
Consideration must
*
Consideration
must not b-0 past
Con.sldorntion
must movo from
promlsor
Consldetotlon
must be
sufficient: need
not be i1dequate
Figure 8.2 Significance oft.he detlnttlon of consideration
CONSIDERATION MUST BE REQUESTED SY THE PROMISOR
8.10
The definition of consideration is also significant in o ther ways (see
Figure A.2). First1 consideration is defined as soinething given hr exchange
ior a promise. The idcll of exchange o r reciprocity is said to ind icate that
the law will only enforce borgains as opposed to gifts. 11ms gratuitous
promises, that is, promises to confer some thing or service for nothing in
return. arc generally not enforceable (see exception in par• 8.46). It also
oth('r ru.Je-s concerning consideration:
o
Exchange
The idea of excht111ge requi res that the benefit confer red or detriment suffered
by the promisec must be requestC</ by the promisor. "I hus, in Combe "
Combe (1951). the plaintiff was unsuccessful when she sued her ex-husband
fo r breach o f a promise to pa)' her an :-tnnual n1aintennnce o f £ 100 after
their divorce. Relying on her ex-husband's promise, she had refrained from
applying to the court for maintenance (and thus had arguably conferred a
benefit o n her husband). However, the court held that the defendant exhusband'.< promise was not supported by any consideration as he had not
i:equcstcd her to so refrain.
CONSIDERATION M UST
8.11
Nor
BE P AST
An act done />ri<>r lo and i11dependently of n promise cannot be regarded as
valid consideration for the promise since ii i. 1101 done i11 e.<c/1a11ge for the
204
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
promise. Henee, if A voluntarily washes B's car and thereafter. B, impressed
8.1 6
by Ns kindness, promises Lo pay $50 to A, the promise is not enforceable as
the "consideration" provided by A occurred prior to B's pl'Omise. Such past
arc convenienlt)' 'referred to as '"past consideration':
8.12
Past consideration 1n ust be distinguished frorn ext•cutrd considcralion. To
appreciate this distinction, we must understand the concepts of cxewtory
and executed conside:rotion. For example. B promises to sell his car to A
and deliver it in a n1onth•s ti1ne in return for /\s pro1nist:' to 1nakc: payment
on delivery. At the time the contract is formed, both A and B's promises
have yet to be performed. They are cxecutory in nature but are still valid
consideration for each other's pro n1ise. If. at the time of agn·emcnc. A hands
11\e
8.1 3
8.14
o
the acl was done at the pro1nisor's request;
o
there was an understanding between the parties. at 1he tin1e the request
was made, that Lhc act would be compensated by payment or by some
other benefit: and
o
the promise of compensation would be e nforceable if ii had been made
in advance of I he act.
This decision is often regarded as an exception to the rule that past
price 10 B. who delivm his car to A simultdneously, both parties
have furnished executed considerat ion: Lhe consideration is performed at tlie
consideration is no c-Onsideration and
been endorsed in Singapore (sec
Sim Tony v Lim Ah Glrec ( 1995); Rni11forcsr Trading Ltd v Stmc Ba11k of India
ti1nc the contract is .fanned.
Singapore (2012)).
Typically, executed consideration is nlso Lhe acceptance of an offer in a
unilateral contract. In Cm/ill v Cnrbolic Smoke Rn/I Co ( 1893) (see C hapter 7,
paro 7.1 2}, the plainti ff was held l<> have occeptcd the defendant's uniloteral
offer by taking the .smoke baU thrice daily for two weeks. 1his act of
accep1"nce is also co11'ideratio11 for the defendants' promise as the d efendants
bencfilled rrom the s ale or Lhe smoke ball while tlie plaintiff s uJTered a
detriment by using Lhe smoke ball as instructed. 1hus the considerat ion
provided by the plainliff was executed at the Lime the contract was fo1mcd.
8.17
The first and second conditions arc easy <tnough to understand. If both
conditions are saLisfied, the requested act cannot truly be "past considcrotion"
in the sense of an act that is independent or and without reforence to the
pro 1nise (.se<.•. Box 8. L).
Are nil acts or forbearance occurring before the promise invalid con.<iderat ion
for the promise? 'lhis may nol be so. In />ao 011 v Lnu Yiu Lon}( (1980), the
plaintiffs had agreed, at the dcfendonts' request, nol Lo sell the shares of a
company for a period of one year. Subsequenlly, the defend11nts agreed 10
indemnify the plaintiff.< for any loss which they might suffer as a result of
their earlier promise not to sell the sll<u·es. E\'entually. the plaintiffs did suffer
losses and sued the defendants on the indemnity. In defence, the d efendants
argued that their pron1ise to indeJnnify the plaintiffs was not enforceable
third condition, however. functions as a safeguard
ag>1inst enforcing o promise that would not have been enforceable for Dny
o ther reason under contract low (eg, due to the lock of an intent ion to create
legal relations or the presence of vitiating factors, etc). despite the first and
second conditions having been satisfiNI.
Executed consideration is lherefore an act or forbearance unde rcaken ;,,
return for the promisor's offer unlikr pas-t consideration, which involves an
act or forbearance undertaken wit/roll! any reference to the promisor's offer.
8.15
The eourt 1'ejeeted the defendants' argument a nd held th31 the indemnity was
e nforceable. Even though the plaint ilfs' pro mi.le to hold the shares was given
before the defendants' promise to Indemnify, ii was s1UI good consideration
as it satisfied n// 1he conditions below:
NII
Box 8 .1
Pao On's decl$1on
a true exception?
II payment was contemplated by both parlles at the time the •ct was requested,
it would be more accurate to soy that the promisee's act was executed for a
payment to be foxed in the future (ie, the promisce's act is txtcuted and not post
consider.ilion for the promised payment). Indeed, a >trltlly chronological view of Lhe
events should not be taken in deciding if an act Is in fact pasl consideration. Rather,
the more important question Is whether the preced ing act and the subsequent
prornis.e are In substance part and parcel ol one and the 5ome transaction.
3.S
it was nol supported !by consideration: the plaintiff's pl'Omise not to sell the
share$ was given
the inde1nnity and v...J.S therefore past
205
206
Olapttr 8; Consideration and lnttntion to Crtate
Pnnc1plts of S1n9;iport Business Law
Rtlations
eonsidel':ltion 21 law, it 15 1101 necessary to show that it is :ilso ndtq11ntt
CONSIDERATION M UST M OVE FROM THE PROMISEE
8.18
Lhat 11 has a valur comparabl< to the value of th< promise (su S Pcwfi<
Resources Ltd v Tomol11gc11 Holdmgs Ltd (2016) at (17)). The r>llonale
is that contracting
art 13ktn 10 be perfectly ablt to assess th<
merits of their own bargain; and the court's role is to ascertain whether •
bargain has bern made, not wheth<r ii is a good bargain. 11\IS 1s
consistent with the free market philosophy of minimal stale interference
into bargains that arc frccl)' and voluntarily made by ils citizens. llcncc,
if A agrees 10 sell his car 10 R for $20,000 although ii hos a mo1ke1
value of $50,000, B's p'1ymenl of $20,000 is sufficient consideration even
i.f it may not be " fair price for A's car. A more extreme example can be
found in Clrnppell 0- Co Ltd v NcstU Co Ltd (1960) (sec para 8 .8), whm
it was held thJt evln used chocolJte wrJppers which were discarded on
receipt could cons111utc sullicicnt con>idera1ion for the s.ilt of records.
Thus a 110111i11al consid<ritton can b< suffic1en1 cons1d<rallon as long u
portics freely consented 10 ii.
A person can only enforc< a promis< 1f the con•idrr.i1on for the promise
i• furnished by him. Hence, in 1;.•cddlt v Atki111011 (1861), A an d 8, the
respcc!IV< fath<rs of :i married couple, <ntered into a contraet where each
undertook 10 pay a sum of money to C (the lm•b•nd). When C tried to
enforce the contract against the estate of 8 after ll's death, he failed as
the co11sldcrnt lon for the promise was furnished by A and not by him.
Thi> decision cM als<> be explained on a different ground; lhat C was unable
10 enforce the contra.cl because he was not n party (or not privy) 10 the
contract (on pr1vity of contract, sec Chapter 9, para 9.50 onwards).
8. 19
While comiderauon mwt move from the prom1scc, it dM
1101
have to
move to tlie promisor (se< Gulf Petrod1em Pie Lttl v Petrotc< Pit Ltd (2018)
at (171)). Ikner, if A promises to pa)' 8 SSO 1f 8 wa;h<s C's car, th<
cons1d<rallon pro,.1d<d by I\ is '"'hd t\"en though 11 d<>« not confer a direct
benefit on A. th< promisor (see Figure 8.3).
11.21
Sometimts, a grossly inadequate con>1deration may md1cate that th<
promisor did not freely Jnd willingly consent to a bargain but wa. in fact
rncrced or improperly influenced mto such agreement. In such >1tuations,
the cont ract may be set aside on 1he ground of duress or undue influence.
Tue relevant legal principle, nre considered in Chapter 14.
8.22
How then do we identify "volue In the eyes of the law"? Clearly, where
the consideration is given In monetary terms or is readily m<a.<urcd 111
[Proml1U]
(Proml1.Qd
A pro11t1ses 10 p1;1y $50 to 8 if ..
c . , . .. . .
... ...
··•·•• .. 8 wa"1•• C'• cer
(Third
econonlic terms . .such con.)ideration i) suffidtnt in the eyes of the law.
This is so in most commercial contracts, whtre consid<ra11on is furn1>hed
party)
in the form of monetary payment or the provision of goods or str\"IC<S
(with ascertainable market pnct's). \\'here such price lag> c.-innot b.: rud1ly
ascertained. 1d<nllfymg such •,-a(uc" bttomes a much more difficult task.
Table 8.1 provides • list of what moy bt' con<idered sufficient or in<ullicirnt
con>ideration and the
rational<.
Figure 8.3 Conslderallon moving from promls•• to third party
C ONSIDERATION M UST BE SUFFICIENT
Concept of " Sufficiency"
8.20
A> mentioned, considerat ion must be s11ffiricn1 but need not be adcq11ntc.
The 1crm "sulliclent" rr fcrs to "legal volid1ty". thot is, somcihlng havi ng value
111 1/1c C)'CS of 1/ie l11w. Once an •Cl cir forbcarnnce h deemed suffidenl
207
Intangibles and Moral Obligations
8.23
Would natural love and ailcc1ion. ns well as other motive> of n purd)•
scntimen1nl nature be sufliclent consldcra1io11 in rewrn for a pro11mct ' Ilic
::111swer is gencr•lly not. 'lhc rationale is 1hat such motives lack cert .. lnty for
208
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
purposes of enforeemcnL Also, there is the policy eoneem that love and
Table 8.1 Sufllclency of Consideration ProferFed and Rationale
affectio n should not be htld at ranson1 in rNurn for a pron,isr.
PromlsesJActs
proffered as
consideration in
return for a promlso
or nominal value
8.24
Is 11
sufflclont?
./
Intangibles
Ration ale
The law does noc Interfere wilh bargains rreely
entered into by private cit&Z.ens in a free market
economy.
Too unoertain for purposes of cnforoome nt.
Policy not to encoora9e ex1ortionate behaviour
(eg, holding of love and affection at ransom).
Polley not to enc01Jrage extonlonate bilhaviour
Moral ollllgation
(le. holding moral/good behaviour al ransom).
Existing public or
logal duly
Policy not to encourage extortionate behaviour
by public officials or chose under a legal duly. No
benefit to promisor nor detriment to prornlsee.
Going beyond
existing public or
legal duly
No risk of e><l0<1iona1e behaviour by public
ofncials or those under a legal duty. Benefit to
promisor and detriment to promisec exist
Existing contractual
duty owed to chlrd
party
No risk of oxtattionato behaviour by promiseo.
Senem conferred to promlsor allhough promlsee
suffers no delriment
Would the promisee's promise of an ace which he is already under a moral
obligation 10 perform be sullicienc consideration in supporl of a promisor's
promise? In Wl1ire v Bluett ( 1853). a father who ""'s "'earied by his son's
Frequent complainls lhal he had dislributed his assets unfairly among
his children, agreed to rdeas" lhe son from his debl obligation under a
promissory note if he would cease complaining. ll>e com·t held that che
father was noc bound by his promise - ii was his righc lo discribute the
p roperty as he wished and the son had no right to complain. In ceasing his
complaints, the son was only doing whnc he ""'s morally obliged to do and
that was no considera1ion for his
promise. As a matter of policy.
the law would not allow moral obligac ions or good behaviour to be used 10
excort a favourable promise from the other porly.
Forbearance and Compromise
Existing contractual
duty owed to
promisor
?
lnsufficlenl: SN/k v Myrick (tradltlonot view)
Policy not to encourage extortionate behaviour
by contracting par1ies onco a contract is
concluded. No benefit to promlsor nor
to promis&e.
8.25
\.\'here a party has a legal clainl ag;.tinst another, ht> n1ay ngree 10 refrain
(forbear) from e nforcing lhr daim, or to surrC' nder the clai111 in consideration
for a prolllise given by che la1ter. Parties 10 a dispute may consider it lllore
beneficial 10 cnler into a setclement (compromise} of 1heir dispule in such
as costly nncl
litignti on to enforce the clahn can be
avoided. In a compromise. che promisor's agreement nol to pursue a claim
(for/Jeam11cc) is good consideration for the promises given in exchange (see
KLW //o/dings Ltd v Strnitsworld Atlvisory Ltd (2017) al [531).
8.26
Forbearance is sufficient considernlion as long as the forbearing parcy can
cslablish thal he:
Sutttclont: Williams v RoHoy ("practical
bonoflls" onjoyod by promlsor)
Gives offec1 10 commercial roa111y.
falbl.am; Threatens 10 derail the cradluonal role
of the docltlne of oonslderatlon.
o
has reasonable grounds for his claim:
o
honestly believes thal he has a fair chunc.: of success; and
o
has nol concelllcd from the olher party any foct which he knows may
t1ffcct the vtilidicy of the claim
Going beyond
oxlsting contractual
No nsk of extortionate behaviour by contracting
parties. Bonofil to promisor and detriment to
duty
promlsee
(sec C11//is/wr v 8ischoff.<hei111 ( 1870); Li111 fJcng C/1e11g v Lim Ngce Seng
(2016) at [581). Sufficient consideralion lies riot in giving up l1 valid daim.
but rather, in giving up a right to dain1. This npproach n1nkes sense us 1nost
compromises 1·cllllc to tloulitful dnims. the validity of which could 1101 be
ascercained wilho111 a complele trial.
209
210
Chapttr 8. Cc..nsideration and Intention to Crta1t Lt9al Atlations
8.27
However, where a person promises not 10 enforce an i111'1J/id daim and it is
•hown thot he kt1tw such claim to be involid at th< t1mt of his promise, such
forb<arone< 1s no consideration (see \\'i11lt v Sm1to11 ( 1846)). Tut rationale
is thot th< surrender of a groundless claim i< n<oth<r a ben<fit 10 the other
party nor n detrim<nt to the one purporting to give up the claim.
Existing Public
or
Legal
E.xisting Contractual Duty
( 1) Owed to third party
8.31
Duty
8.28
In gencr11l. where A makes a promise 10 B In consideration for B'.s promise
to do somethi ng which B is already legally obliged to do. B's promise is not
good comiderotion. The rationale appears 10 be chat an act obliged b)' law is
neither a benefit to A nor a detriment 10 B. Also. such a rule 1s >aid 10 be
necessary to prevent public officers from ex1or1111g 111one1• for services which
they were legally bound 10 render.
8.29
In Singapore. the rule was more recenll)' opphed in the tragic case of
Estate of Let Rui Feng Do111iniqut Sn"on, tlcctaJtd v ;\'ajib Hanuk
bm M11hammml fa/a/ (2016). A nationol servicemon suffered an acute
allergic reaction and died, upon inhaling fumt• released fro m smoke
grenade, in a Singapore Armed Forces' (SAF) military training exercise.
The de<:en;ed's es1t11e sued the SAF for an alleged brcnch of contraci of
service. ·1he Singapore High Court held (nt l76)- l78J) 1hnt there was no
cnforcenble contract for lack of sufficient considenition - a full-time
naiional m·vimnan's promise lo perform na1ional
was nol sufficient
cons1dcro1ion as it was a promise to perform an eXJ>long dut)' imposed b)'
the (statutory) law.
&.30
Pnnriplts of S1ngaport BusintSs Law
Where the act or conduct in qurstion exurds the requiremrnls of the legal
duty, it ma)' conslitule good consider.uion. In Glasbrook Bras " Gla111orga11
Co1111ty Co1111<1/ ( 1925), the appellant mining compan)' agreed to pay the
respondent police authority to maintain a stationary troop at its m ine to
protect workers returning lo work during a strike. I.acer, the appellant refused
to make the promised pa)'ment and argued that the police authority had
provided no considemtion for the promise as they were merely discharging
their legal duty 10 protect life and property. 11ie House of Lords rejected
this nrgumenl: it held thot the police were only legally o bl iged to provide a
mobile force In the circumstances, and by provid ing a srn1io11ary force, had
gone beyond their legal duty.
211
The performance of, or the promise to perform. an existing contractual
d uty owed to a tloird party 1s sufficienl consideralion for a promise given in
exchange. In Scotso11 v Pegg ( 186 l ), A contracted with X to deliver a cargo of
c:oals to X or his nominee, and X nominated B to accept the goods. B later
conlractcd with A that if A would deliver the same coals to B, II would
unload chem from the •hip at tl rate of fo ur tons per working dny. n did
not honour his promise and A sued for breach of contract. B contended
t hat A had provided no consideration because in deli\'ering the coals. A was
merely performing his existing contractual duty 10 X (the third party). 1he
coun disagreed. When A promised R 10 perform an existing contractual
duty which A owed to X (the third party). such a promise benefits B in
ensuring the delivery of the coal> to B. Note that A would not have •utfcred
a detriment in performing the act as A is alread1•
obhged to
X to so perform. However. it •hould be recalled that the law only requires
either a bet1efi1 conferred or a tletr1111t11t suffer ed to constitute con>1deracion
(2) Owed to the promisor
(a) In return for a promise for more
8.32
What if the nllcgcd consldcrnclon lies in the pcrformancr, or a promise to
perform, an existing co11trnc1ual duty owed 10 the promisor? ·111e traditional
view is that such a promise Is generally not regarded as sufficient considerat ion
- the promi!><>r derh·es no benefit from a
10 which he is already
entitled and the promise< suffers no detriment for doing what he Is alre•d)'
bound to do. In Stilk v Myr1rlc (1809), the captain of a $hip. unable to repl•ce
two aewmen who had de.cried 111 the course of a VO)'llge, promised to da.,de
the wages of the deserters equally among the rest of the cttw 1f they would
work the $hip safely back to London. One of the seamen sued to enforce
lhi! promise aflrr the complet1on of the voyage. The court rejected the claim,
holding that the seamen were .already l>ound under the terms of their existing
conlrncts to complete the voyage lmd hence a subsequent promise to do the
san1c w;.ts: no considcrution fOr the cnptnin'> prornise.
fl.33
Ii has been suggested thM lhe rntionale behind Stilk 11 Mymk's decision is to
discournge seamen from holding their employer 10 ransom by threatening 10
breach their contracts and nggr.-•nting the perils of seafaring. A pa1cy should
212
Chapttr 8.
not be encouraged 10 exton funher concessions from 1he 01her
h» ing already concluded a contract.
8.34
Princ1plts of Singapott Busintss law
and lntt-ntion to C1ta1t Lt9al Rtfations
How'°vcr, any performance which is over and obol."t
pmy afler
contractor and, more tmport3nll)'. the avoida.nfe of liability for de'3y 10 the
owner. under the main contract. Such pr11<tical or factual benefits were held
to be sufficient cons1dera11on for the defendants' promise. The result of thu
decision is that the promise to perform an existing contractual duty owed to
t.hc promisor may eOn>titute
consideration if the pronusor derived
"practical benefits" from the performance. As summarised by Glidewell LI
(at pp 1S- t6):
promisec..s existing
con1ractual duly u ;uf!icient consideration for a prom1>c given in cxchangr.
In N11rtlcy v Po11so11by (1857), the remaining crewmen were also promised
additional
to continue on a voyage wh1ch had bcco1ne too haz.ardous
a0cr the dcserl ion Of 17 (Out of 36) sailors. ' (he prombc wus ndd LO be
binding because in such circumslances, the remaini ng crew membe1'S were
no longer bound to complete the voyage and in agreeing to do so, they
have done more than what was required under their original contractual
undertakings.
8.35
S11/A
1•
( l ) if A hus entered into n cMt racl wilh B to do work for, or to iupply
goods or services to, ll In 1·ctum for payment by B; and
(2) at some stage before A ha> completcl)' performed his obligation> under
the conrrnct, R has reason to doubt whetlier A will, or will be able to,
complete hi< <ide of the bargain; and
Myrick should b<'. contrasted with the controvrrsial cur of Williams v
(3) B thereupon promises A on •dd1tional payment in return for
Roffty Bros 6- Nic/101/s (Co11tra<tors) Ltd (1991). 1he defendants (Roffey Bros)
were building contractors who were •w:irded a contract to refurbish 27 flats.
For that purpose, they engaged the plaintiff (Wilham>) o; sub·contractor to
carry out the cnrpcnt ry work for £20,000. Shortly after commencing work.
the phllnlllT got into tinancial difficulty: the agreed pric< of t.:20,000 wa$ too
low to enable him to carry oul the work snti>foctorily and tlus w•s aggravated
by the ;low progtcss of the work due to his own Inadequate supervision. 1lie
defendants, being awure of t he plaintiff's problems, were concerned that if
the plaint iff did not complete Lhc carpentry wo rk on time. the defendants
would incur t• delay penalty under the main contract. After some negotiation.
the defendant; agreed to pay the plaintiff on addllio11al ;um of CI0,300 at
tht rate of £575 for each flat completed. '!hereafter, the plamtilf resumed
work and >ubstanhally completed the work on eight more units but received
onl)' one further p•rment of £1.SOO from the defcnd•nt<. The plamtiff then
erased work. and brought an action to enfore< the dcfrndant>' promise of
add1uonal p.irm•nt .
8.36
Relying o n Stilk v Myrick, the defendants rt$i;ttd the plaintdf'> claim on
the ground that no consideration was furnished for the defendants' promise
of additional payments - the pl;1i11tiff was already bou1iJ to complete the
carpenlry work under the original sub·contr11ct. 1 lowever, the EngLi>h Courl
i\ppCLll disogreeJ. Clearly. Lhe dcf'endn1tlS had agreed to lhc additional
pn)'ment because they considered it advanlllgeous to do so. 'lhey stood to
enjoy pr11c ltrnl o r fnr t11nl benefits from the plaintatT', pronuse to complete
the "'Ork on t1111e such as avoiding the need to engage another sub·
or
213
A's promise
to perform his contractual obhgatiom on time: and
( 4) as a result of givmg his prom1>e, B obtams in pracuce a benefit, or
obviates a di.benefit; and
(5) B's promise is not given
part of A; then
as n result of economic duress or fraud on the
(6) the benelit to B is c.1pablc ol hcing consideration for B's promis<, •o th•ll
the promise will be legally blndini;.
8 .37
C learly, Wi//imru
11
Roffcy marks a significant departure from the tradltio1rnl
position represented by SIilk v Myrick. 'I he d efendant in Stilk ''
also benefitted from the crew'; pro1111se to sad the vessel back to the de;uncd
port, yet such b<'.ncf\t was not held to be sufficient consideration lht<c
t.wo decision> •r< (despite dc111ah of the 1udges in \Vi/Iiams 11 Rofft)' to the
contrary) clear!)' inconsistrnt wnh each oth<r. At present, the mcons1stency
remains unrcsoh·cd
8.38
The principle in Williams v Rolfcy has been applied 111 many local d«i<ions
(see, eg, Brat/er Dn111rl /0/111 v Commerzba11A AG (2014) at 171) (721:
Be11/e11 Pte Ltd v Autlttlllic fSuildrr Pre Ltd (2018) at 1491- (SOI). In the
first Singapore Court o f Appeal decision Lo apply the principle, Sen-L11111/
Service Inc v Chccmg FooA Cllcc Vi11rc!ll (1994), the defendant cmplO)'Cr
ls;ucd a 30-da)' lcrmim11ion notice lo 1hc plaintiff employee ;rnling that
his se\'crance benefit 111dmled on cnhtmced severance payment of $ 14.340
{which was not nn existing ront 1actual entitlement). Subsequent!)'. alter
Chapter 8: Consideration and Intention to Create legal Refations
serving out the notiee period, the defendants refused l6 pay the enhaneed
severance payment but offered an e.x grntia nllowancc of $4,780 instead. The
plaillliff sued to enforce the enhallced severance payment, arb'lling that the
defendants had in fac t benefitted fro m his services during the l>st month of
his c1n ploy1ncnt which constituted considc ral io n for the proniised payrncnt.
8.39
The Court of Appeal d isagreed. It regarded Williams v Roffey as a "limited
exception" (see f 11 )-I 14]) and held tlrnt in this rnsc, the clcfrndanls derived
no benefit from the plaintiff's work i ll the last rnomh because a compally
would only retrench employees who were no longer essential to its operations
and hence the value of such employee's work in the final month was at best
minimal. This reaso11ing suggests that the concept of "practical benefits"
ought to be u nderstood J111rrowly suck t hat only a rMI and 1ig11ifica111 benefit
(and not just
benefit) would constitute sufficient consideration under the
principle established L11 Williams v Roffi·y (see I Carter, A Phang alld I Poole,
"Reactions to Williams v Roffey" (1995) 8 Jourual ofCon11·11rl /,aw 248).
'"'Y
8.40
8.4 1
Subsequent lower court decisions applied the Wi/lin111s v Roffcy except ion
without mention of the requirement of n "real and significant" practical
bcnelh (sec, eg, the High Court decisions in Sharon Global Sol•llions Pie
Ltd v LG lntcmntio11<1/ (Singapore) Ptc Ltd (200 l) and Broder Dr111itl John
v Co111111c1·zbm1k AG (20 14)). Further, none of the local cases, including
Sea Lmul Service, allc mpted to reconcile \Vi/limns v Roffcy's approach with
t hat in Stilk v Myrick.
Despile re1naining
the 1'\'il/inurs v Roffey exception
dearly
a part of Singapore law. The Singapore Court of Appeal acknowledged
as much in Gay Choo11 Ing v l.0/1 Sze TI Terence Peter (2009) when it
observed (nt I t 181} that a diluted doctrine of consideration represented the
current state of Singapore law. The traditional role played bi• t he doctrine
of consideration in guarding against extort ionate behaviour is dilu1cJ if
prflcl1'cal or .faclufll, os opposed to
legal, benefit is accepted as
consideration in return for a promise for more. However, it cannot be
denied that the Williams " Rc>Jfey approach is better aligned with the
expectations of
in the conuncrcia1 context. who Jnodified or varied
t heir contract terms voluntarily (sec "Implications of Wil/inms v Rojfry•
in Box 8.2). In recognition of this, Singapore
in current times nre
1norc ready to find tine existence of consideration, especially in co1nn1crci:1I
transactions (sec, eg. ,Be,,/c11 above at 1'19]).
215
Principlr:s of Singapore Business law
Box 8.2
MIB
Implicatio ns of Williams v Roffey
(1) Doc trine of Consideration
Theoretically, the captain in Srilk v Myrick could sue the sailors for b reach if they
decided to discontinue the voyage, but the practical value of such action is rninimal
compared to the loss, expense and inconvenience which could result from a delayed
or aba ndoned voyage. Thus the sailors' promise 10 sail the ship to thc destined
port was undoubtedly a factual benefit. But the court appears lo have construed
consideration as a legal rather than a facwot concept.
By accepting "practical benefits/f as .sufficient consideration, the court In Wtlli01ns
v Roffey has shifted the locus of enquhy from "Has the p romisee provided something
that has value in the eyes of tlte low?• to "Old \he p romiser In fact benefit from
tM prOMim'>
This is .i broadeF and more flexible unde1standin9 or the
concept o f consideration which arguably accords with commercial reality - panics
do often agree to pay more fo r the same goods or services (or render more services
tor the same price) where it is beneficial to do so.
Yet, if the slightest benefit could constitute considera\lon, almost all modifica·
Uons of (especially commercial) contracts will be upheld as the promisor would almost
a/way$ benef'it more from the promisee1s continued pedormance lhan a breach or his
contra(tual duty. In practice, this will mean that the requirement for consideration
will cease to have a meaningrut role in defining the kinds of agreements which are
entorceable at law.
(2) Contract Modification and Economic Duress
The inconsistency between these two cases Is also reflective ol the tension between
two legitimate concerns when deciding whether a contract modification is valid and
enlorceable. On the one hand, there is concern that such modificalion might have
resulted from one party's exploitation of the other's weaker bargaining position. In
SUik v Myn'ck, the court dealt with such risks by insisting on the presence of
consideration, the assumption being that where fresh consideration has been furnished,
the variation is less likely the result or duress or coercion. However. a counter-argument
is that a freely agreed modification should be upheld even in the absence of
consideration. Uone party encounters problems in the performance of his c:ontractual
obligations, should he not seek a solution by negolia ling with the other p;'lrty for
a modification of the contract terms? Such self-help m ethods are likely to be more
time and cost etrective than formal dispute resolution processes such as litigation.
lndeed some c;.ommentalors have argued Lhal the concept of consideration Is no
longer necessary to curb such riskl, as this fu nction is more aptly
by the
doctrine or economic duress (see Chapter 14, Box 14.1 ). See R Halson, "Sailors, SubContro.ctors and Consideration• (1990) 106 Low Quorltdy Rtview 183; A Phang,
"Whither Economic Duress? Reflections on Two Rece nt Coses" (1990) 53 Mod•rn
Low Review 107; and A Phang, ·consideration at the Crossroads" (1991) 107 Law
Quarterly Review 21, They argue that Instead of depending on the presence or
absence ol consideration, such modification is valid as long as it con be shown that
both pJrtlcs intended lo be bound by the modiliG<>tion Jnd that no improper pressure
has been applied on the promiser in the bargainin g process. This reasoning is
persuasive in that, If accepted, it will bring the law closer to commercial reality.
1
216
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
Thus. it is reasonable to ask whether the prineiple in Willinms t1Roffey should
apply to contract variations resulting in a promise to accept less. In other
words, why should the prnctiml benefit of receiving a partial paymem not be
accepted as good consideration for the promise to forgive the whole debt?
In /le Select111ove Ltd ( l 995), the English C-Ourt of Appeal acknowledged lhc
force of 1his argument but did not extend the principle in Williams 11 Roffey
to situations involving partial payment of debts as that would in effect be
overruling the House of Lords dtcision in Fonkes " Beer, which the Court of
Appeal had no power to do. Tile courl thus correctly adhered to the doctrine
of precedent but unfortunately left the inconsistency between Williams 11
Roffey and Fonkcs v Beer unresolved. In princi pie, it is difficult 10 sec why lhc
law should differentiate between these two situations as the prac1ical benefits
which a promisor may derive from the receipt of part payment is no less real
than the benefits of receiving a promised performance (>Cc I Carter, A Phang
and J Poole, "Reactions 10 Williams v Ro tfey'' (1995) 8 /011r1111/ of Contract
l-aw 248). The law in Singapore on lhis point nlso remains unresolved.
(b) In return for a promise for ten
8.42
A owes ll $1,000. A pays $700 lo 8, which B accepls as complete discharge
of '"" debt. Can B bter sue A for the unpaid balance of $300? ln 01her
words, can A hold B to his promise to accept $700 as complete discharge
of Xs debl? In this s ituation. A does nol rely on Jfs pro n1ise to seek
additional payment (unlike the case in Stilk v My,.irk) but to avoid part of
his liability.
8.43
The general rule laid down in Pi1111cls cnse ( 1602) is that the paymeni of a
lesser sun1 is not a con1pJcte sat isfaction of the debt. 1bc rationale is that a
promisor is not boun d by his promise to forego 1he unpaid porlion of the
debt as the promisee h as 11ot furnished any consideratioll for the promise in 1naking part pay1n cnt, the pro111isee has done no 1n ore, and ini fact, less
than what he is contractually bound to do. Thus, sud1 contract modifications
are not enforceable in the absence of consideration. and in the example
above, B may insist on Lhe foll repayment <>f A's debt despite his promise to
the contrary. The rule in Pinnels case has been allirmed and oppli cd by the
House of Lords (now kno1vn os the Supreme Cour1) in Fonkcs 11 Be.er (JS84).
8.44
8.45
The rule in P/1111els cnsc does no1 apply where the debtor has provided
so111etlri11g rli.fferc11t to the creditor', at the crecliror's request 111Us lf A owed
B $1,000 and B agreed to lrcat the debt as discharged in full if A washes
B1s
or n1ake parlial parn1enl of $500 anti washes B's c-ar, d1e rule in
Pi1111cls C{l$C would no\ apply
A W<l\llcl have f11rnishcd ton$ideratiQ11
for B's promise to forgive the debt or forgo !he balance. Alternatively, parlial
repJyn'lent of t1 debt at a diffe rent place o r on an earlier date would suffice
as fresh consideration for the credilor's pron1isc.
W HEN CONSIDERATION IS
8.46
REQUIRED: THE EXCEPTIONS
An exception to the legal require1nent of consideration are contracL'i by
dc<el, th;it is, formal documents in writing which have been signed by the
par1 ies before a witness or witnesses. scale<! and delivered. A grntui1ous
promise (that is. u promise given for nothing in re1urn) made by deed may
be enforced (see, cg. Dc11elop111e11t Bank of
Lt1/ v Yt•ap Teik Lco11g
( l988); Ho11g /,cong Fi11n11cc Ltd v Tny Kroiv Nco ( 199 1)). The rationale for
e xcn1pting such contracts front Lhe require1nent of consideration is that
having gone through such elaborate steps. the pnrty making the gift would
be well aware of what he is doing and would seriously intend 10 be legally
bound to make the gift.
The rule in Pbu1c/'s cnse haS" been criticised on the grou nd that it runs
counter to the
expectat ions of the business community. As Lord
Blackbul'll observed io Fonkcs v Beer (nt p 622):
All men of bus.iness. whet her merchants or tradesmen, do every day
recognise and :ict on the ground that prompt payment of a part of their
demand may be more beneficial to them than to insist on 1heir rights
and enforce payment of the whole. Even where the debtor is. perfectly
solvent, and sure to pay "1 last, this often is so. Where the credit of 1he
debtor is doubtful it must be more so.
Nor
Contract by Deed
Promissory Estoppel
(1) Meaning and origin
8.47
An important exception to the rule in Pilrnc/s case. the equitable docirine
o f pro111i.ssory estoppel prevents a person fron1 goh1g bnck on his pron1i.se
cve11 though the promise is 110/ supported l>y considcrntion. 111c origin of
th is doe1ri11e is often traced to Denning I's (11s he then was) oliitcr remarks
217
218
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
in Ceutrnl Lomlou Properly Trust Lid v High Tree.1 House Lid (1947). In
8.50
that case, a 99-ycar kase was granted by the plaintiffs to the dtfrndants
in 1937 for a block of llats at a rent of £2,500 per year. ln /am•ary 1940.
the plaintiffs agreed to halve the rent as the defendants were encountering
difficully securing
for 1hc llats owing LO the '" ar condi1.ions then
prevailing. TI1e defen<lants thereafter paid the reduced rent. Ho""ever. the
flats were again full)' let b)' earl)' 1945 and the plaintiff< sought to restore
the rent to £2,500 from mid- 1945. Denning J held that the plaintiffs were
entitled to do so as the reduced rent was intended to apply only while the
adver<e conditions per<isted. More importantly, Denning I obsen,ed that if
the plaintiffs had claimed for the run rent for the period prior lo 194 s. they
would have been est1>pped from doing so as they could not go back on a
promiie that was intended to be binding and which
in fact re lied upon
by the defendants as it would have been inequitable for them do so under
the circumstances.
1
1
(2) Ele ments of promissory estoppe l
8.48
To successfully
the doctrine, all of the following
J1"1ust
be
present:
(b) Rei/once
o
a dear and unequivoC!\I promise by the prornisor 1101 to insist upon his
orig:in:.ll contractlHll rightsi
o
reliance
o
such that it is incquitoble for the promisor to go back on his promise:
and
o
the doctrine is in\1oked as a shield, not a sword.
8.51
Each of these
The second require1nent is that the pron1isee must hnve acted in reliance on
the pron1ise. Generally. such reliance is evidenced by the pron1isce's rhnnge
of position on the foith of the promise, that is. b)' doing or omilt'ing to do
something which he would otherwise not have done or omi1ted to do.
by the prorniscc;
8.52
ns well as the effects of pronlis.s-ory estoppiel, v.•ill be
considered in turn.
(a) Clear and unequivocal promise
8.49
Silence or mere inaction would not generally eonstitute a elear promise as
i.t lacks certainty. Thus, a mere failure to enforce a contractual obligation
does not amount to a promise 10 abandon such a right of' enforcement.
However, a promise does not have 10 be express but can be Implied bi•
words or conduct. In H11g/1cs v MetropolitnJJ Railwny Compnny (1877).
n landlord gave his tenant six months' notice to repair the premises but
thereafter. the parties commenced negotiations for the sale of the lease to
t he landlord. TI1e tenant had indicated that he would not effect the repairs
'A hilsl ncgothttions continued. And in foct, in thi: course of negotiations, the
l.andlord raised the Slate or disrepair Of the premises OS a reason for Objecting
LO the tem1nt's asking price for the lease. Soon afl<r. the negotiations broke
down and the landlord sought lo forfeit the lease as the tenant had nol
carried out the repairs o n the expiry of the original six 1nont hs' notice. It
was held that the landlord could not do so as it could reasonably be inferred
fronl his conduct in entering into negotiations with the tenant that the
notice period \.\1ould not run while the negotiations continued, and would
onl)' continue to run nfter the negotiations ended.
Is ii sufficient for the promisee to merely alter his course of action in
reliance on the promise made. or must he als.o have suffered some detriment
0 1· 1fi$11dvnritnge '" 't result? Some cases suggest that detrimental rclin11rc is
necessary. The rationale is that only where Lhe promisec has suffered such
detriment would it be inequitable for the promisor to go back on his word
(sec P""" 8.61-62).
The pro 1nisor must have 111ade a clenr nnd uueqllivocal pro,nise which is
intended to affect the future conduct or the. parties' relationship. Obviously.
1he clearer the promise, the more like!)' It is that the promisee will oct in
reliance Qll hand render it inequitable ror the pron1isor to retract his pro1nisc.
Whether a promise is sufficiemly clear and certain i.< judged objclfivcly, that
is, it is sufficient If a promisee could IW5cmnbly have been so Induced in the
circu1n.stances,
219
8.53
The English position docs not require detrimental reliance. In W j Alan &
Co Ltd v Iii Nnsr Export n11d Import Co (1972), Lord Denning rejected the
that a
adduce evidence of detrilnent in order to
invoke promiS<ory estoppel: all he needed to demonstrate was that he had,
in reliance on the promise. acted differently from what he otherwise would
hnve done. Similar observations were mnde in Socictc Ttnlo-Bclgc pour le
220
Principlts of Singapore BusintSs law
Chapttr 8: Conside-ration and lnttnhon to C1ea1e Lt9al Rtlations
Commmt et /'111dustrit SA v Palm n11d \'tgetn/1/t Oils (Mnlaysin) Sd11 Bird,
8.56
u>cd to illustrate th< difference
on the l•ndlord's 1n1phed promise not
to msist on repairs to the lea>cd premises du nng the period of negotiatrons
for the sale of 1he lease, the tenant did not effect the repairs wi1hin 1he
notice period. Was there detrimental rtlian<c? There wa> no "detriment"
1n the narrow sense of the word - lhe prom1see-tenant did not sufftr any
detriment m relying on the promisc. Instead, the renant enjo).. d the benefit
of not being put to the trouble and expense of effecting repairs, which might
be 1-endered unnecessary (ond wasted) h•d the negotiations resulted In •
•ucccssful s.-.le of the lease. Neverlheless, ··detriment" in the bro•d s<nsc
cxi>ted - th< tenant's rtlionc< on the implied promise to susptnd thr notice
period for repairs had resulted 1n a change of the tenant's positron: the
1/ie Post Clrastr (1982) by Goff J (35 he then was) (11 p 27):
To cstabli$h such inequity, ii is
1101
10
show de1 rtn1en1: indeed,
the reprcsentcc 111ay have benefited from the rcprc$enlation, :rnd yet il
may be inequilabl<. at least withour reasonable nouce, for lhe rcprcsentor
to enforce his legal nghts. Take the facts of (tht H1glr Trus can) ... the
rrpresentotion was by a lessor to the effect that he would be content to
accept a reduced rent. Jn such a case, although the lessee has benefited
from the reduction in rent. it may well be inequitable for 1he lessor
to 1mht on his kgal right to the unpaid rent, because the lessee has
conduc1cd has affairs on the basis that he would only have to p•)' rent at
t.ennnl·promisee would suffer dmilnent, ihnt is, the prospect of eviction for
the lower ra1e.
8.54
8.55
lhe facts of H11gl1es v Metropo/i11111 Railway Compn11y (see p3r3 8.50) may be
Jn Singapore. however, detrimental rtlianct is required. The lhgh Court
danficd thc i<sue in lnm Ori K111 David v Dtutsclrt Bnirk /\G (20 I 0) and its
po"tton was implicitly endorsed by tht Court of Appcal (see I.am C/1i Kin
Dnvid v Dc11tsclie 8a11k /\G (2011)), t•S noted in Orrlwrd Ce11t111/ Ptr Ltd ••
Cupid /cwels Ptc /.td (FOl'cvcr fcwds Pte Ltd. non p11rty) (20 13) at 149], and
To11g St11k Kn11 v Joya S111/111r af/ Jnynram (2016) •t (40]-1411.
foiling to effect repairs within the original notice period,
permitted to go back on his word.
8.57
that conflicting views on the rcquircrncnt of cletrhncnt arose because son\c
v.•here 1he promistt
Thus conccl\·ed. the requirement of dclnment would I><! <atrsfied whethtr
It took the form of detl'iment in the "narrow" or "broad" sense. More
$ignificantly, the finding of det1·iment provided the justification for
establishing the last elemen1 of the docrrme
that it would be inequitable
to allow the promisor to r<>Jc from hi• proniise (sec p.ira 8.61 ).
""\S
and Import Co ( 1972)),
221
Steven Chong JC (as he then was) dhtilkd (al 157)) an overarching principle
thnt ran through 1he cases in which the doctrine of promissory estoppcl hnd
The O''erorchmg prmcaple ... as that the doctrine ha• consasrently been
held to apply in circumstunces when it was inequitable either in the
narrow or b10:1der ;ensc or "detriment" for the promisor to resile fro111
his proml<e and to enforce his strict legal rights.
courts used the word "detriment" in • narrow sense while others used it in
wa• put to some trouble in acting (or relying) upon the promi>or'.. promise
and thus nlrenrly sulfcrcd a dctnment prior to any indkntion that the
promisor wished to re;llc from his promise. For example. the proml<ee had
to incur upmditurc of money (s«. cg. \okoga..-11 E11ginur111g As.a Pie Ltd
v Tra11s1d £11gmcer111i: Prr ud (2009)) or time, or
placed Ill .. position
of disodvantagc such 11s mcurring legal obligation' (see, cg,
1• Blake
( 1900)). 111e brand sense was used in situations wherr the promiscc did not
suffer •ny immediate trouble or di»dvantagc in acting (or relying) on the
prom1wr\ promrsc: in,tead. tht prom1see might ha\'C en1oycd a benefit from
doing so. "Detriment" or disad"antag• to the promisec would only orise if
the promisor was p(•r1111lled to go back on hi; pron11sc (sec. eg, J/11gl1cs v
Mctmpolltnn Railway ,Co111pa11y ( 1877) and IV/ /\Inn Co /,td v F./ Nnsr f;xport
landlord w;u
been opplied:
Jn I.am Cir/ Kin (2010), the Smgopore High Court noted (at [SS) (56))
a broad un!>e. The t1arrow sen\t w-aJ; used in
if the
8.58
On appeal, the Court of Appeal implidtl)• appro"ed of lhe "over.rcl11ng
principle" 1dentiCred by the 1llgh Court (sec [38J) although they reached •
J1ffcrent conclu5lon when applying the pnndplc to lhe facts of lhc ca>c
8.59
'lhe brief fact• of I.nm Clri Km are a. follows: Dcut..che Rank promhed
to extend ll "•18-hour grace period" lo Lant Chi Kin ("1.t11u"), their private
banking client, to respond to a "margm rnJl" In the course o( complex
foreign exchange trades. 1h< "grace ptriod", a more generous tame aUow•nce
than that pcrmilled under the original contract term go,·erning lhe parties.
222
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
was valuable givm the volatility of foreign exehange rates and the financial
impact they would have on Lam's investments. 1he Court of Appeal found
(at (381) that various actions taken by Lam resuhed in a chartge of his
position: Lam provided addit ional business to the bank by obtaining from
them a credit line of USD200 mill ion to carry on foreign exchange trades,
placed large cash deposits with the bank as collateral for the credit line
and entered into risky leveraged foreign exchange trades to the tune of
1nulliple 1nillions of several currcnc-ics, son1ething Lam would not hnvC'
done if not for the promised grace f>eriod. On this basis. the Court of Appeal
concluded that Lam relied on the bank's promise and thereby suffered
sufficient dctrin1ent to n1akc it intquitablt to pcrn1it the bank to rcsile fro1n
thei.r promise.
8.60
In an interesting turn, the Court of Appt·al went on, obiltff, to introduce a
uovc/ approach to establish pl'Omissory estoppel. The Court held th at in the
absence of detrirnental reliance, Lani could rely on an alternative. "br"nder
principle" to establish promissory cstoppcl, that is, on the basis that the
promisor-bartk had obtained an ndvnutage from the promisce-Lam!s reliance
o n the promisor-bank;'s promise. Emphasising the particular rele\•ance of the
"broader principle" to the fac ts of Lam Chi Ki11, Chan Sek Keong, CJ (as he
then was) stated, at (401:
We are of the view that this principle is particularly releva nt in the
con1cxt of private: banking where if bunks and finu.ncial intern1cdiaries
cngngtd in the
of wealth n1anage1ncnt cannot be trustrd with
their words, they should not allowed to be in this business. The courts
should not allow a bank to ch1im that "my word is not my bond': and
should be suflicicntly astute to li nd inequity, and where it is possible to
do so with in legal lim its. to hold the promisor to his word rill a case,
such as the present, where the respondent has obtained an :idvantage
fro1n his pro1nise al the cxpc.·nse o( Lhc pro1nisce.
Applied to the facts, the court fo und that the bank's promise oi a groce period
enabled them to anract and induce Loni to use their wealth management
services. Since the bank h<td benefined considerably as a result of Lani's
re/inure on their pro1nisc, Lhe court concludrd that il was inet/f4itnblc for
the bank to resile from their promise. Here, one may pause to note that
ahhough there was sound basis ior the applicat ion oi the "novel approach"
on the facts of Lll111 Clri Kin, the Ji111ils of the approach re1nain unclear (see
Box 8.3).
223
Box 8.3
lmpllcatlo ns of the " novel opproaclr"
Various observations on the "novel approach" are pertinent. First, the focus of the
brooder principle is on the a11alnment o r an odvancoge {or benefit) by the promisor as
a result ol the promlsee's reliance on the promise - and whether this circumstance
makes it Inequitable for the promisor to resile from his prom ise. This is In stark
contrast to the traditional focus on whether the promlsee hod suffered o dttrimtnl as
a resull of his reliance on the promise. Traditionally, promissory estoppel is used to
protect the promisee from dis.advantage in relying on the promlsor's promise and
not to prevent the promlsor's advantage as a result of such reliance.
the "broader approach" rah.es a number of interesting queslions:
Whal sort. of "advantage" will trigger the operation of promissory Ntoppel? Will
lt re.suit in greater availability of the doctrine constrained only by the need to ltnk
lhe promisor's enjoyment or advantage to the resulting inequity if the promisor
is to 90 bock 0 11 his promiie? It may be rair to say that a promisor would enjoy
an advantage or benefit in not Insisting on his origin al contractual rights in most,
if not .a11, volunl.ary contract modification scenarios. lnde<'d. academics have com·
mcnted, inter olia, that the Co<1rt of Appeal's novel approach is likely to further
dilute the role played by the doctrine o r consideration (see, eg, Voo Tiong Min, "The
Future of Promissory Estoppel in Singapore Law" Fiftlr Yong Pung How Prolenorship
of Low Lecture, Singapore Management University, 16 May 201 2).
(c) l11equltable to go back on promise
8.61
Consistent with promissory cstoppcl bdng an equitable doctrine, an essential
element is that it must be i11cquiinbk for the promisor to go back on his
"1A1ord. Inequity or injustice is a broad concept and overlaps substantinlly
with 1hc concept of "detrimental reliance" (see paras 8.52- 8.59. and the
"overarching principle" in /,nm Chi Ki11 above). Where a promisor makes a
p ro1n ise upon which the pron1isee relics and suffers detrin1ent ::is a result,
these facts would render it inequitable t<> allow the promisor to recede on
his word. Notably, in 711c Post Clwser (see para 8.53) ohhough the court
held th3l detrin1ent wris not necessary, it nonetheless held that it \Vas not
i.ncquitabk for the pl'Omisor to recede on his promise because the lap'e of
two days between the time of the promisee's reliance and the time at which
the pron1isor retracted his pro1nise \v:IS too short to have caused any prejudice
LO the promisee. 'lhus, even if one accepts as correct the l!nglish position
that detriment is unnecessary. detriment remains oo Important factor in the
general a.sscss1nent of whether it is just and equitable to pennit the pro1nisor
to go back on his word.
224
Chapter 8: Consideration and Intention to Create legal Refations
8.62
Ulrimately. the
Principlr:s of Singapore Business law
of inequity must be determi11ed by taking into aeeount
to restore payment of the full re11t for the future and in the H11glies ease
(see para 8.50), where the tenant's obligation to repair is not lost but is
resurrected upon the
of notice and more tim e. What const ilutes
s ufficient notice in each case would depend on its particular facts. An
express notice is not necc-Ssary and prtcise tlmne need not be specified for it
to take effect. Generali)'. it would suffice if the promisor has by his conduct
111ade dear his intention to withdraw his concession and the promis:ee is
given a rcasonabJc tin1e to make the necessary adjustn1cnt.s thereafter.
all lire releva111 circwmtnnces. Any factor lhat could tip the balance o ne way
or 1he other must be considered. D&C Builders v Rees ( 1966) is a useful
illustration. The defendant o wed 1he plaintiffs £.482 but offered, through
his wife, to pay £300 in full sett.lemcnt of the account, Slating in dfect that
the plaint iffs would get nothing if they did not accept the lesser sum. 111e
plaintiffs were then on
verge of bankruptcy :ind lhe defendant's: wife '"''as
well aware of that foci. J'or lack of a real Optio n, the plaintiffs accepted lhc
payment but subsequently brought an ac1ion to recover tlie ha.l ance of the
debt. Lord Denning held that it wos not inequitable for the plaintiff.< to l"esile
fro m their promise as the defondant had improperly procured the plaintiffs'
agreement by taking advantage of their weak financial position.
8.66
It should be noted, however, that in the Higlr Trees case, the court was
prcp"rcd o nly to allow a restoratio n of the landlo rd's righL1 to future rental
at the full rate. Lord Denning was of the view that the landlords ,,·ould not
have been able to recover the full rent for
wnr ye ors.
indicates th31
the payment obligations faUing within the d<rration of the suspension were
actual!)' extinguished. This is inconsistent witl1 the view that promissory
esto ppel is suspensory in nature.
8.67
Perhaps a bener view ls to de1ermine the effects of the doc1rine by reference
to lhe nature. intent and circun1st-anc:es of die pron1ise ntade. Jn exceptional
circurnstanccs, an obligation n1ay be ext inguished because the reliance
placed on the promisor's assurance makes it impossible for the promisee to
perform his o riginal obligation or highly inequitable for him to do so (see
E McKendrick, "Contract: In General': in A S Burrows (ed), £11glisli Private
Ll1w (Oxford: OUP. Jrd ed. 201 3, at para 8 .54 ).
8 .68
In cases such :.ts JUgh 1'rces, which in\lolved penodic paynJeuts, a distinction
(d) Shield, not sword
8.63
8.64
'I he principle of pro m issory estoppel is often metaphorically described as one
which '1Cts only as 11 sl1ield lmt not 11s n sword. 111is means that the- principle
rnay only be invoked to defend or resist a clain1. but it cannot be used to create
a new cause of action where non<· existed before. In Combe v C-0mbe ( 1951)
(see para S. 10), the phtintiff could not enforce her ex-husband's promise as
she had not fornished consideration for the promise and thus no contract
existed between them. in the firs t place. 1he court also rejected her further
argument that Lhe defendant 1•as cstopped from breaking his promise since
to do otherwise wouOd runount to creating a contractual relation between
the1n when none existed bcrort .
O ne may q uestion why the doctrine of promissory estoppel is Limited 10
operate only as a shield but not ns a swo rd. Lf tlie rationale is 10 protect
reasonable reliance placed o n a promise. why should sud1 protect ion
be allowed o nly by way of a defence but not as a cause of act ion! Some
other jurisdictions such as Aust.mlia have allowed the doctrine to be used
as a sword. Thus far, Singapore has not adopted this bold ;1pproach (see
Mansource Interior· Pte Ltd v CSG Group Ptc ltd (2017) al [62J-(63J).
(3) Effect of promissory estoppel: to suspend or extinguish?
8.65
A number of cases suggest that promissory estoppel merely snspends
1he en(orcement o( an obligat ion such that it may be rcvive.d by the
pro1ni.sor upon giving due notice to the pro1nisee. lllis is observed in the
I ligh Trees case (sec p"ra 8.17), where the court held tl1a1 it 1vns possible
225
may have to be drawr\ between the paymcms which accrued before the
notice and those nccruing thereafter. Where i i is not possible lo recover the
Forn1er pay1nents, the right to these pay1nents is therefore extinguished, but
the gerteral right to fu ture payments is metcly suspended and may be revived
upon reasonable nolice. TI1e suspensory effect is jus1ifiable by the fact that
the pro rni.ses were given in response to acute and ten1porary circu1n.stanccs
a nd thlls it is likely that the said prnmises were o rtly intended to be binding
while the extenuating circumstances lasted. In the case of o ne-off payments.
where :t creditor accepts a lesser
in sait.isfoction of a lnrger debt, the
effect of promissory cstoppel should ultimately depend on whether 1he
creditor's intention (objectively determined) is to (orgive the entire debt or
rnercly to allow the debtor more time to pay.
226
Chapttr 8.
and lntt-ntion to C1ta1t Lt9al Rtfations
Princ1plts of Singapott Busintss law
INTENTION TO (REATE LEGAL RELATIONS
8.69
Even where an agreement is >uppor1ed by con>idrration, 11 as not
enforceable unless 1hc parties intended the agreement 10 be legally banding.
Whether lhc parties to an agreement did intend to creale legally binding
reh11ions is a question 10 be determined by 1hcfn<1s of Lhe case on an o/1jectivt
basis. The part ies are said 10 have 1he ir11e111ion 10 create legal relations if an
object ive view or the relevant facLS
lh:H such an intenlion exist.s1
even if Ol1c of lhc P'trtics should as.scr1 otherwise. In Nor.vest /Joltli11gs P11•
lrrl (l11 liquldatlo11) v Newport Mi11i11g Ltd (20 10). 1hc Singoporc High Court
reiterated 1his principle and its r:1tionale, and h1ghllgh1ed an exception to the
objwivr approach. lklinda Ang J obsrrved (at 1341) thu.:
with domestic 3greemems bec>use the pirties do not 115U3lly inlend such
agreements 10 have ltgal co11scquences and that 10 do so would unduly
overload the iudicaal system
8.72
In Jones v Pmlavn/1011 (1969), 3 mother'> agreement to maintain her adult
daughter on the condition that the Inner studied to become an advOC<lte
wns nlso held not to be enforce.1ble ns it was merely an informal family
a rrangement, where each party depended on the 01hds good fo1th for the
performance of 1hc promises.
8.73
I lowever, the prc>umpllon agnin•t contractual intent C'ln be rebuned by
clear evidence of the p>nies' intention 10 create legal obligatiOllS. Jn Mtmtr
v Mtrritt ( 1970), a hu1bat1d who had desmtd hi$
agmd 10 pa)' htr
a monthly maintenance o( £40 and lo lransf<r the house to her when sht
had fully repaid tht ou1>tandmg mortgage, as
as othtr rxpcn<b rebtcd
to the house. At the waft> ansasttnce, the husband wrott the agrccmtnl
on a piece of paper and 5igntd •gaiml it. 1he court held that an these
circumstances, the pr<>ump11011 against cr<atUlg legal relauons did not apply
and the agreement was binding Unlike the facl$ of Balfour v Balfour, where
the couple were living in amity Jl the time of the agreement, the couple in
Merritt v Merrill was es1r:inged when the a.greemem was made. As •uch,
1hey were clearly nm king n .crlous bargain ;and no1 merely relying on 1he
other's affection nnd good faith for the fulfilment of the promise>.
m finding an an1cn1ion 10 cntrr into legal re'311ons. ... the law is
predominantly concemcd
1he obiectl\'e in1rnt1ons o( a pany, and 001
his •ubiectave or actual intention.... Spcafically, th• obJeclJ•·e approach
de1em11ne> a party$ intentions by looking at all of hi> words and conduct
directed tow:ards hi5 counterpany from 1he pcrspcctl\·c o( a reasonable
person ver>ed an business. The obvious rallonale for the objective
approach Is to eno.ble parties 10 deal in reliance w11h each others· manifest
intentions. It follows from this rationale 1hat there i< an exception to
the objective approach where a party's achrnl Intention differs from his
apparent intention, and this is nctu11//y known 10 his countcrpnrty.
8.70
Generally. lhc agreements are analysed under 1wo brood categories:
a.grccrncnl) made in social and do1nc&tk contcxh 3nJ 3greemrnts arising in
bu1111css and commercial con1ex1s.
SOCIAL ANO D OMESTIC ACREEMENTS
8.71
For
or domestic arrangements. there a> a prt>11111p1to11 that the panic.
do 1101 intend the agreement to be legally bindrng. In Balfour v Balfour
(1919), the defendant husband who was lc•ving for an oversea>
proml<ed 10 p•y hi> wife. the plain1iff, a monthly oum or £30 until she joined
him overse"s. 1he defondanl later failed to honour his promi<e and 1he
plaintiff sued for breach of contract. ' Jhe cou n held that the agreement was
motivated m11lnly by the parties' nn1urnl love and affection for each 01hcr
and not the intcnllon to create legal obligations, nnd thus the plaintiff's claim
failed. Aikin LJ was nho of the virw lhat the court• ;hould not interfere
227
8.74
As the issue of conh'adunl lnient is • que.<tion of fact, all 1he sa1m11mdl11g
facts of a case ore rclcvonl in considcnng w!icther lhc pre>11mpt1on against
contractual intent has been displaced II is not possible 10 list all 1he relevant
1ha1 1wo factors are o( pamcular significance.
factors bu1 ca.<e.< ha.-e
"Jhe first is th• urtamty of the l<rm• of the ag«emrnt. lhr more crnam
the terms, the more h""I)' 1ha1 the parties would ho•·• carefully considered
the content and effect< of tht •greemtnt. Conversely, vague and 1mprrc1<•
terms are likely to be con•truc<i a> evidence of lock of contractuol 1n1tnl.
The second factor i< the '"'"''' r.:/umcc placed on the agreement:
of
such reliance will tend to s11ggc$t thnt 1he parties intended the agreement to
be binding. Both factors were present in 1\·territt v Merritt; the C'OUl'l found
that the agreement was wri11c11 wilh sullicienl certainty and thlll the wife hnd
nc1ed in reliance on the hu<bnnd', promises ht settling the mortgage lnoa1 and
other relaled cxprn)ei..
228
Chapter 8: Consideration and Intention to Create legal Refations
Principlr:s of Singapore Business law
8.78
BUSINESS ANO (OMMrnCIAl
8 .75
parent c-0n1pany issued a comt'Orl lcuer which contained the Statement that
Where business and co111n1ercial :.tgreen1ent.." are concerned, the presun1pt ion
"It is our policy to ensure that the business of [our subsidiary) is at all times
is that the parties intend to create legally enforceable obligat ions. In
Foo /o"g /,ong De1111is v Ang Yee Um Uiw1wcc (2011\), the Singapore High
Court summarised (a t [SI]) the principles for establish ing the existence of
in a position to n1eet its liabilities to you under the above arrangen1ent.s."
Upon examining the wording of the letter. the English Court of Appeal held
that the statement did not amount to a co1irractual promise. l n contrast. the
Australfan Supreme Court upheld a letter of comfort con1aining a similarly
\.\'Orded state1nent as having contractual force in Bnnqlw Hrus.sels La111berl SA
" A1mrnlia11 Na1io11nl /11d11s1rics Ltrl ( 1989). In the Australian case, Rogers
q disapproved of 1he English court's approach in attempting to resolve a
contractual intent in cornn1ercial arrangcn1ents:
(a) As a starling point1 in matters of con11ncrce.. there is :.t rebuttable
presun1pt ion thal the parties intend to c:reatc legal relations in nny
con11nercial nrrange1nent that they propose . ..
(b) 1l1e onus on a pa.rty who asseris that o commercial
10 have legal etfcc t is a heavy one ...
co1nn1erciaJ dispute with excessive e1nphasis on the ttxl of a docu1nenL
Is not
Rogers CJ also took the "icw that generally conunercial agreements which
from hard bargaining should be givci1 significant weight and not be
(c) Where th('
pcrforn1 the lern1s of the con1n1ercial arra ngcn1ent,
it is likdy that they intend to enter into legal relations pursu:int to the
corn1nercial arrange1nent . ..
lightly reduced to a "merely honourable engagement" except in the dearest
of circu1nstanccs.
have no inten1ion to create legal relalions. \<\'here this is done in dear tcnns.
Significantly. the Singapore High C-0urt has declined to give legal c!Tect LO
a letter of comfort in the case of
a11d Slta11glwi Ba11k Corporation
Vd v furo11g £11gi11ccri11g Ud (2000). Though the court acknowledged that
the presumption is effect ively rebutted. In Rose & Fm11k Co v J R Cro111p1011
(1923). the parties included the following clause (co1nmonly
known as an "honou r clause") in their agreemen1:
ha"e legal effect. il nonetheless held that the presumption was displaced b)•
two important considerations. First, the evidence showed that the parties did
8.79
8.76
In Klei11wort Be11so11 Ltd v Maillysin Mining Corp B/1rl ( 1989), the defendant
h is no1 uncommon for parties to expressly state in their agreement that they
the letter of cornfort should. as a c;on11nerc-ial document, be presun1cd lo
c,• Bros Ltrl
not seriously place an}' reliance on the COJn(ort lcller; and secondly) the text
1l1is arrangement is not entered Into as a legal or form;tl agreement, and
shall not be subject to legal jurisdiction in the Liw Courts but is only
a definilc expression of and record of the purpose and intentcon of the
parties concerned to which they eacl1 honourably pledge themselves.
of the letter was 110/ sufficiently certain to S\lpport the creation of binding
oblig1tl lons. This decision suggests lh;1t our cou rls may be more inclined
townrds
rrstriclivc approach in interpreting letters of co1nfort, such that
documents of this nature are unlikely to be given contractual force except
where there is irrefutable evidence of such i1n ention.
The court hel<l that the arrange1nent was not enforceable as a con tract as it
was clear fron1 die honour clause that they did not intend the ag·ree1nent to
have any legal consequence.
CONCLUSION
8.77
The is.sue of contractual inlcntion frequently arises in relation lo a leiter
of comfort. Typically; such letters 11re issued by a p11rcnt company or a
substantial shareholder to encourage a financial lnstilution 10 exte-nd a loan
facility to Its subsidh•ry or investee company. ·n1e p1·ecise legal elfect of a
comfort letter depends on the Intention of the parties as evidenc-cd by the
surrounding circumstances and the text of the letter.
8.80
8.81
The reader should realise by now that l he need for the concept of
consideration has been much questioned. Although the concept has not been
abandoned. its role in contract law has been considerably whittled down.
A tradition:.tl ari;u1nenl in fovour of consideration is that it is oood evidence
o f the contrncting parties' intention to create legal relations. A countera rgu1ncnt to this is that where other circurnstanlial evidence shows such
229
230
Chapttr 8: Consideration and lnttntton to C1talt legal Rtlations
intenrion, rhere ii no re3son why agreements should be denied legal
validi1y simply for lack of
Indeed, ii is of1en the ne.-d 10 give
effect 10 rhe parrie• inrenrion in such >ituatlons that prompted iudges to
"invent" consideration. In Clrwu Kin Keong v Dig1/a11dmall.com Pit Ltd
(2004), it was ob;ervcd by the Singapore lligh Court (at (139)), in obiter,
that:
111e modern approach 111 contnct law requires very bttle to find the
exis-1encc of considerat1on. lndttd. in difficult casH, the courts in sev-eraJ
common law Jurisdiction> have gone to extraordinary lengths to conjure
up considerauon. (See for example the approach lll \Vi/Iiams v Roffey
Bras 6' Ntcltolls (Co11trnctor) Ud .• .).
The High Court went on to suggest (at
!I 391) that!
Indeed, the time may have come for rhe common law to shed 1he
pretence of >earthing for con>1deration to uphold commercial contracts.
The marrow of contracrual relationship> should be the parties' intention
to create " legal r.,fotionshlp.
8.82
Perhaps the fate of the doctrine of consideration lies more tellingly in the
obitcr comments of the Singapore Collt't of Appeal in Gay Cltoo11 lllg v
lolt Sw 'J'i '/Crcnu l'cta (20-09). Andrew Phang JA observed (at I 1171) that
the doctrine of consi,lcration has survived much crit icism and remains an
esrablishcd parr of Sit>g'1pore and the common law, even though legal reform
is needed to iron out the thcorclkal incoherence and practical difficulties
in application.
(at I 118)), thot having a rnnge of legal options
available to determine which contractual promises to enforce - a diluted
doc1rinc of considcr;ation and alternative doctrines such as: proinissory
estoppel, economic dure.s. undue 111fluence and unconscronability - is the
most practical WO)' to achieve a fair and just resuh, as no d0<trine is itself
free of difficulties.
231
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Principlr:s of Singaport: Business law
Chapter 9
Capacity and Privity of Contract
9.1 - 9.4
9.5
9.6-9.13
9. 14
9. 15- 9.23
9.24
9.25- 9.27
9.28-9.30
9.31
9.32- 9.33
9.34- 9.38
9.39
Introduction
Incapacity
Minors
Binding Contracts
( L) Beneficial contract for necess:iries
(a) Loans for neccss>lries
(2) Beneficia l contract of emplO)'fnent, apprenticeship or cduca1 ion
and analogous con Iracts
Voidable Co111racts
Rat ified Contrncw.
Remedies Aga inst a (Pro tected) Minor
( l) Scc1ion 3(1) Minors' Con1rac1s Act
(2) Section 2 Minors' Coniracts ACI
9.40-9.44
Mental lnca1>acity
9.45- 9"19
Corpor:itions
9.50- 9.54
Privity of Contract and Third Parlies
9.55
9.56- 9.57
9.58- 9.63
9.64
Third Party Enforocmcnl of Benefits under Contract:
Techniques te> Get Around the Privily Rule
Stalutory Techniques
(I) Conlracts ( Rights of 'll\ird Pnrties) Ac! (Cap 53B, 2002 Rev l!d)
(•) Scope of tipplicat io n
(h) Right.< of third party lo enforce conlractual 1enn
(c) Rcmt'dies uvailllblc to a third party
(d) Varialion and rescission of coniract
(e) O the r provisions
(2) O ther s1atu1es
9.65
9.66- 9.67
9.68
9.69- 9.78
9.79
9.80- 9.82
9.83
9.84
9.85
9.86
9.87
9.88
9.89
9.90- 9.92
Some Com mon Law Techniques
( I ) Action by promisee on behalf of third party
(2) Collatcn1I contracts
(3) Hi malaya clause
(4) Assignnlent
(5) Tort of negligence
(6) Agency
(7) Law of trusts
Imposing Burdens on Third Parties:
Technique< to Get Around the Prh'ily Rule
Sub-bailment Conlracls
Land Law
Unlawful lnlerf•rence with C<>ntractual
Conclusion
234
Pnnciplts of Singapott Business Law
Ch•pter 9: C.pacity and Privily of Cowact
INCAPACITY
INTAODUCTION
9.1
!laving considcrc<f the lcg;tl ingredient; ncces.ari• for the forrnotion or a
o( who has the right 10 sue
contract, we go on to exanune 1he
and enforce prom1Ses under the contrnct. and who is liable to be sued. In
this chapter. we will be looking al two >cparntc and distinct ;i1uations. The
first tn\'olves an md1Y1dual or corporauon who 1s a parly to the comraC1 but
whom the law reg•rds as lading the leg•I capacity to contract. The second
concerns an individual or corporallon who is 1101 a party to the con1r.1ct.
9.2
Generall)'. portoes to a contract art tnlilled to sue and, con\'ersely. are liable
to be sued in respect or pron11Se> made under the contrnct. How<>·er, the law
10 proletl rerwn 1111/1v1d11nls, namely
lxlow 1he age or 13 and
the mentally mcapacitatcd, whom it reguds as b<ing too
to fully
appreciate what they jre commiuing themsclvc; to in a contract. To do this,
the law limits their capacity 10 enter Into contracts. Where co1porarions are
concerned, lhe law .scek.!1 to prottc1 the o"rners' investment 1n a corporation
by placing limits on the corporation's capacity 10 contract. Such limits
generally result in the /11rl/vlrl11al 0 1 the r<11pormlo11 not bei ng liable under
contracts entered into. Rxccptions to 1he general rule exist to 3n1eliorate
any unfairnc;s 1hn1 1m1y be caused 10 partk> dealing in good faith with the
lndlv/dual 01 corpor111io11.
9.3
N mentioned, only parties 10 a con1roc1 ure ent itled to sue and are liable 10
be sued under a con1roct. 11
then ihnt an Individual or corporation
who is not a party or, in lcg11I parlnncr. not privy 10 a con1rac1 cannot
;uc or be ;ucd under that conlrnct. Such nn individual or corporation is
also known as • "third
llowever. •lrict adherence lo the "privily or
contract" rulr may r<>uh In unfoirne;$ to tho third party <specially where a
term or terms of the con1rnc1 con!Cr a l>cncfil upon the third party. Iienc<,
various technique• have been u11l1>cd 10 get around the privily rule.
9.4
In this chapter. we ohnll first comider the dTec1 of incapacity upon an
indJ\'1dual or corporal Ion's abihl) 10 sue or be ><ted under a contraCI 10 wl11ch
it is a party We shall then go on 10 cons1d<r the ab1hl)• or an individual
or corporation (le. the third party) 10 sue or be ourd under a contract 10
which tt 1101 a party
wme or the common techniques employed 10 gel
around 1he pnvity rule.
235
9.5
In a free market sy.icm. the law provid<s certainty to commercial dealings
when contr>cts are upheld. Nevertheless. this ideal has 10 be counterbalanced ngainst the need lo protect the inexperienced and/or \'Ulnerable
;11di1>/1iunls who may nOI be able to protect thcir own intere$tS in the
commem•I arena. ln\'C>tOrs in a corporauon also deser"e proiection agatnsl
their mveslmtnl being applied tow•rds unintended purposes by th• persons
running the corporation. But what or the interest or the party "ho dealt
fairly w11h the md1v1dual or the corporahon? A fine balancing act 1s required
th.se equalli• valid conccrru. As will be obsen-.d, howe\'er, lhe law
on incapacity, c.prcially 1ha1 concerning minors, is not entirely satisfactory
and 1s
by many wnbook wmm as requ1nng refom1.
MINORS
9.6
Mi nors comprise one or the groups consider<d \'Ulnerable and requinng
leg.ii protection ogain;I lmpro\'idcnt contracts. The premise is thal they lack
experience in commerchll mailer. and nio1uri1y or judgment. 'The general
common law approach is 10 deem minors as lacking the legal capacity to
Clller lnlO COnl1'3Cl> SO lhal young people below the age or majority arc
protected. Some cxt11nplcs or countries 1ha1 adopt this approach are 1he UK.
I long Kong and Malaysia.
9.7
In Lhe UK. I long Kong and M;1laysill. 1he age of majority is 18 years (sec
l UK Family Law Re Corm Act l 969; s 2 read with s 4 Malaysian Age or
MJjority Act 197 1: and s 2 r<ad with» 3 & 4 Hong Kong Age or MJjority
(Related 1>rovisions) Ordmancc 1990). Jn the past, Singapore Jdopted a
similar appro:ich
that is. cx1cnding protection 10 all who arc below
the •ge of majomy. However. the age or majority in Singapore is 21 (see
811114 uf /111/i" v Rni Bt1/1111/ur Si11gll (1994)). 1his had thr curiou1 result or
young people In Singapore aged 18 10 20 being regarded as •till rcqmnng
lrgal protcclion in contracting while their counterparts in the UK. Hong
Kong and Malap1a werr not. Whether or not Singaporr law actually
rcllcc1ed reality on the ground (then) was never verified by any rmpmcal
.iudy. Regudlcs\, the "anomaly" m Singapore law was r<moved in 2009.
Leg;&! amendment> 1hot look effect on I March 2009 duo11pk1I the age of
conlractu•I capacl!y 1n Singapore from the age of maJOrily. In other words,
the age from whteh contr3ctual capacity is conferred is no longer the age
236
Principlr:s of Singaport: Business law
Chapter 9: Capacity and Pfivity of CorHraet
of majority. Instead. s 35( 1) Civil Law Act (Cap 43 Rev Ed 1999) ("CLA'')
provides that the age of contractual capacity is 18 years for most contracts.
Legal protection is no longer extended to 111/ minors in Singapore; only
minors below 18 years of ngc are protected.
9.8
9.9
9.12
Notftbly. the 2009 leg.11 amendments only lowtred the age of contractual
capacity but left unchanged the general law pl'rtaining to n1inors' contracts.
9.10
9.11
UJl
his minority as a "defenee"
is, where the minor has yet to perform his obligations under the contract.
Hence, where Lhe minor ha.< already performed (executed) his oblig31ions,
he cannot plead his minority in order to recover any money paid or goods
d elivered unless there has been a total failure of consideration on the part
o f the counterparty. In Steinberg v Scala (Leeds) Ud ( 1923). a minor applied
for and was alloucd shares in a company. She made partial payment for the
shares but thereafter decided to terminate the contract on the ground of her
minority and to claim tJ,. return of the partial payment. The court rejected
her claim. Although she was allowed to tcrm•natc the contract and therefore
free herself from liability to pay the balance of the price of the shares. she
was not allowed to clain1 back the amount p3id as there was no total failure
of consideration. She received her shares and thus got son1clhing in return
for her money.
TI1ere remain some contracts that 11/1 minors continue to lack legal capacity
to enter into. 11,cse exceptions are stipulated in s 35(4)(a) to (d) CL/\. For
nil minors continue to lac.:k capacity LO enter into contrac ts dealing
with interests in land (except for contracts for leases of land of three years
or less) and for tJ,e sale or use, as collnteral, of a minor's beneficial interest
under a lrusl (sec s 35(4)(a) to (c) CLA).
The sole impecus behind the amendments was to encourage and facilitate
lo, the
entrepreneurship among the young in Singapore. J\s already
existing law on 111inors' contracts is not wholly .satisfactory. As such, du· lhnited
scope of the 2009 amendments have prompted some criticism for, illter 11/ia.
failing to consider holiscic reform (see too W 1.. ''Use of Age for Conferment
of Capacity" (20 t0) Si11gapore }ourmil of legal Swdics al pp 328-351).
A (felevant) minor is only allowed to set
LO a claim by the countcrparty while h.is obligation is s1iU cxccutory, that
9.13
Evt•n if a contract c.annot be enforcrd against a 1ninor, the minor is
11everthelcss entitled to enforce the contract against the counterparty, that
i.s, the counlerparty is always bound under the contract. Obviously. this
rnay result in unfairnc.ss towards the counte>rparty and certain rules ha\•C
sonu> minors (those u nder 18 years) as opposed to 1ninors as n whole, nu1y
evolved through case law and statute lo provide the counterparty with
1•e1nedies against the ininor (see discussion under t.he heading "Ren1edics
Against a (Protected) Minor" al para 9.32 01'wards). Certain exceptions 10
the general rule on the incapacity of minors have also evolved not onl)• lo
prevent unfairness to the counterpart)' but also to shield minors from being
prejudiced by, ironically, the very protection accorded LO them. Traders
may be deterred from contracting wtth mi1'ors given their lack of legal
capacity but minors still have need for e:;sentials such as food. clothing and
employment. ' Ihese exceptions arc discussed under the three headings below:
rnisc the "defence of
o
binding contracts
What is the significance of a lack of contrnctunl capacity? 'lhe general n 1le
is thnt conlracls entered into by one who lacks capacity are not emforceablc
against him, This means that the other contracting party (''the counterparty")
will not be able to s ue the party lacking capacity for breach o ( controct
and obtain remedies for breach (eg, claims for the p1·ice of goods or
services provided. damages or equitable remedies). Thus, generally, a
o
voidable contracts
o
ratified contracts
Singapore law on mi nors' contract.• generally tracks the English common
law. '1lnts in the sccti.ons to follow, English case autho1ilies are highlighted
in the discussion of the sc.ope of lt1w on minors' contracts. liowcvcr. the
reader is cautioned that as the UK still confers confractual capacity from lhc
age of majority, English cases inevitably refer to parties lac.king lei;ol copacity
as minors (as a whole) and to their raising the defence of millotil)'· TI1e
reader should bear in mind 1he crucial difference that, in Singapore. only
1ninor in Singapore is not Hable under
:1
cont ract enlcred into while he is
Binding Contracts
9.14
'lhe law recognises some contracts 10 be fully binding and enforceable
against a (protected) minor. TI1e types of contract that fall within this
uJ\der 18 years of age.
237
238
Principlts of Singapore BusintSs law
Chap1" 9: Capacity and Prlvity of Coniracl
articles of mere Jwcury c3nnot be neeessari"- 31Jhough luxurious artieles of
uhlity may sometimes be (see Chapple " Coof'<r (18-14) at p 258).
category are benefici31 contnm for neceMaries, beneficial contr3cts of
tmploymtnl, apptenticc;hip and cducauon, and contncti analogou; to the
laner category.
9.18
O bviously. what may be considered suitable or fit to 1he condition in life <1f
o minor would change with the limes anJ the old Engli>h cases may now be
of limited use as a guide. It 1s also not euy to dIStingu1sh arhclcs of mere
luxury from luxunous articles of utility. llns led to a suggestion th•I the
real quest ion i> "whether it wa> reasonable f<>r the minor. howc,·er rich. to
be supplied wllh artides of the kind in question" {see Edwin Peel, Trc1tcl:
7/ic Law ofC0111ra<1 (141h ed. 2015) at para 12 005).
9.19
1\> ment1ontd, the supplic1 h3> 1he unenviablt 1ask of proving bor/1 that 1he
goods or services supplied 11re cnpable of being "necrn:trics" nt law mid thnt
the minor has JCtual need of them before he can succe»fully claim against
the minor. If the minor i> already adequately supplied. then he will not
liable for the price C\'<n though the supphtr did not know this (see Bamts
cl- Co v Toye (188•t)). In Nnsl1 v lm111111 (1908), a Savile Row tailor failed in
his dnint agoins1 a minor (ll Cambridge unuergruduntc lmd 1he son of (\I\
architect of good position) for payment of eleven fancy wai•tcoots supplied
by him. The minor's father had given
evidence that the mmor was
olrrady adequately supplied with clothes M the tune of <ale and delivery.
l he burden plnced on 1he supplier 10 prnv.e 1he minor's oc111al need ha<
been crilidscd as being unduly harsh as •UCh facts would usually not be
within the supplier's knowledge (see Edwm Peel, Treitel 1/tt l.Aw of Conrrnct
(1) Beneficial contracts for necessaries
9.15
The r•llOnalc behind the binding effect of a contract for nece»aries i> soid
to be that unless the nunor is bound, traders will not g1\'e the minor credit
for necessaries. Neccssnrics can co111prise either goods supplied or services
rendered. I lowe\'l':r, the question whclh<r the goods or services contracted
for arc necessaries i< no1 • srraightforw>rd one. Rather. it is a que<iion of law
and
T,,.o considcrauons are per1inent: firs1. are the goods or
in quc•tlon capable e>f being "necessaries" 111 lnw? Second. doc> the minor,
;,, ji1ct. hove actual need for the goods or serviccs! 111e supplier bears the
burden of proving b1nl1 in the affirmati\'e. To be binding, the 1erm• of the
contuC1 for
must also, on the wholr, benefit the minor
9.16
9.17
In relation to good<. s 3(3) UK Sale of Goods Act (applicable in Si ngapore
by virtue of the Application of E11gli>h l.nw Acl (Cap 7 A. l 994 Rev Ed) and
reprinted locaUy as Cap 393, 1999 Rev Ed) ("SGA") dt6ncs nrcc,.;1ries to
be ·goods suitable to 1hc condilion m hfc of the mmor ... concemC'd and
1his is a
to his Jctual requirements at the lime of the salt nnd
stallltory codification of the common (cnse) h1w dcfi11i1ion. It should be
noted thal s 3( I ) SGA provides 1hat "the cnpactt)' to buy and sell i< regulated
by the general law concerning capacity to contract and to transfer and
11111>. all
to a minor an , 3 SCA arc 10 be
acquire
undcrMood as referring to a n1inor hclow 18 yenrs of nge.
Al common Jaw. item> capable of being necessaries (at law) ar< "such
arttdc< as ar< fit to numtam the particular J><'fSOn m 1hc state, Matton and
degree ... in which he i>" (ser l'rtcN v Fleming ( 1840) at p 46) while, as
noted obove. s 3(3) SG A makes reference to "goods .-drnble to the condition
in life of the mmor". These dcfi111tton• indicate that necessaries t ncomp:iss
more than just the basic necessitic. of life and that the social >talus of the
mmor 1s rcltvanl 111 us determination. Thus what mai• be ncces\aric. for a
"prince" may nol be necessaries for rt "pauper''. To illustra1e, E11ghsh cases
have hdd the following ilcms, >upplicd tu minors from well-lo do families,
to be cap•ble of being n<ee>sJrie> .11 law: ring>. ptn> and a w"ch·chain
(Pcrcrs v Fltmmg) and •servants uniform (Ha11ds v S/1111ty (1800)). Howe,·er.
2l9
(14th ed. 2015) at para 12 006).
9.20
Even if the supplier succeeds In proving thnt the contract with the minor is
for necessnric1, the contract only binds th< minor if 1t contain< term\ 1ha1.
ovcroll, benefit th< minor. ·1hus. in fo,..tttl 1• Sm.rl111Nt (1914), it w•S held
that • contract for the Jure of a car for the transport of a nunor's luggage
did nol bind 1he minor even 1hough it w(ls n conlracl fo1 nccessnry services.
It contained a harsh lcnn making the minor liable for danrnge 10 1he car "in
that is. regardlcs. of whether he was at fault lhe court held that
any
the c:ontnct, as a '''holr. wa_.. not to the nunor's benefit.
9.21
t\n unsettled question is whether a cont ract for nccem1rics thal remains
cxecutory on 1he part of the counterparty bi nds the minor. 'These are u1es
where the counterporty has yet to J><'rform ht< obliS"11on> under the contract,
for example. he has not dchvcrcd
or rendered services contracted for.
240
Chapter 9: Capacity and Pfivity of CorHraet
Principles of Singapore Business law
For necess3ry goods. s 3(2) SGA prnvides that '"IW)here 1ieeessaries are
with him dufing Lile tour. Tiie rourt held that the eontraet was for neeessafy
sold fmd deli1,ered LO a minor ... he must pay a reasonable price for them"
!emphasis added]. As the minor's obligation to pay arises upon both sale
and delivery. the nlinor is thus only liable when the contract for necessaries
is executed (for other arguments for and against this conclusion, refor LO
Box9. I).
services in that it \Vas a c.onlract ror teaching ;and instruction, and one whid1
bound the minor even though it was still P'artly executory on che part of
the professional when the minor repudiated the contract. Hence. the minor's
repudiation was wrongful and he wa.< held liable for damages for breach
of contrnct. As an aside, it is pertinent to note that contracts for education
that equip a n1inor \\tith necessary skills to earn a livelihood are considered
cOnlraclS for ncccssarie.s. However, g iven the overlap, lhey are often also
discussed under the category of contracts of employment, apprenticeship or
education and contracts anillogous thereto (see paras 9.25 to 9.27).
Box 9.1
Should executory contracts for necessaries bind the minor?
Where the supplier has yet to p<?rform his obligations under a contract for necessaries,
the question is whether the minor is bound so that he cannot repudiate the contract
on the ground of his minority. A plain reading of s 3(2) SCA appears to suggest that
an txecutory contract for necessary goods would not bind a minor. Proponents of
this view argue that a minor Is liable for the price not because he has contracted
("contractual basis") but because he has been supplied ("restitulionary basis"). That
is why a mh1or is only liable to pay a reasonable price instead ol the contracted price
for necessary goods (see s 3(2) SCA).
However, there is conflicting dicta on the basis of a minor's liability (ree Nafh v
Inmon where Moulton LJ (at p 8) held that a minor's liablllty rests upon resLltution
as he Is incapable of making a contract, while Buckley LJ (at p 12) opined that a
minor hod the capacity to make a contract for necessaries). Arguments in favour
9.23
price. 1bis suggests that the 1ninor nlay not have lo pay the price agre-cd
Ln the contract. Tilere is no statutory equivalelll in relation to necessary
services and case la\v would govern, which appears to require pay1nen1 of a
reasonable price (see Cirapple v Cooper ( 1844 )).
(a) Loans for necessaries
9.24
of a restitutionary basis have also been challenged. Barring very young children,
a minor is capable of giving true consent and is thus '3pable or contracting. And
payment of a reasonable price does not conclusively point to a restitutionary basis:
U'e law's interference with the terms of a transaction doe. not necessarily >trip it of
Its contractual nature (sec Edwin Peel, Treite/; Tile Law of Co111roct (14th ed, 201 S) at
para 12--008).
Further, although rnon textbook writers agree that the different approaches
to contract5 for necessary goods (le, executory contracts arc not binding) ond Lo
contracts for necessary services (le, executory contracts are binding) are hard to
reconcile, different solution> have been >uggested to rationalise the law (see Edwin
Peel, Tre/tfl: The Lc:rw of Controct (14th ed, 2015) at para 12-008 and A Phang,
Cheshire, Filaat and Fumulon's Law al Contract (2nd ed, 1998) at p 7S2). The Issue
remains unsettled.
9.22
For necessary services) the posit.ion is governed by co1nn1on law nnd il has
been held that executory contracts for services bittd the minor. at least where
for educntlo11 are concerned, In Rol1crts v Gmy (1913). a minor had
conlractcd lo lcorn the occupolion of a profrssional billiards player from o
famous professional by going with him on a world tour and playing billiards
241
W here indeed the contrnct is one for necessaries, in relation 10 necessary
goods. s 3(2) SGA provides that the mino·r need only pay a reasonable
Generally. a contract to lend money to a minor for the purchase of necessaries
i.i. unenforceable against the rninor at con11non law {sec Darby v Bouclier
( 1694)). Tite racionale is probably that a loan can be easily mi>applied to
other purposes unlike on actunl suppl)' of necessaries. In equity, the lender
can recover such parl of the loan as is actually used for Lhe purchase of
necessaries (see M11rlow v Pitfielrl ( 1719)).
(2) Beneficial contract of employment, apprenticeship or eduGation and
analogous contracts
9.25
Cont racts of en1ploy1ncnt.
or education are binding on :\
minor as they provide him a means of cam ing his livelihood. Again, such
contracts only bind a minor if the terms are. on balance, beneficial to the
minor. 'lhus in Cleme11ts v L & NW Ry (1894), a minor was held bound by
his con11·nc1 of employment in which he agreed to relinquish his statutory
t•ights to personal injury benefits and to join his employer'.< own insurance
!oichenle. The insurnnct- sd1e1ne cc>nferred the minor so1n e rights which
were more advantageous than his statutory rights and some rights which were
less so. Nevertheless. taken as " whole. the
found that the insurance
242
Chap1er 9: C.paci!y and
Privily of Con1m1
scheme was s1ill 10 his benefit Ru1 not e-·ery co111r:1c1 thal IS benelifial 10 a
rmnor binds hrm. for example. a minor'> trading contract> do nol bind him
no matter how beneficial 1hey mar be. In Cowtrrr v Nield (1912), a minor
troding in hay and str>w failed to deli,·er a consignment of hay to a buyer
despilc having
been paid. The buyer.. claim 10 recover the price
paid foiled.
9.26
9.27
Princ1plts of Singapott Busintss law
Voidable Contracts
9.28
"J hls principle of beneficial contrnc1s of cmploymcnl, apprc111iccship or
cducn1io11 hns been extended 10 analogous con1r:icts. Uxamplcs of 1hese
include :1 con1rac1 10 grant a publisher exclusive right> 10 publish a minor's
memoir. (sec C/111pli11 v Leslie Frcwin (P11blishrrs) Ltd ( 1966)), a con1ract
bclween a professional boxer (who is a mrnor) and 1hc British Boxjng Board
of Con1rol 1n wluch he agreed lo abide bi• 1hc rules of 1he Board he could
not cam hi> hvmg as a boxer 01hcrwise (>cc Doylt v Whitt C.ty Stadi11m
Lui (1935)), and a contract where a group of musrci•n>. the members of
which wrrt mmors, appointed a company 10 be thtrr managrr and agent
(>ee Dtm1111rk Pro1/ur11om Ltd v Boscobel Pr0</11clloru Ltd (1967)).
A d<c1s1on thnt provides an inleresting contrast to the Demmrrk Productioru
case is Proform Sports Management Ltd v Pronrt1vc Sports Mmwgemrlll
ltd (2007), 111 Praform Sports Mmragcmt•nt, an issue arose whether a
rcp1·csc111at ion contract for a soccer pla)'er. entered into when the pi aye<
wns u Jnl nor. was a cont rac.l an:.ilogous to o contrncl of "c1nployn1ent,
apprc111ice>hip or education" ru1d thus binding on the minor. The case
in\"olved n fomous English soccer player, Wa)'ne Rooney, who entered into
a rcpr<•<ntJlion contract when he wa> aged IS with Proform Sporl5
Marugcrnent Ltd ("the company"). Under the co11tr•ct, the cornpan)'
would act as Roon•y's extcuti\"e agent and manage Roon<"y's career as a
professional footboller, provide advice ond negotialt on Roonr1·'s bthalf the
ttrln> Of, ollrr n/111, aity C0Dlr3Ct Of lr.lnsftr from one football dub lO
another. 'lhe court held (at (40)) 1ha1 the repres<ntat1on conlr>et was not a
contract •nnlogous lo a conlract for employment, opprent1crsh1p or education
on the ground that the company did not deal with 111nllcrs essential 10
Rooney's 1r.1inrng or livelihood, unlike music group 111am1grrs who "organise
rnllltcr> csscnlil1I tu the very bu;iness or I he mu,ical
'J he company
did 11ot provide Roo11 cy training to hone his skills ond c11nblc him to earn a
livrng tls a pro(e<sional foo1ballcr or lO begin 10 do so. Rooney w"s already
receiving •uch lrainin.g under his con1rac1 wilh the Everton Foolball Club.
243
t\l common law, under thl\ excepllon to the general rule, a contract is b1ndmg
and enforceable against a muror unlei.s the minor 3\'0ids or repudi>1es thr
contract during his minoruy or within a r.-asonable 1i111e after he anains
the age of majority. In Singapore, where contractual cipacny does not take
reference from 1hc age of majority but is conferred from age 18
this exception will mean thar the contrac1 is binding 011 the minor under
18 unless he avoids ii while below 18 or docs so within a reaso11nblc 1i111c
of 1urning ill. For contrac1s where contract uni capacity still takes reference
from !he age or mnjorily (ie, conlract• li;tcd in s 35(4) CLA: sec para 9.8),
minors can avoid the contracts whrle below 21 or wilhin a reasonable time
of turning 21, if thr cont racls fall within this common law rxcrplion. 1 he
t)'peS of contract within this cal<gory arr:
o
contracts to
o
contr>cts to subscribe for or purchase shares in a company:
or purch•s• land:
o
partnership agreem<nl>: ond
o
marriage settlements.
It is unclear if these arc 1he only conlrncts tilat are capable of foiling within
this categorr but the usual rationale glvtn for the effect of this category of
on n rninor is thlH they concern interest in property of a pcr1n.,nenl
11nture and invol·vc recurring
As such, n tninor who retains the
interesl should, rn fairness, be held liable for rhe obligations. However,
the staied rationale hDs been criliersed as vague and doe$ not provide a
sali<factory explanation for 1he inclusion of certain types comract< wrlhm
lhe category or 1he exclu>1on of other> (sec Edwin Peel, 'f rmd: '1/rr I aw of
Contract (14lh ed, 2015) al p•ra 12 025). For example, rt 1s unclear what u
mranl by "permanent" and rt ha; been hdd thal a hire
contract for
a car. though in,·olving recurren1 obhgauon< on the part of the minor 10 pay
instalment>, dot• nol fall within thu do» of contracts (>« Mrrrarrttlr Umon
Gunrarrtu Corp Ltd v Ila/I (I 937)). A> such, lhe need for •uch o clo» of
conlracts has been questioned ($« Edwin Pt>el, Treitd: 1/Jr Law of Co11trtut
(14th ed, 20 15) al para 12- 026).
or
9.29
As memloned, in Slng:ipo1c, unlc.s 1hc minor repudiole> whilst he i; below
t he relevnnt age. he will have to do so wilhin n reasonable lime of onainlng
Lha1 age. What will be conside1eJ a rca>onablc 1ime would depend 011 1hc
l;icts of the particular cose In tlm regard, an English cas< has held that
244
Chapter 9: Capacity and Pfivity of CorHraet
Principles of Singapore Business law
taking nearly five year5 after attaining the age of majority to re-pudiate a
marriage settlement was not reasonable even though for most of that time
the minor concerned did not know of his right to repudiate (see Edwards v
Carter ( 1893 )).
9.30
an English Aet introduced in 1987. It is applieable in Singapore by virtue of
the Application of English Law Act 1993.
9.33
Upon repudiation, th e minor ceases to be bound by future obligat ions
under the contract. Ho\.vever, the low is unclear as to whethe r ht?. remains
bound by outstanding oblignt ions 1ha1 have accrued prior 10 repudiation.
f or ttxan1ple, a minor. upon repudiating a lease of :i Oat. wHI no longer be
bound LO pay fllture rent but whM about the rent for the past momhs that
has yet to be paid? Tbere are conflicting dicln and views by textbook writers
on this question although the ge11cral view seems to be tht11 a minor remains
bound by obligations nhat have a1•isen prior m his repudiation of the contract
(sec S141tOIJ nrul Sl1n11>101J 011 Co11tr11cts (Sth ed) lll p 220 and Salmond and
Wi nfield, Principle.< of the /,nw of Contract; at p 461 cited by A Phang,
Clicsliire, Fifoot t111d
LtllV
Co11trt1ct (2nd ed, 1998) at p 759,
footnote I06. For an a lternat ivc view. see A Phang, "s above, al p 759, which
cites in supporl o( Lhe opposing view Salmond and Willhuns. Principles
of tire Lnw of Co1Jtmcts at p 300 in footnote 106). Finnlly, as mentioned in
those remedies. For the purposes of this chapter then, the focus will be on
the remedies under the MCA with a brief mention of the remedies under
common law and equity mainly for purposes of comparison.
(1) Section 3(1) Minors' Contracts Act
9 .34
par:i 9.12, Ihe 1ninor cannot recover 1nonies paid o r goods delivered to the
(h) the contract is unenforceable against the defendant (or he repudiates
it) because he was a Jninor when the contract was nuldc.
Ratified Contracts
the coul'l may, if it is just and equitable to do so, require the defendant
to transfer to the plaintiff any property acquired by the defendant under
the contract, or any property re presenting it.
At con1n1on 1:.iw, a contract that does not fall under the previous two
exceptions to the general rule imy still be binding und enfo1·ceable- against a
1ninor if 1he 1ninor ratifies 1he contract upon attaining the age of nH1jority. In
I he
Singapore context, this exception will operate sucl1 that a contra.et ratified
when a n1inor turns l 8
be enforcenble :ind binding on that rninor.
Remedies Against a (Protected) Minor
9.32
Section 3(1) MCA provides:
Where (a) a person (the plainliJ1) h.is lnfter the commencement of the Act]
entered into a contract with another (the defendant): and
other party prior to tJ1e repudiation unless there has been a total failure of
consideration (sec Steinberg v Scaln (tecds) Ltd ( 1923)).
9.3 1
A thorough discussio n of the ren1edies under co1n1non law and equity
ls beyond Lhe scope of this chapter. It is sufficient 10 note Lha1 these
remedies are very much restricted on account of the courts' fear of
d iluting the protection given to the n1inor. 1l1ey are lhus insignific:int in
cornpllrison to the remedy under the MCA which generally improves a
s upplier's access Lo restitution of bene6ts 1r;insferred under a contract that is
unenforceable against the minor. Hence, even though the MCA specifically
preserves the counterparty's rights against the minor al common law and
equity (see s 3(2) MCA), it is unljkely that tJ1e cou11tcrpan y wiU resort to
Unless n contrac1 with a n1inor falls within the except io ns discussed above,
the countcrpt1rl)' will not be able to enforce the contract against the minor.
This is the case even if the counterparty did not know that he was dealing
wilh a (protected) minor. 1hus. lo protect a supplier who has dealt foirly
wilh the minor. n number of remedies exist at common law and equity, and
under the Minors' Contracts Act (Cap 389, 1994 Rev Ed) ('.MCA"). 'lhis is
245
9.35
'TI1e section expressly provides for a remedy for the cou111erparty 10 the
contract in ci rcunHtances whe re the contra.e t does not bind a 1n inor by
v irtue of his n1inorily. 'Ihis would include all situat io ns where the contract
is not for necessaries und '"here the minor has not ratified. and where
t he contract foils within the class of "voidable contracts" that has been
r.epudiut<d by the minor. Examples of where the countcrparty may be
oblc 10 obtain a remedy: the tailor in N11sl1 v l111nim could probably claim
bnck the eleven fancy waistcoats from
I be
Cambridge undergrndunre:
a nd in Stei11berg v Scn/n, if the shares hnd been allotted witlro11t mry
p11ymcrrt l11iv/11g bec11 111nd• Y"t when the m inor chose 10 repudiate the
246
Chap1er 9:
C.paci!y
and Privily of Con1m1
contract, thrn thf company would probably bf obit to cbim
Princ1plts of Singapott Busintss law
1hp
801 9.2
;ham allotted.
9 .36
9.37
Under • 3( I ) MCA. 1he nature of the remedy is rcs11111tionary. that 1s, the
court may order lhc m111or 10 restore propeny acqu11ed under 1hc contract
or •any properly representing it" 10 the supplier. 'Ihb is in contras! to the
po>ilion at common lnw and equity. Al common law, a claim for damages
1nU)' be nu\de against n1inor, except for vcr)' )'Oung childtcn, in tort But
the IOrllous remedy will be withheld if 10 gnnl ii would be tant.. mount 10
enforcing Lhe conlrnct against the minor. In R I.I's/le Ltd v Sheil/ (1914). a
minor lied about his age to obtain a loan. 1 he courl held 1ha1 1he minor
connol be rned for • breach of contract as such • con1rac1 i$ une.,forceablc
•gaan>I a manor. Nei!her could 1he nunor be sued an 1he 1or1 o( decei1
because the <!Teel of gran1ing damages again<t tht mmor would
in an
indiroct tnforctment of the comraci of loan. Al equ11y, however, a res1ricicd
comptlltd to restore
re.muuonary remedy 1s 3\'ailable - the manor may
proptrl) but only if the minor had oblaintd them fr.audultn!l)'. for example,
by misreprcscn!Lng lus age. Under s 3(1) MCA. the remedy of rcst1m1ion
b avnilJble in lhc al>sencc of fraud. Pur1her. while s 3( I ) MCA expressly
provide> for rcs1ora1ion of "any properly repre>cnting (the original acquired
proprnyl ': ii is unckcu if the r<mcdy in equi1y cx1ends to this.
lhus. under s 3( I) MC A. where !he minor olill has whhin his pos.ession 1he
original goods supplied by the coun1erpar1y. he 1my be <>rdered 10 return
1hese goods lo the counterparty. Moreover. if 1he minor has exchanged the
origm•I good< for other goods in a borter trade. 1hc minor could be ordered
to tran<ftr 10 1he counterparl)' these <ub<111u1e good<. If the m mor has
cons111ntd 1he goods. for example. he has ea1en 1hc cav1ar purchased from
the coonterparty. or gwen awa)' the cavfar a< a g1fi, then he 1s no longer tn
p<»>C»10n of the properry acquired undtr the contr•ct and no order under
s 3(1) may be possible. Bui whal if the mmor ha< >Ol<l the ongtnal goods for
cash? 1he problem here is thlll lhe MCA docs not provide n defin111on of the
word "properly" un<I it is undcar if "property" cncompasse> money. Most
textbook writers, however. nre of the view 1hn1 money can be considered
"propc1·1y" under Lhe MCA and thus the minor can b(• ordered 10 lnmsfer
to 1hc countcrpD1'ly (see. eg. Edwin
cash rcprc.r nling tht• original
Peel, rrritcl: ·11,. J.nw ofC011tmct (l41h ed, 20 15) lll p.r• 12· 04 1 and Clii11y
011 Co11trnm Vol I (32nd ed, 2015) al paro 9- 062).
247
"Any property representing (the original acquired property)" under
s 3(1) MCA - further complications
ConS1der the situauon where the original goods are sold ror cash which is used to
partially pay for olher goods purchased from another party, or whert the cash is
deposited into the minor's savings account, mixed with his other savings, and then
withdrawn to purchase other goods. In such slluatloru, can the "other goods" !).,
said lo represent the orlglMI goods and be llable 10 be surrendered to the supplier
of the original goods?
It has been suggested !hat the dlrtlcul1y In idenufying the proceeds of sale
of lhe original acquired
Into these subsequently acquired goods should
!)., considered by the court when exerctsing •IS discretion under s 3(1 ), Certainly,
an order to restore
that docs not ctur1y represent the originAI acquired
property will increase the nsk of an rndirccl entorcement or the minor's contrllCI.
which rn tum, Wiii undermine the protcc\JOn of mrnon under 18 (>tt Edwin Pttl,
Tr"'''' The Law of Contnxt ( t 4th ed, 201 S) at p.iro 12-042 for a tuner discussion)
9.38
It should bc borne in minJ thot lhe rcmcd)" under s 3( I) MCA is discretionary
a nd not nvailnble •S of right. The courl will make an order only "if ii "Jll>l t•nd
equitable to do so': The MCA h silen1 on the factors 10 be considered by 1he
court in the exercise of its dbcretion. I lowcvcr. the ditlicul1y in determining
if the minor has in his posses.Ion properly representing the original goods
would probably be an l111por1nn1 one. Tite fairness of 1he original coniracl
may be another. I lcncc, whether the •upplier tried to take advoniagc of lhc
minor's vulnen1b1lily is rdcvanl as is the minor's appearance ("'hethcr ii 1s
mature or not) an the absence of an)' reprcs<nlation as to has age. Finally, 1he
need to avoid an indirect enforcement of 1he minorS contract may also bt
considered an the ex•rcise of the courts discrehon.
(2) Section 2 Minors' Contracts Act
9.39
It has been men1ioned thal loans for the purchase of necessui« ore nol
b inding on a (pro1tc1ed) minor. hnancial institutions thtrefort woulJ nol
granl such loans unit>> repoymen1 of the loan nnd Interest is g11<trnn1eed by a
porty wi1h conlruclunl cnpncily. Where such guaruntee is furnished, s 2 MCA
reiterates thnl the gu(lranl<l' Is indeed enforceable against lhe gunrnnlor:
Where a guarantee Is givc11 in 1cspcc1 of an obliga1ion of a party 10 a
con1rac1 mode loller the commcnccrn cnl of the Act); ond
(u)
Chapter 9: Capacity and Privity of Coniract
(b) the obligation is unenforceable against him (or he repudiates the
Principles of Singapote Business Law
9.43
In any event, in the ease of a eontmt for the sale of goods, s 3(3) SGA
p rovides that "where necessaries are sold and delivered to a person who by
reason of mental incapacity o r drunkenness is incompetent to contract, he
111ust pay a reasonable price for thent.
a contract for necessary goods
\VOuld be
exception to the general rule o n contracts with the 111cntally
contracl) because he was. a n1inor when the conlracl was 1n adr,
the guarantee shall not for that rrason alone be unenforceable against
the guarantor.
incapacitated. Even if the person under the n'ental in,pairinent can prove
t hat he did not understand what he was doing and that this was known to
o r ought LO have been known by the other party, he will st.ill have to pay
n reasonable price for necessary goods that have been sold and delivered
to him.
M ENTAL INCAPACITY
9.40
A person may be mentally incapacitated in two ways: mental retardation
o r intoxication. More recently, Lhe Singapore High Court was prepared
to recognize that a person under the influe nce of medicatiOCl can be
mentally incapacitated (see C/ln11 Gek Yong v Violet Netto (2018) at (39)).
The general rule is that contracts entered into by the n1entally incapacitated
bind them unless and. until they choose 10 avoid or repudiate the contracts.
In other words, the contracts are rendered voidable (see, eg. for the mentall)'
uns<mnd, Che Som bte Yip v Mnhn Pie Ltd ( 1989): and fo r the drunk,
Gore v Gibson ( 1843)). lhe law affords protection to those under a mental
disability if:
o
the mental incapacity prevents the person under such a disal>ility from
underslanding the general nature and effect of the transaction he is
entering into; nnd
o
the o ther pal'ly knows or should have known about the incapacity al
the time of entering into the contract. The burden of proving such
knowledge is on t he party seeking to avoid the contract.
9.44
A contract will become absolutely binding on a person of unsound mind if
he ratifies the contract when he is cured
Mm1d1ts v Trimboru (1946)).
In the same way, a contract will absolutely bind a d runk if he rat ifies after he
becomes sober (see Mnt1/1cws v Baxter (1873)).
CORPORATIONS
9.45
W hen a company is incorporated, the common law confers upon it a legal
personality in the sense that it is considered a separ:.lle legal entity fro1n
its owners (the shareholders) and has capacity to enter into contracts like
a ny human being (see Chapter 21, para 21.21 onwards). Issues relating
t<> its capacity to enter into contracts arise in the h.,.o situations discussed
below.
9.46
The first relates lo the doctrine of ultra vires. 'llle doctrine wa.s originally
introduced to protect shareholders who had invested in a company o n the
understanding that their money would be applied for certain purposes
in the objects clause (a clause that .states the purpose for which a
company is incorporated) contained in a document of incorporation, the
constitution of the company. For example, if the objects clause states that
t he co1npany was set up to carry on the business of selling Jnen'.s shoes,
nny contract entered into by the company to purchase designer watches
will be considered 11/tm vircs, that is, beyond the capacity of the company.
a nd therefb re, under co1nn1on la\\r1 is null and void. However, while the
doctrine protects the shareholders, il o perates harshly upon innocent third
parties who dealt in good faith with the company. TI1us, steps were taken to
(see Resorts World at Sentosn Pte Ud v Lee Fook Klteun (2018) at
9.41
TI1e second requirement of knowledge can be contrasted with the law on
protected mino rs which d<>cs not require knowledge by the counte rparty of
the m inor's lack of legal c:1pacity. This has been the subject of criticism (sec
A H Hudson, "Mental Incapacity Revisited" (1986) Tire Convcynnccr and
Property Lnwyer t 78).
9.42
Though the mentally incapacitated may avoid the contract if the two
requlre1nents 1nentioned above are sat isfied. the counterparty 10 the contract
is always bound. Jlo,..·cvcr. if the countcrparty docs not know or, in the
circumstances of the c;ase, it c;innot l>e shown that he ought to have known
of the inc:1pacity. he may enforce the contract against the person u nder the
disabilily.
249
250
Principlr:s of Singaport: Business law
Chapter 9: Capacity and Pfivity of CorHraet
provide some protection to third parties via s 25 Companies Act (Cap SO,
them. impose a burden on a third pal'ty. The first rule operotes to protect
Lht rights of parties to a contract insofar as lt does not allow interference
from third parties, while the second protects unsuspecting third parties from
being involuntarily burdened by obligat ions u nder a controct lo which they
2006 Rev Ed) ("CA'').
9.47
Section 25 CA prevents a contract that is 11/trn vires from being rendered
null and void automatically. Instead, restraint or the setting aside of the
ultra vircs contract will only be ordered by the court, upon application by a
member or a debentu re holder of l he company, if the court considers ii just
and C<)uitablt to do so. Otl1erwisc the contract is valid and binding on the
company. Significantly, s 23 CA now allows the incorporntors of a company
a c:hoke as to whether to include an objects clause in che coni;titut5on of the
a re nol privy.
9.51
The se·cond rule is wholly understandable and uncontroversial. However,
the first has worked harshly against third parties whom the contracting
parties clearly intend to benefit under the contract. This is illustrated in the
case of Beswick v Beswick ( 1968). Peter Beswick sold his coal bu.<iness 10
his nephew, John Beswick, in return for a weekly payment of £6 I Os from
his nephew for the rest of his life, and if he died leaving his wife a widow.
she was to rueive £5 a week from the nephew fol' the rest of her life.
John Beswick honoured the agreement unt il his uncle's death whereupon
he then made 011ly one payment of £S to his aunt. TI1e widow claimed
against the nephew for specific performonce of the rest of the payments. She
claianrd in her own na1ne as well as in her capacity as ad1ninhtratrix of her
h usb<IJ>d's estate. TI1e court held that she could not personally claim against
the nephew as she was not privy to the cont ract between her husband
and the nephew. How(·ver, hc.·r claim as ad rninistratrix of her husband's
estate succeeded because, here, she was claiming on behalf of her dead
h usband, and he had been privy to the contract. ln this case, the widow's
ability to sue as administr:.1trix of her husband's estate "saved the da)',..
for had she not been able to do so, she would have been left without a
remedy.
9.52
The first rule has also caused conunercial inconvenience where it prevents
third panics. say employees, from being able to rely on "limitation of
co1n µany or to 01nit it altogether. If it is omitted, the doctrine of ultra virt.s
wiU tlo longer be relevant. For a detailed discussion of the docuine of 11/tm
vires see Chapter 21, para 21.37 onwards).
9.48
The second situation where the company's capacity to cont rnct may be in issue
relates 10
contracts. Prior to a cornpany's incorporation.
contracts n1ay need to be entered into to set into n1otion the process or
incorporation. For example, lawyers may need to be engaged to draft the
co1npnny's constitutional doc:u1nent. However. ai this s1age. che co1T1poiny has
not c:o1nc into existcn.ce and, al con11non law, is incapable of c:onlrac:ting or
to ratify a contract afler its incorpor;u ion.
9.49
Section 41 CA changes the po<ilion. Sect ion 41(I) allows contracts entered
in to prior to a company's formation to be ratified by the company after its
incorporation and lo bind the company thereafter. In the absence of such
ratification by the company, s 41(2) provides for persons who acted in the
name of or on behalf of the company in entering into pre-incorporation
contracts to be perso nally bound by the contract unles.< there is express
agreement otherwise.
Jiabilily" clauses contained in contracts bet·ween their eJnplc>yers and the
claimants (see Scruttons Ltd v Midlm1d Silicones Ltd (1962)). Such limitation
clauses may well be a reason11blc and legit imate way of allocating business
l:'isks and thl' burden or insurance between the e1nployer and the clahnant.
PRIVITY OF C ONTRACT AND T HIRD PARTIES
9.50
A.< mentioned, under the doctrine of privily of contract, only parties lo a
contract can sue and arc liable 10 be sued in respect of rights and obligations.
respectively. under the coru ract. 1\vo rules e1nanat.e fro1n this doctrine: first.
a third party lo a contract cannot enforce • benclil promised u.nder that
contract: and second. the contract ing parties can not. b)• a cont ract between
9.53
As ll result. there have been m;my judicial and ad hoe statutory ottempts • l
evading this first rule. "lhc repeated calls for reform were finally mwwcred
with the legislation of the Contracts (Rights of TI1ird Pnrties) Act (Co1• S3B.
2002 Rev Ed)) ("CRTPA") in 200 1. The CRTPA is closely modelled on the
English Act of the srunc nan1e. A significanl difference belween these Acts is
that Lhe Singapore CRTPA expressly dispels 1he possibility of any argument
251
252
Principles of Singapore Business law
Chapter 9: Capacity and Pfivity of CorHraet
ba.ml on lhc doctrine of eonsidera1 ion being raised lo defea1 a lhird par1y's
claim (set s 2(5) which ends wilh Lhe additional words "and such remedy
slinll 1101 be refused 011 the grou11d tlwt, ns ngni11st the promisor. the 1/1irtl
party is n volu11teer").
9.54
techniques for evading the privity rule (s 8( I )) nor does it pre,•ent new
techniques from being created. 1lu1s, ii is still necessary to consider, nlbeil
b l'iefty, some of 1he more common judicial and stat\llory tech nique.< that
existed prior to the introduction of 1he CRTPA. The CRTPA and these
existing techniques will be discussed before we look at the 1ed111iques for
getting around the second rule, that of not imposing burdens on third
parties.
Box 9.3
Privily of contract and consideration - a single o r two distinct rules?
The doctrines of privily or contract and consideration are closely conneCled. This
is Illustrated In Tweddle v Atkinson (1861) (see also, Chapter 8, para 8.18). TI1e
respective fathers of a bride and groom contracted with one another, each promising
to p3y a sum ol money to th<a groom upon the couple's marriage. The con1rac1 also
conferred upon the groom full power to sue the contracting parties fo r the sums
promised. The bride's father failed to pay and upon his death, the groom sued his
estate for lhe sum. The g room's action failed as he d id not provide any consideration
for the promise. Although lh" privily rule was not used Lo explain the decision, il is
clear that the groom's action would also have failed for lack of privily.
T HIRD PARTY ENFORCEMENT OF B ENEFITS UNDER CONTRACT:
TECHNIQUES TO G ET AROUND THE PRIVITY RULE
Statutory Techniques
(1) Contracts (Rights o f Third Parties) Act (Cap 538, 2002 Rev Ed)
9.55
him. (Note: If lhe Njoinl·promisee doctrine"' discussed In the Ausltalian case of Coulls
v Bogot's Executor and Trustee Co lld (1967) is applied, C would be able to enforco
Ns promise as B is deemed to have supplied consideration on behalf of the joint·
promlsee C. The jolnl-promlsee doctrine presupposes that considerullon and privlty
are distinct doctrines (lor a fu ller discussion of the docl rlne, sec A Phang, Oltshirt,
Filoot and
Law of Contract (2nd ed, 1998) at pp 160-163).
It has also bee11
that conslderMio11 and privlty are distinct doctrines as
each performs a dllferent function: the former relates lo the types of promi1es thal
can be enforced Md the laller to who Is enlllled 10 sue (see, eg, D Beyleveld and
R Brownsword, "Privlty, Transitivity and Rollonallly'' ( 1991) 54 Modern Law Review
48 at p 61). Nevertheless, ll has been astutely observed lhlll lhe close connection
between the doctrines makes it Is
to retorm one without rerorming the
other (see E McKendrick, Contract Law (12th ed, 2017) at para 7.3). One or the
other may sUll prove a stumbling block lo lhe enforcement of third party benefits.
253
Of the techniques to evade the prh•ity rule, the CRTPA is the most
i mportant It provides a "geJ>eral and wide-ra.n ging exception 10 1he lprivityJ
r.ulc" (os is described of its UK counlcrpai-t in the UK Law Commission
Report (1996) at (5.161). Certain p1·0,•isio11s not ali·eady me111iooed are
highlighted below.
The relevant rule of consideration here is that "consideration must mow from
the promisee". The groom, being a third party to Lhe contract between hls and
hi$ bride's father, was neither a promisee nor had he provided consideration for
the promises. This Is the p.aradigm situation where third parties are conferred
benefits under a contract and raises the question whether lhe doctrines of privity
and consideration arc one and the same, or whether they are dislinct concepts 1ha1
pment two separate hurdles to the enforcement o f a third party be11efit.
Since the House of Lords d ecisions in Beswick v Beswick (1968) and Scriiuons Ltd
v Midland Silicones Ud (1962), il is clear that consideration and privily are distinct
doctrine;. A simple example supporis lhis position: A contracts with both B and C
to supply C wilh a limited edition book in return lor B's promise to pay A 11 00.
Should A fail to supply C with Lhe book, C's action again>LA may still fail, not for
lack of privily, since he Is a (ol nt·promisee, but for lack of consideration moving from
The CRTPA does not override the existing rnmmon bw or ad hoe stalutory
(a) Scope of application
9.56
The CRTPA au101mticnlly applies to contracts entered into from 1 July 2002
(s 1(2)). lle1wee11 1 January
30 June 2002. the CRTPA applies 011ly if
t he con1rac1 expressly provides for its applietuion (s 1(3)). However, certain
contracts are excluded from lhe scope of lhe C RTPA. ·111cse arc oonlrocts on
b ills of exch;111ge, promissory note.s or other ncgo1inblc i11s1rumcnts (s 7(1)),
registration documents of " limited liability partnership under the Limited
Linbilily Partnerships Acl 2005 or any such. partnership agreement under
t he Act (s 7(2A)), and any conlrnct binding o n a company and ils members
under s 39 Companies Acl (s 7(2)). For certain other contracts, the CRTPA
cmly confel\< limited rights L<> third parties. A third party will nol acquire
n righl under the CRTPA to enforce a te rnl in a contract of e1nployrnent
againsl an employee (s 7(3}), and the lhird party may only ncquirc the right
to enforce an exempt io n clause in contracts of carriage of goods by scn, rail
o r road. or nir which are subject to their re.<pective rules of internnlionol
transport conventions (s 7(4)).
254
Chap1er 9: C.paci!y and Privily of Con1m1
9.57
Apm from thei.e specific exeeprions and limitit1ons. contmt1ng parties ue
in aesthetic medicine pmuaded Ng to enter into a joint venturt, 10 help
a1 liberty 10 exclude or impose cond111on• pr<ecdenl upon the apphcation
or the CRTPA by inserting an express !Crm 10 this etf<et in their contract
(s 2(4)).
six doctors incorporn1ed Cl.AAS Medical Centre Pte l.td ("Cl.AAS") wuh
(b) Rights of 1/1/rd party to enforce controctuol term
9.58
Princ1plts of Singapott Busintss law
To acquire n right to s ue in his nan1e to enforce a terin of a contrac t, a third
pnrcy
salisfy two requiren1enl$:
( I) I le 11111>1 have been "expressly ide111ified In the con1rnc1 by Mme, as a
member of a class, or as answering a particular dcsci·iplion but nred not
be in existence when the conlracl is entered into" (• 2(3)). The groom
lft 1i.>ttltllt 11 Atkiruon (sre Box 9.3) ind the widow 1n Buwiek v Be1witk
(S« para 9.51) wall have sotisficd this rcquirtmenl having been cxprcssly
1den116cd. A subsequent purchaser or a proper!)• would come
this
requirement, olthough not identified by name. ir the contract between
the property dev.,Joper and the original purchaser pro,,des that the
developer shall be liable 10 the original •nd sub,.quent purchase" for
def<CI> in the development.
them establish an aes1hrt1( medical practice. 1'g agreed and m 2005, the
all six as its shareholder.. 1'g subsequently also became n shareholder.
Ng incorporated n holding company ns a sole shareholder and trar1'ferrcd
his private practice and distributorship business to the company. Cl.AAS
then purchased 60 per cent of Ngi. shares in the holding company nnd
was given n 1wo-ycnr option 10 purchase the remaining 40 per cent. Cl.AAS
exercised the option about seven months la1 er whereupon Ng entered 11110
n shareholders' agreement with the six docto r s. ·n1e agreement included the
following 1crms:
o
Clause 11: a rrstrai111 of 1r111k clnusr prohibiting any of Cl.AAS'<
shareholders from bring rngagrd 111 any business in Singapore which 1s
tn compe1111on with the bu>incss of ICLAASI and/or engaging 1n thr
practice of Acs1hc11c Medicme while s1tll a sharehold<r or Cl.AAS •nd
for three yrars after ceasmg 10 be one:
o
Clause I l(c): a liq1111/11ttd '1n11111ges darts< specifying that if Ng breached
Clause 11. he is liable 10 pay damnges or $1 million 10 Cl.AAS while
the other doctors would, upon brench, have 10 pay Cl.AAS $700,000
each:
o
Clause 12. l(ii): a lfr111il111ti011 clcwsc allowing the slrnreholdcrs' agrcc111cn1
10 be brought to a11 end if all parl ie> agreed 10 do so in writing:
and
o
Cbuse 14.S: a pr11/1ibctlo11 of assig11111wr rlauu restnctmg the assign
ment or right.s and benrfit> under the agreement by any party w11hou1
the prior wrinen consrnt or the other parties 10 the agreement.
(2) ' I he third part)' nn1>1 fall within either one of the follo,•lng >iluaiions:
o
the contrncl expressly slates that he may enforce the term (• 2(1)(n)).
1 hus, for example, s 2( 1)(n) would h:wc enabled the groom in
'/\w·drlle v Atki11so11 to sue his fo1her· in-low's estnle for payment as
1he cont ract expressly conferred on him 1he righ1 to me: or
o
9.59
a lerm In the contract purpOrl> IO confor a benefit on
2(1)(b)).
1 his 1s subject 10 any contrary inlcnuon of the con1rac1mg parties
(1e. an Intention nol lo ollow Ihm) party enforcement of the tcrm)
as
be gJtaned from a proptr COllUfUction or the terms of thc
contract (s 2(2)).
SeClion.> 2(1)(b) and 2(2) were considered m the Singapor< Court of Appeol
(20 I O). The
dcci;ion of CLAAS Mcrliml Centre Pte Lrrl v Ng IJ0011
fact> rd atlng to the third party enforceme nt issue ore M follow.: Ng Boon
Ching ("Ng") was 11 doctor who had for many years run his own successful
pdvlllc pracllce in nc.thelic medicine, and distributor.hip bu>incss dealing
in machines used in aesthetic medicine (laser and intense pulse light
machines) and ski n care products. In 2004. six doctors inexperienced
2S5
ln the following i·cu. rclauon; wured bctwttn Ng and the other doctors
(the original •ix and • new JoctoMhueholder). Ng sold all hi•
in CLAAS lo one or the original SIX doctors. resigned as director or
Cl.AAS and the holding company ond left. Almost a month lattr, Ng set
up his own generol and aeslhl·tic 1nedical practice at another location in
Singapore. As CLAAS was nol n I""!)' to the shareholders' agreement.
:i dispute lhercfore arose as 10 whether Cl.AAS wos en1i1led 10 rcl)'
o n s 2( 1)(b) CRTPA 10 enforce the rcs1ral n1 or trade clause (Clau;e 11)
ngoinsl Ng.
256
Pnnc1plts ot S1n9;iport Business Law
Chapter 9: Capacity and Pfivity of Contract
9.60
lhe court provided important eluifimions
ors.• 2(t){b) ond 2(2) CRTPA :tS follows:
o
The fact that the third pmy was :i corpor.ite entity. 2 separate entuy m
law from the shareholders, also did not rebut 1he presumption {al (39)).
a.• the shareholder< had chosen the corporate \'Chide to "advance and
on the purpose and application
lhe inten1 behind ss 2(1){b) and 2(2) was 10
between i11ttnded
anJ 111ridt11tnl brnrficiaries to a contract - iur1dtutal bcnrficiarics were
protect their mterests and had further provided in their agre<ment for
liqu1da1ed damages to be paid not to 1he shareholders but to 1he corpora1e
not e ntitled to sue under the contract (at 1291).
o
vehicle.
Section 2(1)(b) only required proof or n purpose to benefit• third party;
ii
was not neccssnrr to show a predon11't1nn1 purpose or intent to benefit
(M 1281).
o
' l hc cont racting par ty who invoked s 2(2) bore the burden to prove that
u proper con>truction or the contract negated Jny intention to allow the
third party to enforce the term (at (29)).
o
A proper construction under s 2(2) would involve an obJeCti'-c approach
to contr•ctual interpretation {at (371). taking ;iccount or background
facts ;urroundmg the making of the contract (at 1371and141)). A mere
failure to exprcssl)• state 111 1he con1ract 1ha1 the 1hird pany had a ngh1
to enforce the ltrm is not an obstacle to the third pnly acquiring such
a riKht under s 2( l)(b). Neither was it proof thal the coniracting panics
did not intend to enable the third party to enforce the term under s 2(2)
9.62
s 2(1)(b). The burden should only shift 10 1he contracting pani.s to
prove that 1hey did not mlend 10 ollow the third party to enforc. th• ttrm
under s 2(2). afttr th• third pnty had shown that he was the mtended
beneficiary.
9.63
(:it 1371).
9.61
On t he focts, lhe Cour l noted t hat C lause 11(c) expressly provided for
liquidated damages for breach of Clause 11 to be paid to CLAAS. "!he court
thu• concluded ((It [281) t hat Chrnse 11 wa> dearly intended to benefit
the 1hird pnty (CLAAS), and that a presu111pt1on arose that Cl.AAS was
intended to be able to enforce Clause 11. lhe courl then held thot • proper
corutruction or the following contract tcrnu did not rebul the pre>umphon.
o
Clause 12.l(ii): the termination clause did not
pro\1de for thr
right 10 tcrmi11ate the shareholder agre<mcnt to be exercisable >1•1tho11t
Cl.AAS's conse11t (at (331). Section 3(3) CRTPA required such expr<l's
provi>lon in order 10 override a third party-. (and hence Cl.AAS'<) nght
to enforce bencfi1s conferred under the agreement (sec para 9.65).
Clause I •1.5: where contract 1e rms Indicated an i111en1lon 10 benefit a
1hlrd pal'ty. t his d id not amount in h1w to :rn nsslgn111ent of benefits
ttnd a gmm1I restriction of assign111e11t clause would not rebut Ihc
presumption (al 135]- [361).
257
The CRTPA eicprcssly provide, 1hat • benefit enforceable b)' th• third pany
includes his being able to avail himself or t h e protection of an exemption
clause in a conlract between the original contracting panics (s 2(6)) as long
as he would have been able to do so if he hnd been a pal'ty lo the contract
(s 4(6)). i\11 example Is a cont rJCt bclwccn A a nd 8 in which t\ excludes
or limits his liability In t he tort or negligence towards B and fortl1er
t hat the term is also for the bcncfi1 of As servants. •gents and
who 1n.ay enforce the term. [n this case, Pl<i
may rely on the cla1ue to exclude or hmll hi< liability when sued by 8 m the
tort of negligence, provided the exemphon douse is vahd and enforcnblc
n1 law (on cxcn1ption clau>e<. ;cc Chap1cr 11).
for the rco;ons staled below:
o
Subsequent to t he CLAAS Mrdirnl decision, the liigh Court in Col11mbi11
Asin Hc11/thC11rt Sr/11 /l/11/ v l/1111g //i11 Kit /Sdwnrd (2014) no1cd (at l27 ti [278)) thal the court •hould consider the distinc1ion between i11tenrlcd
and incitlentnl bcnefidaries when seeking to establish if the ltrms or
the contract purported to confer a benefit on the third party, under
(c) Remedies ovoi/oble to o third porry
9.64
A third party who is cn11tlcd 10 enforce a tci m or the contract h;is a\'31lablc
to him remedies for brc>eh or contract as if he 1s a part)' 10 the co11trac1 (see.
cg, Cnrricmet G/obol Lt1/ v Al>key Ptc Lui (2010)). The contractual mncd1es
include damage>. specific performance and injunction. and the U>oal rnlcs
governins the availability or 1hesc remedies apply (s 2(5)) (>cc C hapter 18
for the governing rules).
2S8
Princ1plts of Singapott Busintss law
Chap1er 9: C.paci!y and Privily of Con1m1
9.67
(d) Variation and mciulon of contract
9.65
Where the third party acquires a righ1 to enforce a tmn under s 2, and
rhe third party has either communicat<d hi<
10 the term to the
pronmor (!he contraeling pany against whom the 1h1rd party would enforce
the term). or 1f he has relied o n the lcrm and lhi> ,. known lo or can
rea<onably be expected lo have been foreseen by 1he promisor, lhe contracl
cannol be v.iried or rescinded so as co re1novc or rilter the thi rd party's
righl without hi• co1» enl (< 3( I)). Bui 1his limilolion may be pre-empted
by lhc con1roc1ing parlies' insen ion of an
term reserving their righ1
10 vary or rescind lheir conlract ";t h1>111 the 1hird pony's conN<nl (• 3(3)(•)).
Indeed, the controcling parties may, by an expre.s term, even sp.ecify 1ha1
the 1hird party's consent is required in circum>iance. other than those stated
abo\'C (s 3(3)(b)).
(e) Other provlslom
9.66
Some other relevant proV1s1ons arc as follow.. A third pan>"• right of
enforcrmtnt 1s sub)«t 10 defences or sel·om ova1lable 10 rhe pronusor
(s 4). The promi>or is also prolocted ngainsl double h.1bili1y if sued by both
the 1hird part)' and the other contrac1ing parly ("the prombec") (s 6) as
1hc
right 10 enforce any 1er111 of 1he contract, 111cludmg the 1erm
which ccmfcr. n benelit on rhe 1hird part)', i• preserved (s 5) (sec Figure 9.1
for who I; ll "prorniso ,..· and " prombec"),
PROMISEE of
Third piny
Btnt flt
0
(2) Other statutes
9.68
PROMISOR of
Third pi ny
B-entfit
A p<CMTIMS to. eg, .-II his buMIOH to B
8 promiff9 10 pay
SX to C In retum for
Aa Pf'O-ITMSe
Figure 9,1
and promise• Of \11e third party penefll
2S9
Prior to lhe <nacrment of the CR'I PA, lcgislJt ion hod been introduced on an
ad hoe basis 10 deal wnh specific situations where 11 was felt 1ha1o 1hird par1y
s hould be entitled 10 enforce a bencfir conferred upon him. For •xamplc,
s 9( 1) Motor Vehicles (Third-Part)' Risks and Compensation) Act (Cap 189,
2000 Rev Ed) cnr itlcs a rhird pllfty Injured in a motor accident to doilll
payment of lhe Judgmenl sum awarded ag:iinsr the insured moto1is1 diree1ly
fron1 the insurance cornpany in certain circunns-lnnces. Another cxan,plc as s
2 Bills of Lading AC! (Q1p ) 114, 1994 Rev Ed) which provides th•t lhe IJwful
holder of a bill of lading
a sh1ppmg document - shall •ha,·e tran<ferred
lo and
in him oil righls of >Uil und"r the conlract of carriagt lof
goods by sea) as 1f ht had b«n a party to that
Some Commo n Law Techniques
(1 ) Action by promisee on behalf of third party
9.69
THIRD PARTY
Under s 8(2). a 1h1rd p3")' '' precluded from fh:illenging an exemption
clause relied upon by 1he promi>or (in hi• dtfence 10 a •ui1 ogaiml him
by the third p3rty) on 1he baS1> of s 2(2) Unfair Contract Term< AC!
(Cap 396, t994 Rev Ed) ("UCl'A"). Thus, i( rhe promisor negligendy fa1h to
honour the 1crm conferring a bencfi1 on the third parry and 1his re;uhed in
loss or damage to the third party other than death or personal iniury, the
third party cannot require lhnt 1hc promisor's exemption clause be subjecl
to lhc lest of rca<onablencss under UCTA. No1 surprisingly, this provi;ion
has been the subject of heavy criticism. Amongst 01hers. it produces 1he
odd resuh that o third party •uing o promisnr under the CRTPA Is dcnitd
t he safeguard of s 2(2) UC'l'A whik ii i> possible that >uch a ;afcguard
is available 1f he wc1 c 10 moun1 an action in the tort of negligence (<ce
J Adams, D Beyleveld 3nd R Brownsword. •Privity of Contuct
The
Bcndirs and Burdens of Law Reform" ( 1997) 60 Modem Uiw Rrwt"' 238 at
pp 258-263).
If !he privity rule prevents a third p•rty from suing lhe prombor dirccllj•
to enforce 1hc promised be111•fit. can 1he promiscc >UC on the 1hird pmy's
behnlf? This ovenue of recovering 11 1hi rd par1y's loss is highly dependent
o n lhe willingness of lhc prornisec to do so. Technically. lhe proml.cc is
entitled 10 sue the pron1i>C>r for 11 bm1th of an)' term of the con1rac1, 1lie
1·eal issue is 1he type of remedies reco\'emblc on beh•lf of lht 1h1rd pony.
260
Chapter 9: Capacity and Pfivity of CorHraet
9.70
Principles of Singapore Business law
The remedy of specifie performance would compel the pFomisor lo do what
( 1994). In this ease, n building eontrnetor C'l'romisor") had contracted with
he has promised 10 do in the con1rac1 and hence will be elTect ive 10 cnfore<
a third party's benefit (see, eg, Beswick 11 Beswick). However, unlike damages,
specific performance is not :wailable as of right upon a breach of contract.
II is a discretionary remedy and if damages arc an adequate remedy, specific
performance will not be o rdered. Thus, if specific performance is u.navailable
but· the p romisee is willing to claim on behalf of the third party, can the
promisee claim mbstcmtinl damages in respect of the third party's loss>
Lhc owner of a site ("pro misce") for the development of the Site into offices,
shops and fla ts. TI1e contract was breached because o f defects in the building
works. However, the defects surfaced only after the developmenl had been
sold 10 a t hird party. When the original owner ·promisee sued 1hc contractorpromisor for loss s<11fered by t he t hird party In rectifying the defects. the
proll'1isor argued that the pron'lisee was onl)r entitled to norninal dan'lage.s
they were no longer owners of the devclo;pn1cnt and had not
suffered any loss. The House of Lords held tltat ll>e promlsee was entitled to
claim in respect o f t he third port)'S loss by applying a principle summarised
by Lord Diplock in 7/re Albazero (1977) (at p 437e-f) as follows:
The general rule is that a promisee is entitled to sue for breach of contract
to recover substnntinl d:unagcs in respect of the pron1isr.r's own Joss. 'l hus,
where t he promisee h imself has s<1 1fered 1lO loss upon a breach of a term.
!Jin a con1mcrcial contract concerning goods v"herc it is in tl1e
contemplation of 1he parties that t he proprietary interests in the goods
n1ay be transferred fron1 o ne owner to another after the contract has
been entered into and before the breach which causes loss or domage
to the goorls. an original parry to the con tract, if such be the in ten1ion
of then1 both. is to be treated in law as h.aving entered into the concract
for the benefit of nll persons who have or 1na)' acquire an interest in the
good$ before they arc lost or damaged, and is en1 i1led to recover by way
of damages for breach of c-0ntr:ict the actual los.< sustained by those for
whose benefit the contract is entered into. !emphasis added!
for example, to solely benefit a third party. the proniisee will only be entitled
to 11omi1111/ dnmages (possibl)' o nl)' SI). Lord Denning made a radical
attempt to introduce an exception to the general rule in /11ckso11 '' Horizon
Holidnys ( 1975). Mr Jackson ("the promisee") had contr:icted fo r a holiday
for himself and his family ("the third parties") but the holida)' turned out
to be below the standard promised by Horizon Holidays ("the IJ'fOmisor")
who was clearly in hreach of contract. 1l>e promisee sued and was awarded
£ 1, 10() of which £500 was for "mrntul
1hc promisor appealrd
against the award as excessive but the appeal was dismissed. While the
majority judges felt that t he award was solely for Lhe promisee's
(perhaps
because his Joss incrc-ascd on witnessing the disappointrnent of his fan1ily).
Lord Denning alone held that the award covered both tl1e promisee and
ihe third parties' loss. His Lordship felt i hat in certain contracts. such as
where ;, host contracts with a restaurant for dinner fOr hin1sclf and his
friends or where a viC<ir books a coach oming fol' the church .choir. the
contractin.g party·promisce should be nllowed to claim for the loss of the
third parties. I lowevcr, Lord Dcnning's approach was disapproved by
the I-louse of Lords in W.>odm- /llves1111elll Dcvclop111c111 Lid v Wimpey
Cc11>str11ctioll UK Ltd ( 1980) which reiterated thal a p romisec cannot
recover damages on behalf of a third party, Interestingly, however, the
House tentatively suggested that certain types of contracts m iglu warrant
special 1rcatmcnt: con.t racts for fomily holidays. for meals in a rcstnuranl for
a party or for hiring a taxi for n group. ' I his suggestion has yet to be applied
as hM.
9.71
Anolher controversial exception to 1he g('neral rule was intro.duccd by
Lord Browne-Wilkinson in Li11de11 G11rdens Trust v Lcncstn S/111/Rc Disposals
261
' the majority of the House of Lords felt it appropriate to extend this
principle (the "Alb11zcro exception") to cover cases involving real property
(le, land and buildi ng) bu1 nol lo ca<e.< where lhe ihird party had a dil'ecl
right oi action against the promisor. O n the facts, the House found t hat the
promisor and promisee contracted with knowledge tho.t the development
would be occupied and, possibly, sold to third parties. A contract term
prohibiting t he promisee from assigning the contract to a third party
without the promisor's consent, prevented the ll>ird party from suing on the
c:ontr.1ct (:is the promisor refused consent). 1nis led the House to conclude
that it n1ust hav(> been the intention of th.e contracting parl ies that lhe
promiscc should be entitled to claim for the thit•d party's loss due to the
pronlisor'$ defective perforinance.
9.72
The Albauro exception w11s subscquemly fur1hcr extended to cover a
s ituation where t he promisec ,/ii/ 1101 origi11nlly ow11 the property which was
the subject of the building contract with the contrnctor·promisor. 11w
exception enabled Lhc promisee to claim for the development owner-third
262
Chapter 9: Capacity and Pfivity of CorHraet
Principles of Singapore Business law
roof prope1·ly and Lhe husband has to eall in and pay another builder
to complele the work. Is it lo be said 1ha1 the husband has suffered no
damage because he docs nol own 1he property? Such a resuh would in
my view be absurd and 1he answer is tha1 the husband has suffered loss
because he did nol receive the bargain for which he had coniracted wi1h
1he firsl builder aiid the measure of damages is 1he cost of securing the
by completing 1he roof repairs properly by
performance of tha1
1he second builder.
parti•s loss arising from defects in the building works (see D11rli11g1011
Boro11xh Council 11 Wiitshire Northern Ltd (1995)).
9.73
9.74
Ye1 later, in Alfred McAlpi11e Construction /,ttl 11 Pmint01v11 Ltd (2000). 1he
majority of the Hou•< of Lords endorsed the Li11de11 Gnrtlens's extension
(see para 9.71), and appeared to have endorsed the further extension
in Onrli11gto11 (see para 9.72). Tiie House held that the ex isience of a
direct right of oction by the devdopmcnt owner· third par1y ogainst the
contractor-promisor conferred by a "duty of care deed" prevented the
Albazero exception from being applied to enoble the prom isee who
conlractcd for 1hc building works, 10 sue for the third party's loss.
The Albnzcro exception ca11ie to be known as the "narrow grou11d" of tl1e
Linden Gurdtns decision, 'Ihe exception applies only if there exists a ·1cgol
black hole" that needs to be filled. The quaint metaphor refers 10 a situation
where a parly with the legal righ1 to sue had nol suffered substnntial loss
while 1he one who did hos no right 10 sue for loc.k of privily of contraclprecisely the silllatioll that prevailed in the Li11dc11 Gnrtlc11s case_ There is
no legal black hole to nil if lhe parly suffering substantial loss has a right
to sue.
explains 'vhy the House of Lords in Panatown found no roo1n
for the application of the All111zcro exception (or "narrow ground") as 1he
third party concerned had a direct right to sue the promisor under the
•duty of care deed''.
9.75
Lord Griffiths in U11dcn Gnrdc11s disagreed wit h the majority deciskm (based
on the "norl'<)w ground") an<l preferred to characterise lhe third v•rly loss
as being the promisee's own loss, 1ha1 is. the loss of his performance i111eres1
in the conlracl because he did not receive what he bargained for ("1he
broad ground"), 'lhc analogy he used (al pp 96-97) lo illuslrnte his point is
illuminating:
In everyday life contrac1s for work and labour are co1i.1ai>1lj• being
placed by 1hose who have no proprie1ary intcrcsl in 1he subjecl mat1er
of the contract. ·ro take: n con1111on cx111npJr. the n1atdn'IOniaB hon1e is
owned by the wife and the
remaining assets a1·e 01vncd by 1he
husband and he ls I he sole earner. The house requires a new roof and
the husband pluces a conlract with a builder to rarry ou1 l.lu- work. 1 he
husbt1nd is 1101 ac1ing as agent for his wife. he makes 1he contract as
principal because only he can pay for it 11ie builder fails 10 replace the
263
The minority judges in Pn11ntown favoured Lord Griffiths's approach and
had held that the promisee could claim for d efect< lo the property as being
his own loss. Notably. the "broad ground" also received lhe majority judges'
qualified support in Prmntow11.
9.76
Locally, the "narrow ground" (or Albazcro exception) is law. having
been applied by the Singapore Court of Appeal in C/1ia Kok leo11g v
Pmspcrlm1d Ptc Ud (2005). Briefly. the facl< of Chin Kok Lea11g are as
follows: the claimant, the developer of a condominium, initiated legal
proceed ings for breach of contract against (1) the main contl'llclor for
defective works in the construction of the condominium; and (2) the
architecls for failure to exercise due care in lhe design and supervision of
t he building project. In this inslnnce, the claimant wos the "promisee" and,
the nrnin contractor and
were the- ')>ron1isors" in the respective
contracts. Mowcvcr, legal action was commenced after the individmtl units
ln the condominium had been sold lo third parties and ownership of the
co1nn1on areas had been taken over by th<' 1nanagrmenl corporation or
the condominium {"the MCST"), ulso a third party. The dcf<cts lo the
common oreas {de-bonding of 1iles of external woll
ond damoged
glass bricks •t the lobbies and stairways) only appeared after the claimanl
hod censed lo be owner. At 1he time of the claim, the claimant had nol
incurred expenditure to rec1ify the defects and the MCST had ye1 to sue the
claimtrnl As mentioned, the Court of Appeal applied 1he "narrow ground"
o r Al/1nzero exception 10 allow the claimant·pl'omisee to claim for substaniial
damages ag:tlnsl Ihe main contraclor· and Mchilecls-promisors. on behalf
o f the MCST-third parly. 1l1is was despite the foci 1ha1 1hc MCST-1hird
party had a direct action against the promiso1'S in the 1ort of negligence
{as to which. sec Chapter 6, para 6.38). 1lic Court of Appeal held (31 1451)
thttl only an express tMtmctrwl "provhion of n direct cntillemcnt" of claim
264
9: Capacity and Privity of Contract
ag•m•l the promisor, such as the "duty of car< dted" m PnnntoMm will
pr<•'<nl the application of the Albauro exception. 'lhe third part1•s right of
achon 111 tort did not completely remove the legal black hole as a claim in
tort was suhjecl lo the third party being able lo u1ablish elements of the
1or1 (a> to the tort of negligen«, see, generally, Chapter 6) and subject to
certnin defences.
9.77
9.78
Significantly, lhc Cocorl of Appeal went on, o/litcr, to approve of the "broad
ground" and ils underlying rat ionale as being "more consistent with
principle" (at [52]). The court affirmed that the prorni>ee's right 10 claim
substantial d;n1agcs flowed from his not having received whal he had
bargoined and paid for, and which should no1 depend on: (I) whether
the promisee had ownership in the properly, the subjecl mailer of 1he
conlracl (at (53)); or (2) whelhtr lhe third party had a d1rcct right 10
claim against the prornisor, that 1s, wh<1htr there was any lc-g31 black hole
that needtd 10 bt filled {at [S4)). The courl nottd that probl<ms such
as doublt r<eovery against th< promisor bi• both the promisee and
third party could be guarded agamsl by the court {at [56)). Addition31Jy,
the court opined (at (S?J) that the promisee should not be required
to >how that he had carried out repairs or intended to do >O before he
WU> :1llowed to ch1im substamial damages. 111e Court would scrutinise
the reasonableness or each claim, Recent liigh Courl decisions have
applied the broad ground, fi nally confirming its •t•tus as law in
Singapore (sec Lci111ai1, Ricardo v Nollle Resourm Ltd (2018) at (85) and
Motor /1wmrs' Bureau of Singapore v AM General lnsm·anu Bhd (20t8)
al Il 33)).
ln Family Food Court v &nh Boon L«k (2008), the Smg•pore Court of
Appeal provided, in obiter, useful clarifica1ions as to the scope of 1he broad
and narrow grounds. some of which are as follows
o
Ihe lo;; recoverable under the "broad ground" mu•t
genuine and
1s sub1ec1 10 an ob1ec1ive lest of rcnso11nble11ess 10 pr<v<nl 1he prom1su
from obt'1ining o. windfall (at [53().
o
Lo»es recovcrnble for breach of contra cl, whether under the "broad"
or "narrow" ground, are subject 10 the u>1rnl lcgt1l controls on recovery,
1h11t Is, the need 10 sat isfy the requirements of cauSOl ion. remoteness,
mitigation and certainty {as to which, see Chapt<·1· 18, para 18.34
onwards) (at IS5)).
265
Pr1nc1plts of S1ngapor·e- BusintSs Law
o
The "broad" and "narrow" grounds cannot be applied simuhaneously
as they are concepiualli• inconsislenl (al ( 56)). Further, 1he ques11on of
when one ground should be applied instead of the other has yel 10 be
drcided by 1he courh.
(1 ) Collateral contracts
9.79
Sometimes. the courts are prepllred 10 circumvent the priviry rule through
the implication of a collateral contract. 'Ihis 111e1hod has been criticised as
being rather artificiol. An ol1 ·ci1ed example of its use is Slrnrrklirr Pier L()
v Detel Products /,D (195 1). 'Tiie defendants were pain! manufacturers who
had assured the plain1i1Ts, the pier owners, 1ha1 their paint would la>t for
seven 10 1en years. Rased 011 1h1s assurance. 1he plaintiffs ins1ruc1ed the
contractors whom 1hei• had eng•gcd 10 paint 1he pier, 10 purchase and use
paint from the defendants. 'I he contractor did as instructed. Unfortunately,
the paint only lasted three months. The pla1nhtfs successfully sued the
defendants even !hough there was no expr<S$ contract entered into betw••n
them. The court held that on the facts, it was able to imply a collateral
contmt in which the defendJnts had promised that their paint would last
for 5even to ien ye'1rs and m consideralion of this promise, 1he plain11ffs
hlld requested their contractor. to purch;se and use the ddendants' paint
for their pier.
(3) Himalaya clause
9.80
Another method to evade the privily rule is illuslraled in the cases of
Smmorrs Ltd v Midland Sllironcs Ltd ( 1962) and New &nlm1d S/11pp111g Co
Ltd v AM Satthcrwmtr & Co 1 rd (/11< Eurymrdon) (1975). This 1.chnlque
is applicable only lo enable a third party 10 rely on an rxm1ptio11 r/n11u
m a contract to wluch they are not privy. The 1.chnique emerged m 1he
con1ex1 of the sh1pp1ng industry in which a carrier of goods by sea M>ught to
<xtcnd the benefit of an cxempllon clau>e in their controct of carrioge w1th
the owner of goods ("cargo ownrr"). to third parties (usually 1he stevedores
employed by lhe carrier 10 unload 1he cargo owner's goods from the carrier's
vcssd). Such an exemption cl;usc is usuallr negotiated as a method of
allocating business ri>k> .111d the burden of i.nsurance bcrwecn the parties
involved. In the two
mentioned :1bove. 1·he stevedores had ncglige11tly
damaged the goc>ds in the course of unloading and thus were sued by the
cargo owners in the tort of negligence. In defence, the stevedores sought to
266
Principles of Singapofe Business law
Chapter 9: Capacity and Privity of Conttact
rely on the exemption clause contained in tlie contract of carriage to which
thry \\'('rC not privy.
lo be acting as agent o r trustee on behalf of and for the benefit o( all
pen;ons who are or 1night be his servants or ;\gents fro1n ti1ne to Hine
Perhaps in recognition of the commercial convenience of upholding such a
clause, if it was a legitimate one under the law, Lord Reid (at p 474) in the
Scrnttons case was prepared to
the third party stevedores to rtly on
the exemption clause if the following four conditions were satisfied:
shall to this extent be or be deemed to be parties to the contract in or
evidenced by this bill of lading.
(including independent contractors as aforesaid) and all such persons
9.81
In '/he F.11rymedo11. the defendant stevedores were a blo to satisfy the first
Lhrcc c.o nditions laid down by Lord Reid in Scrnttons. 1hc llimalaya Clause
above, contained in the contract of c.arriage of goods by se3 evidenced by
the- bill of lading, did dearly state that the exempt ion is also Lo protect n11y
servant or t1gc11t of the cartier iucludiug any independent conlractor fro'n
tinic to ti111c c111ploycd by the car'l'icr. The s.tevedore.s obviously fell "'ithin
this category. The ch\Use also made clear that the carrier contracted for the
exemption c.lause as agent on their behalf. As the carrier in this case was a
wbolli• owned subsidiary of the stevedores. tliey had the authority to act on
behalf of the stevedores. ·n,e court, however, engaged in some strained and
rather art ificial reasoning in finding that the fo urth co ndition was satisfied.
The)' held that there was a wrilntural col/atern/ co11t rn(I between the cargo
l1']he bill of lading lthc contract of carriage of goods by sea] makes it
clear that the stevedore is intended to be protected by the provisions in
it which limit liability, the bill of lading makes it clear thatt the carrier,
in addition to contracting for these provisions on his 0111n behalf, is
also contr:acting as agent for the stevedo1•e that these prO\•isions should
apply to Lhe stevedore , Lhe carrie r has authority froJn the stevedore to
do that, a.nd that any diilicuhies about consideration moving fro m the
stevedore '"ere overco1ne.
These conditions arc not easil)' satisfied. In fact, the clause in Scruttons it.self
failed to n1eet the four conditions as, an1ongs1 others, the clause 1nade no
reference lo t.hc stevedores at all.
9.82
owners and the stevedores analysed as follows: When the cargo owners
enlcrcd into the contracl of carriage of goods with the carrier, they rnadc
a 1.:1nilateral offer to extend the benl·fit of the cxcn1 ption clause to anyone
who unloaded their goods at the port of destination. 1he stevedores' act or
unloading their goods thus c.onslituted both Lhe acceptance of the otTer as well
as the consideration in return for the benefit of the exemption clause. And
this contract is collateral to the main contract of carriage o( goods between
1he cargo owr1ers and the carrier. Th is con1plica1ed technique rnay no longer
be needed now that s 2(6) CRTPA (and s 7(4) in particular reference to
n contract of carriage or goods by sea. or rail. road or air) enables a third
party a more direct method of enforcing an exemption clause in a contract
to whicli he is not privy.
The four conditions were fou nd to be s;ltisfied in the subsequent case of
771c F.u rymcdtm. 11,e exemption clause involved wa,< lengthy and elaborate
and is no\\1 known as the f·Hirnalaytl Clause): 111e dnuse provides:
II is hereby expressly agreed that no servant or agent of the carrier
(including. every independent contractor from lime to Lime employed
by the carrier) shall in any circu1nstances whatsoever be under any
liability w·hatsocver to the shipper, consignee or <nvner of !he goods
or to any holder of this bill of lading for any loss or damage o r delay
or \Vhatsoever kind arising or resulting directly or indirecdy fro1n
any act neglect or default o n his part while acting in the course of
or in connection with his employment :rncl, without prejudice to the
generality of the foregoing provisions In this clause. every exemption.
li mitation. condition and liberty herein contained and every right.
cxemptiol) from liability. defence and immunity of whatsoever nature
applk11blc to the carrier or to which the carrier is entitled hrrcundrr
shall also br available and shall extend to protect every such servant
or agent or the carrier act ing as aforesaid and for Lhe purpose of nil
the forego ing provisions of this clause the rnrricr is or
be deemed
267
(4) Assignment
9.83
If A assigns or transfers his right(s) under his contract with R to a third
pnrl)'. the third part)' will be able lo enforce those rights in his own name
against B. In Singapore, a legal assignment can be etTected under s 4(8)
Civil Law Act (Cap 43, 1999 Rev Ed) through rui absolute assigrunem or
the right(s) in \\'filing. signed by the assignor (A), at>d where wrillen notice
268
Pnnciples of Singapore Busintss Law
Ch•pttr 9: Capaclly ond Privily of Contra<!
of the assignment has been g1v<n to the other porty lo the contract (8). The
consent of B to the
i\ unnecessary. The ni3in diso.dvantage of
this technique to get around the privily rule 1s that the third party assignee
takes "subject to
any cbim mode by the third party upon B is
subject 10 such valid d<f•nces •s R may raise ogoinst A. An assignment
that docs not sot1sfy all the requirements under s 4(8) abo,·e may still
be elfectiv• as an oqu1tabl• ass1g11m<nt 1f thore 1s clear e\•1denc• that the
assignor drarly intended the
to h°' c the bcntfit of his right(s)
under the contract.
(7) law of trusts
9.86
Where • trust has been con<tituted for a third party's benefit, the law of
trust• will enable the third party to enforce the bene:fit against a contracting
party. The third party's right of enforcement is not based on conltact law
but the specialised area of the bw of trusts which 1$ beyond the SCOpt'
of lhl$ chapter.
IMPOSING BURDENS ON THIRD PARTIES:
TECHNIQUES TO
(S) Tort of negligence
9.84
t\ common techtuque to get around the difficulty of mounting an action
in contrnct b 10 make o claim m ton. Specifically. third parties h.-·e
sought 10 base their claim in the \Ort of neshgene< 10 get around the
privily ruk. For example. a
purcha«r of a condominium unit
finds defects appearing m the property and seek> to claim against the
developer in rc>pecl of his lo>S. ' lhe privily rule would preven t a claim in
9.87
purchaser h t1 third part)'
conlract agJimt the developer a> Lhc
to the contra.cl between lhc developer and original purchaser. For the
requirctnents h> !iuccessfully nlounl an action in the tore of negligence, see
Chapter 6.
(6) Agency
9.85
GET
AROUND THE P RtVITY RULE
Sub-bailment Co ntracts
An agent is o. person M lhodsed by his pri ncipol to enter into u contract
with another o n the princip,11'• beh:ilf. ·1he agent Is the party who negotiates
and conclude. the C<IOtrJCt with the intention 1hat his principal (the
oslcnsible third party) should be entitled to the rights and obligations under
the contract. Where the other party is well aware th•t he is negotiating
with an agent. no problem of prlv11y arises for the ostensible third party
principal. However. where the agenl
10 dtsclo<e that he 1s acting for a
principal. the princtpal may. m certain circum,tances.
•sscrt hi$ rights
under the col\tr;lC\ wnh the other party. Hert. the law of agency appears to
permit the pmlly rule to be mcmnvcntcd b) the 1h1rd pani• undtsdosro
princip•I (sec Chapter 20. p;ru 20.35 onward' for • fuller d1scu,.,.io11). 11us
i• not so much a technique employed 10 get around the privily rule 3> an
incident of the law of agency.
269
l)'picall)'· a ba1hncnt arises when an owner of goods ("bailor") part>
wll h the po.session of hi< goods by delivering them to another person
("bailee") to hold for a time or to have something done to them before
returning pO»C»1on of the goods 10 1he bailor. An example is where
jewdlery is taken to jewellers for repair. A sub-bailment ames when the
bailee, In turn, bails the some goods to a sub·baile-e-. The relevant que.tion
Is whet her tl third party (the bailor) is burdened by an exception clause
rnnt:iincd In the sub-bn1l111ent contract between 1he contract ing parties
(the bailee and sub-bailee). "lhc an,wcr is that if the third party b.dlor
hti- exprc&>ly or i111plicdl)' consented to 1hc terms of the sub-ballmcnt.
then the bailor con Indeed be bound (see Morr·is 11 CW Mnr1111 & Sorts I.Id
( l !166)).
Land Law
9.88
A lhml party may be bound by a restrictive covenant contained In a contract
for the ule of land between the contracting parties (see T11/k v Moxliay
(1848)). This principle
unique to land law which is beyond the scope of
th1> chapter.
Unlawful Interference with Contractual Rights
9.89
If :i third puty knows that t\ and 8 h3\'C contracted with one another. the
third puty 1$ under an obligation (burden) not to induce euhor A or 8 to
his contract with the other. This 1s an obugation imposed by the law
of ion (tort of inducing a breach of contract. discussed in Chapter S) rathtr
270
Chapt<i 9: C.pa<ity ond Prlvlty ot Conh•<l
thon by the contracting portoes ond as such, is not strictly • lechnique to
evade the privily rule.
C ON CLUSION
This page i11te11tio11ally left blank
9.90
A business person cntenng into a contract would naturally be concerned
that rights and obligations that had been promised can be enforced. An
understanding of the law that hm1lS the capaoty of parties or entities to
enter into contracts os therefore useful so risks can be assessed and steps
taken to protect one's position. For •xomple, contracts to pro,ide minors
with education or employment should be properly vetted to ensure that the
t<rms, as a whole. benefit the minor.
9.91
Third parties to a contract would also be concerned about b.,ing able to
enforce benefits conferred upon them in contracts to which they arc not
privy. As the ca1e llluwatlons in this chapter show, this may occur in the
commercial or personal sphere. 'I he CRT PA would assist most third parties
seeking to enforce such benefits. e>peciulli• where the contracting parties have
made their in.tcntlons clear. However, beCJuse the CRTPA does not apply
IO CC'flllin types o( COl\lrt,ClS, and Ol Ot<.' iJn porlantJy, pern1i ts contracting
parties to exp ressly exclude its llpplicution, a th ird pt1rti• may still need to
resort to othe r except ions to ihe privily rule. The law governing the right
of a promisee to claim again>! the promhoo· for >ubstantial damages on the
"narrow" or "brOlld" ground Is lmporttull in this regard.
9.92
Finally. the third part)' >hould be "'""• that there could be instances where
he may be legally burdened by an obligation contained in a contract to
which he is not privy.
271
Principles of Soog•po<t s..,;ness Law
Chapter 10
Terms of the Contract
10. 1- 10.5
10.6- 10. 14
I 0.15- 10.22
I0.23- l 0.25
l0.26
10.27- l0.28
l0.29
10.30
10.31 - 10.34
10.35- 10.40
10.41 - 10.48
I 0.49- 10.51
10.52- 10.53
10.54- 10.55
IITTRODUCTION
10.I
Introduction
The Paro! El<idenu Rule
The Interpretation of Contracts
Terms and Representations
Introduction
Request to Verif)'
Importance of the Statement
Tirnmg of the Statement
Oral Statements and Written Contracts
Special Skill and Knowltdgc
basi,.
10.2
In order 10 improYe contr.iClual ctficQcy, 1he firM obj«tive 11 10 promo1e
cer tainty •nd predictability of contractual undertakings. 1hus, as p.rlles
usu ally make many stalements during the negotiations lending up to the
conlract, t he law provides rules lhat help separate the statements that arc
in tended lo become contractual obligntlons from ones t hat arc no t (>CC para
10.23 o nwards). Where parties hnve not expressly addressed a matter in the
contract, there are rules for implying terms 10 fill sud1 gaps (see pa1a 10.35
onwards). 1 here are also rules for protecllng written contracts from b<.mg
undermined by elllrinsic evidence. 1ha1 1s, evidence of purported terms
that art not found within 1he document m which parties have recorded the
contract lerms (see para 10.6 onwards).
10.3
1he >Ccond objective is to i11tcgrittc socilll and public intcrc•t policies
in ccrtnln types o f contracts so that these contracts will be peoformcd in
conformity wit h such policies. In this regard. the next chapter discu.scs the
circumstances under which the law intervenes to limit the enforceability of
Implied Te mu
Terms Implied in Fact
Terms Implied in Law
Terms Implied b)' Statute
Terms Implied b)' Cu>tom
10.56-10.62
10.63- 10.67
10.68 10.78
R<lative Importance of Terms
Conditions, \Varnnties and lnnominale Tt'rmS
Classi f)ong Terms
The Right 10 Terminal< the Contract: the RDC Co11rrttc Qualified by
Sports Co1111ectio11 Approach
10.79 - 10.80
Conclus ion
After cnt<ring into a contract, the parties may subsequently diiagree about
what they have agreed to. '!he law o n conlractual terms provides rules on
how to resolve this d isagreement. 111e rules help 10 ascertain the precise
obligat ions of the parties to a controct. Once the<e have been a>eertained,
tht rules provide for the manner on which such obligations should be
categonscd, in order to determine 1he remedies a''atlable upon a breach.
Jud ges have developed most of these rules but important statutes, such as
the Sale of Goods Act (C:ip 393. 1999 Rev Ed), also contain rules on the
subjeCI. The law on con1racrual terms attemp1s 10 achieve several objectives
designed to promote "contractual efficacy", which generally refers to enabling
the- contrt1cl to be carried out as intended by the contracting par ties. In
applying t he rules, the courts must nbide by the principles that first, the
courts do not 111ake contracts for the part ies; and second. 1hc
role
is to find out and give effect to the intentions of thC' par1ics on an objrtti1·e
term• 1ha1 anempl to allow one party 10 ('5(3pt fro m liability for loss or
d•mage cau;ed lo the other part)'.
I 0.4
Fmally, the law recognises tha1 par toe; 10 a conlr01ct may not regard aU
its term< to be of equal importance and therefore pro,1des remed1e; that
274
Chap1e1 10: Tef'tns of tht Co11uac1
10.S
reflect thi• In the e\'ent • term 1s breached. For «•mple, for breach of an
important term or ont that rosults in tht innoctnt party being dtprived of
T HE P AROL EVLDENCE R ULE
a
the option
10 .6
to tcnninate the contract. 1n addiuon to da1ming conlpen$ation. Hol\·ever,
fo r breach of • minor ttrm o r one that dots noa dcpt1ve the innocent
party of t1 substantial benefit, 1he innocent part}' mus! Mill perform the
contract but may receive con1pensation for that breach. Jn 1lus ·way, the la\\r
pro11101cs contractut1I dlicacy b y crcaling a hierarchy o f obliga tio ns within
ahe contract iLstM. so thaa b reaches of minc)l' oblig111ions or o nes tha1 result
in 1ninor
will no t pcrn1h the destruction of 1hl"' transactjon
by allowing ah c innoccnl par ty to tcm1inatc 1he conlracl.
Where the parties havo aaktn the step of puttmg tlwr contract m \>Tiling,
raising the reasonable pre>Umpllon that thry inttnd th t document to contain
all the terms of the contraca. ahe parol evidence
prohibits <llh<r party
from auempti ng to displace the c1m1ents of ahe wriuen contract by rtftrence
Lo evidence ouaside of (or extrin>ic to) thr docum r nl. Jn Singapore, the
parole evidence rule Is codilicd In > 93 of the Evidence Aca (Cap 97. L997
Rev Ed ) ("EA").
10.7
'icdmicall)'. "parol" evidence refers 10 evid ence
any "oral" agreement
or s1ate111en1. In pracaocc, the parol evidence rule has also been applied
to exclude evidence not orally made, for example, evidence ol terms
recorded in anoahtr documtnt not spcci6cally referred 10 in the writttn
contract. A hule refltction .hows why pracllcal con51dcrauons rtquort thu
rule. Without this rule, the wnnen contract may not be worth the paper
ii is written on, ond uncertainty would resuh. For example,
a
company omendong to borrow 111one)' from a bank attempt> 10 prove ll>
benefit. the law permits the innocent par1y 10
The dlscu»aon thal foUows addresses four group< of circumstances that
1ypically 8"'' me to disputes O\'er con1ract term<:
(I) A and 8, who engaged in pre con1ractual nego11a11ons, concluded a
contract m wt1tmg. A discovers thaa what she thought had btm orally
agr«d with 8 is missing from ahe wrmrn conar.ict or thaa some other
term conlrad>ets what she 1hough1 wa• a "erbal u nde,.tanding. In a cou rt
trial, IS A permilled 10 submit proof of aht oral Qgr••cmtnl ac conarndica,
vary or add 10 the terms in the wriuen contract? AJdilionally. whaa
meaning s hould be given 10 ahe aemu of a wriuen conaracl, ahat is. hQw
>hould ahe terms be in terpreted? Can A or IJ ask ahc court to consid er
1naucrs not contnincd in the "'' f'i11en contract. such as statc1ncnts rnadc jn
the pre-contr.lClual negotiatio ns or earlier d rat1..< of ahc written conlract,
lo Jcddt w h.1t the parties had agreed on!
by $howing 1hc exi!lence of a profitable con1111ct with
another party. Relying on the wrillcn contract, the bank approves the
loon. The bank would be ncgotlvt'ly affected If the cash flow nnlicipaaed
under the written contrnct were lo be
hy ahe opemtlon of 1crn1s
nol found \\1lthin it.
I 0.8
(2) During th t negotiations that pr<eedcd the contract. A made certain
d•ims on respect of the product or ser'''" to be sold to B. After the
cantuct i< concluded, B linds that the claim wnh regard 10 the product
or service thal she regorded as important prO\'CS to M fa1'r. Can 8 allege
that •uch >tatement IS a part of the contract and
A for breach of
contract?
(3) The term; of ahe conar:tct do noa carry equal weight. How ,foes a cou rt
determine which ternb give rise to 1nort extensive re1ncdics upon
brcoch? Whai fociors o r circun»lancr,
dc1crn1ina1ion?
(lrC
rclcv,int in thi5 process or
(4) Where thC' contrnct does no a p ro\'id e fo r :1 part lcula1· cventuo lily. how do
the courts "fill in the blanks" and what principles do ahcy use to do sol
275
or
Applird r igid ly. howc1·cr. the paro l
rule con produce great
injllstice 1ha1 could outweigh ahc benefits of certainty. In England, iudges
have drnsed exception< 10 rcducr injuslJces th:>t may flow from an
unwa\'tnng application of the rule. A CO\'crnge
the Engli>h common
law exceptions ts M)'Ond aht scope of ahas chapter. h suffices for tht
rrader to know that Singapore hJ< codified a number of the Enghsh
exceptions in s 94 EA. adopllng >Ome as the)• were and other. w11h 'ome
111o dilica1ion.
or
10 .9
Turning our au ention to the Slng.iporc p rovision>. s 93 EA slates that "when
the- tern» of a c611tracl ... hove been m iucccl by ... the partic> to the form
o f :a docum ent, .. . no cvillencc .<holl be g iven in proof of the terms of ;uch
conarnca ... except the document il<elf, or second ar y evidence': Secondary
c\'idcncc refers to, irJl(•r 11//11, cert ified, electronic or o ahcr types of copies
of tl1c original documena (,ee s 65 EA) and is 1101 excluded by ahe 1ule.
276
Principles of Singapoft Business law
Chapter 10: Terms of rht Conrrac1
Section 94 states that "when the terms of any contract ... have been proved
according to seclion 93, no evidence of any oral agre.e n1ent o r statrn1ent
shall be admitted ... for 1he purpose of coo1rndicring, Vllrying, adding 10, or
subtracting frorn its tern1s': subjec;t to certain exceptiQns (for the exceptions,
sec para 10.14).
10.10
10. 12
\'\"here an ''entire agreernent clause') is inserted into a written contract,
is an express indication that the pariies intend the , ... ritten
to embody their complete contrac1. A 5imple version of such a clause
can be fou nd in lee Circe Wei v Tarr Hor Peow Victor (2007) at [21] as
follows:
..Ihis
sets forth the e ntire agrcc1nen1 and understanding
behvecn the Parties in connection with tht n1attcrs tleah 'vith and
The Singapore Court of Appeal in z,,ric/r /11surn11ce (Singapore) Pte I.Id v
8-011/d Interior Dcsig11 & C-0nstructio11 Pie Ltd (2008) explained t he interplay
b<Lwecn ss 93 and 94 EA (at 1711) as follows:
Section 94 complements s 93 by ensuring that where the sole evidence
of a contract consists of "the document itself" (per s 93). that contract
is not varied, contradicted, added to or subiracted from unless the
circu1nslances described in one or 111ore of the six acco1npanying
provisos (ie, provisos (a)-(f) to ' 94) are satisfied. Put another way. it
is
sa id that s 93 makes documentary evidence oxc/1<sivc while s 94
makes it couclusivc , ..
described herein.
I 0 .1 3
The Singapore Court or Appeal in lee Circe Wei held (at (25]} t hat entire
agreement clauses generally promote certain ty as t h ey "define and confine
the parties' rights and obligations within the four corners of lhe written
document thereby precluding any attempt to qrwlify or s11pplcmr111 tire
tlocr111re111 by reference to pre-contractual representations." (emphasis
added) However, the exact effect of an entire agteement clause depends
on the interpretat ion of the clause's precise
and context (at l2SI
and 1351). The effect of t he clause may simply be to confirm the parties'
[emphasis in the original]
intention that the written document should contain all the terms of
I().)
I
lh(.'· agrcerncnt (a prrrequisite to the application or the paroJ evidencr
The court also helpfully explained the approach lo the application or <S 93
and 94 (at I J3.2J):
ruk). It could also be worded to exclude Lhe application of the except ions
lo t he parol evidence rule altogether (al [30 J-l 35J). Should Lhe clause
have the latter effect. it might be subject lo the :regulation imposed on
exemption clauses (at (36]-139)). For the regulation or exemption clauses.
sec C hapter I l.
.. . If the court is satisfied that the parties intended Lo C'11body their
entire agrcenlent in o written contract. no extrinsic evidence is ad1nissiblc
to contrnclict. vary, add to, or subt ract from its 1enns (see ss 93 -94 of
the Evidence Act). In determi ning whether th e parties so intended, our
courts may look nt extrinsic evidence and apply the norrnnl objective
1es1, subject to a rebuttable presu1nption Lhat a contract 'vhich is
complete o n ils face was intended to contain all the terms oi the parties'
ag.rccmen1 ... In general, the court o ught lo be more reluctant to allow
extrinsic evidtnce to affecl standard forin contracts :lnd co1nn1ercial
docu1nents ...
Thus, before decid ing if the parol evidence rule applies •l all, the coitrl will
fiist have to examine the facts sunounding the making of t he contraCI to
decide it, on a n objective basis, the cont racting parties intended the written
contract to comprise all the terms of the ngrcemcnl. In light o{ the greater
need fo r certa inty in the commercial context. the presumptio11 • h;it such an
inte ntion exists would be nnteh slrongcr, requiring correspondingly slronger
pl'oof for rebttttnl.
277
10. 14
Section 94 EA lists six sets of
in which extrinsic evidence
could be introduced in court despite the existence of a written comrnct.
Such evidence could be used Lo add to or vary the terms of the wrinen
contract. to challenge the valid ity of t he contract or ascribe meaning to the
written ler1ns:
o
Proviso (11) permiL< a contracting party to challenge the \•alidity of the
by
through extrinsic evi:dence, that the contract
written contract
was the result of a vitiating fo"or (eg, incapacity, misrepresentation,
m istake. illegality, ctc). or was affected by a hick of consideration, etc.
o
Pro11iso (/I) permits proof of a separate or.ii acrccment (or colh1t<-ral
contract) pertain ing to any n1atter on which the written conlract is
silent. nnd
is not inc:onsislt nt with tenns of the.- written contract.
278
Chap1e1 10: Tef'tns of tht Co11uac1
Several points should be nolM about 1h1< pro'l'lSO. First, for commercial
certa1nt)'. the courb •re grnerally reluctant to find that a collateral agreement
The (wnuen contract! h .. .. . a high degree
cKists alongsid e ii main, written contraCI. The fam m11.11 ckarl)• show
that •ll the legal elements for a \'olid (collaler•ll contract are present (see
Dy1111sty Lmt Ltd (i11 liq11idatio11) v S11ka111to Si11 (2014) • t ( ISJ). 1he party
alleging ii> cxi;tcnce bears t he burden of proving 1ha1 both parties intended
10 create " leg ally bind ing collateral contracl (see /,cmmr Gm>S Pte Ltd "
Per111111k1111 Plricc Complex Pie Ltd (2002) al I l 16)- l l 19)). For exam ple,
a flnt owner could have assured a potential 1crrnn1 orolly th ot 1he llat had
their rcsp«tive ngh1> and
been painted \Vith n1ildev.• reslstan1 pain1 of a c:crt:,in brand bu1 1he '''ritten
tenancy ag1·ec111cnl d id not contain a ttrm 10 •Uch <•ITecl. To prove that
1hc or•I a«urance was a term of a separote or.I agreement that existed
alongside 1he wriuen tenancy agreement, the tenant would need to show
that the Oat ownrr had made the oral as;urance mtending for it to h"·e
pronu<Sori• effect, •nd that but for this
the tenant would 1101
ho\'t entered i nto the nmn. wriutn contract (the ttn•ncy agr<'emenl). Th<
tenant mu>t •lso ha\'e providcd considrration in rrturn for the Oat owner5
oral n;surancc or pronme but this is easily proved. The 1<11ant5 act of
enlermg into the mom. wrinen contr3Ct (the tenancy ogreemenJ ) constitutes
Jhe rc<1u ired con>idcration (see Li·mo11 Gmss ot I 1191).
Second. the tCl'llb o r the collateral cont ract must 1101 be incom islcnt with
1hc tcr ni. o r the writte n coniract. 1l ius, in l.Atltnm Scott v Cm/it S11isse
Fim 8osto11 (2000). Lhe Singapore Court of Appcnl 1·rfu,cd (al (2 1]-(22])
to ad mit cxt rimk evidence of an oral ogrcement pertaining to :i xunrnntced
bonus. alleged to have been made during p r io1 nego11ations. to contradict
the wriuen employment contract that pro'l'ided for a 1lisartin11nry bonus.
Fmall)'. the degree of formality of the wrmen contract n<M• 10 bt cons1de.M
in deciding 1f th< oral a>Surance is inconsi>tent with 1ts terms. drspite thr
wruttn contmct being silent on the matl<r COHrcd by the oral ;wuranct.
Th< Court of Apl"'•I m Ng l.ny 0100 Ma,.011 1• /o/,; Im 01 (1995) cons1dertd
thi> prcc1>e question. ·1 he term> of• writlcn contract required the apl"'llanl
to 1r.1nsfer her mtcrtst in four insurance policies 10 the rc&pondent, in
return fo r lhc re.<pondenl lransferrmg ownership ln lln apart m ent to her.
Subsequently. the rc.pondmt alleged thnt the nppcllnnt hnd al;o orally agreed
to t r.111>f<·r 11 Ctll' lllld d LJb membe rship to the rc·spondent, in re tu rn fo r the
npart mcnt. 1 hc cou rt held that the alleged ornl agreement Wll> Inadmissible
ns cvidcn<c un der proviso (b) to s 94, os il MIS ineonsi;tcnt with the wrillcn
conlroct for the followinij rca>Orh (al (IS)):
279
o( formaluy and clearli•
indicates 1hat the part1h intended fit) to contain a full de;cr1ption of
The (bTincn contract! \\OIS
by ... a pr•cticmg sohcuor, on mstrucuons from (the respondent! •nd
in consultation with (the respondent'.> son!. All of them were fully
aw;ire at the rnntcrlal time or the alleged subJe<l man ers of the oral
(agreement] and if t hese had been agreed at that time they woLJld have
been i11corporn1ed in the (written cont ract(.
This app ro ach h•s been endorsed in sub.cquent court decisions (sec, cg, First
Asia Capital /11vestmc11ts Lttl v Socletc Genernlc Bnnk & Trust and mrotlrer
(2017) al [42().
o
Proviso (<) perrnits proof of a separote oral agreement that lay> down
a co11d11ion preutlmt for the auachmg of any obligation m a wrutcn
contract. For txamplc, 1n respect of a wrillen contract of employment,
the parues may have •«rbaUy agreed that the con tract would come mto
exis1ence only if the emplO)'te obtams her professional qualrficauon b)' a
certain dale. Evidence o( thl> oral •gretment is admissible 10 show thot
the wrinen contract
not yet come into existence 1r the employ((
falls
to obtain the qualifica tion by t he specified da1e.
o
Proviso (d) perm hs a part)' to odduce ext rinsic evid ence of n subsequent
oraJ agree1ncnt to rescind or 1n0Jiry any tcrn1(s) of an existing "'rhtcn
contract, if there is no lnw requir ing the sLJbscqucm rnodit1ca1io11 to
be in writing. 111e foc hrol scenarios in St1/k v Myrick and IVil/rnms 1•
Roffry (see C hapter R, p>r3> 8.32 and 8.35 respectively) art cxamplos of
ins!Jlnces where a term of an cxhttng wrinen contract was subsequent I)•
modified. C'l'rdence of which would be admissible m court in the event
of a dispute.
o
Proviso (<) alloW$ a party to offer extnn.sic noidenc• to demon.strate that
a particular custom of the trade mu>l be implied into, and therefore
become part of, the wrlnen contract except wher< thi1 tS 1ncon•l,1en1
wi1h its express terms (see par. 10.54 onwards on term$ impheu by
custom).
o
Proviso (/) permits the in troduc1lo11 o f extrinsic evidence 10 illum i11:11c
the rnenn lng to be nsciibcd 10 the written 1erm s in the co111roetunl
document (sec para tO. IS onw.rds on how t his p roviso operates and the
contextual approach lo inlcrp rctntlon o f t he wri llcn term s).
280
Principles of Singapofe Business law
Chapter 10: Terms of rht Conrrac1
11ie above criteria accord with the ultimate goal of interprelation which
is to ascertain, objecavely. the c:o111t·x1ual 1nea111ing of expressions or
words used at the time the contrne1 IYllS 11111de (see Zrrricll /m11mnce at
T HE INTERPRETATION OF CONTRACTS
10. 15
In Zurich Inmmncc, 1he Sini;apore Court of Appeal clarified the law on
'\vhcther, \Vhen and to
extent ex1 dnsic evidence rnay be ad1ni1tcd for
J1251- 1126J). This involves considering what those expressio ns or words
would 111ean to a. reasonable person having a]) relevant background
knowledge that are available 10 the contracting parties at die time of
contracting (sec Hewlett· Pncknrd Singapore (Sales) Ptc Uri " Chin Shu
llwt1 Corrinn (2016) al [SSJ).
purposes of interpreting a wrinen contract . . ." under proviso (f) 10 s 94
(sec I 109)). The Court of Appeal went on to supplement the clarifications
in Sembcorp Mnrine Ltd v PPL Holdings Pte Ud (20 13) and subsequenl
decisions (most recently in Um Sze Eng v Lin Choo Mee (20 19) at [60)162 1). TI1ese are smnmadsed below:
o
1llc .starling point for interpreting the v1ri1ten words of a contract is
always to consider the plain language of the contract/term (see Y.E.S.
FC.B Gro"p Ptc Ltd v Soup Restmmmt Singapore Ptc Ltd (20 15} at (32[
and l11rky RMlty Co Pte lid v HSBC Tmst<C (Singapore) Ltd (2016)
at 121).
o
In addition, 1he courts may consider extrinsic evidence of context
'1dmilted under proviso (f) to s 94 (see Zurich lnsurnncc at I 1211). Such
exlrinsic evidence can be- ndn1ittcd even if tJ1c plain language is neither
ambiguous nor absurd. This is because the plain lnnguage, when viewed
against the factual context in which the contracl \\'3.S n1ade, 1nigh1·
then become ambiguous or absurd (a phenomenon the court called
a "latent ambiguity", sec paras l 0.18- 10.20 for t1 case illustration).
' l11e court would then be entitled lO decide that lht· term meant
so1nething different fron1 what its plain language ,,·ould appear to
suggest (see Zril'ic/1 lns11rn11c:c at I 130)).
o
o
Where there is a .. latent ambiguity .., the court may consider the contracting
parties' subjectivt: intent, that is. the parties:'
understanding o(
the term/agreement (see Zurich /11s11ra11ce at I lJ2(d)- (e)j). However. this
is o nly permined if the ambiguity cannot be resoJ,,ed by reference to
objective J{ictua1 circun1stances surrounding the nlaking of the contract
(see Se111be-0rp at 155]).
o
111ere is no absolute b:.tn on tldrnilling extrinsic evidence of
negotiations" or "subsequent conduct" under pl'oviso (() to s 94, but
such evidence would often be inadmissible for failing to satisfy n//
of the required criteria (see Zurich /nsrrrmrcc at ll32(d)(). Evidence of
pre·contractuai negorialions (eg. the earlier drafts of the written contract)
would often not relate to n dear nnd obvious context. a.s the bargaining
process invariably involves a changing or positions and the "addition,
ren1ovnl or variation of any contr;.t, lunl ter1n" (see Xt'a Zlicugyau "
Geng Clrr111gqi11g (2015) al (65J-(66)). Admilling evidence of the parties'
conduct nftcr the contract
made, is co ntrov.crsial. Such evidence is
usually not helpful for shedding light on what the parties intended 111
tire tirue the contract was made, and cnn also he too conv<'niently raised
to support the preferred interpretation of a dispu ting p'1tty (sec Y.E.S. at
[73]-[74): sec also c;1se illustrntion at para 10.21).
I lowC'ver. Lhc court should only admit and consider ext rin5ic evidence
that meets n// of lhe following criteria (see Zurich /11srirn11ce nl [125] and
[ 128J-( 129J):
evidence that is relevant - in that it "would affect 1he way lhc
language .. . would be understood by a reasonable 1nan";
o
evidence that is "reasonably avaih1ble to all the contract ing parties•
at the 1i111c of contracting: and
evidence that relates to tt "clc::ir or
contex1•' - th:ll is.
a context tJ1ut permits an objective determination of what the
contmrting parties intended the term to mean (sec Smifc Inc Dt 11t11/
Sul'gccms Pie Ltd v L11i A11rlrew Ste1vtirl (2012) al 1431).
281
10. 16
Finally. the extrinsic evidence should only be "used lo explain and
illu1ninnte the \\rritten '''ords, and not to contradict or vary lhem., (see
Zrrrich lns11rance [ 132(()]; see also case illustr'1t ion at paras l 0. 16- l 0. 17).
1l1e court's task is not to "rewrite" 1he terms of the controct. Extrinsic
evidence of context cannot be used ns an excu.se to achieve \\1hat the
court subject ive!)' co nsiders lo be fair (sec Y.E.S. at 1321).
To illustrate the applicalirm of some of lhese principles, a few cnses are
co11sidcrcd. In Zurich /11s11m11ce, Mcdh1corp Pie Ltd ("Mcdiacorp..) engaged
R-Gold Interior Desig n & Conslruction Pte Ltd ("ll·Gold") to carry out
282
Ptu1ctplts of Smg;;iport Busintss Law
Chapter 10: ltfms of tht Contract
maintenance, repair. addition and aherallon \\·orks 3l its premises as
Court's decision on the following grounds:
and whtn rcquittd for a stattd period. A contract ltrm rcquirtd 8-Gold
10 obtam
of insurance mdcmmfymg Mcd1acorp. R·Gold 11sclf
and oil its sub·contractors against damoge lo p<r.ons and propeny, for
Workmen's Compensation and
II-Gold approached its Amrrican
Internat ional Group ("AIG") insurance agent. Lee, 10 obtain the necessary
cover. As AlG did not provide such cm« r, Lee wos asked to help opproach
other in>urnnce componirs. Lee contacted a Zurich lt1H1rnncc (Singapore)
Pie Ltd ("Zl") ii1su111nce agent, Long. to Inquire. Upon receiving Long's
positive reply, Lee foxed to ZI (through Long) lnil lol instructio ns together
wilh II-Gold's conlrnct documents with McJ lacorp. Lee later faxed on
undatc<I note 10 Long requesting, 1111er 11/in, a Con11.c1or's All Risk> ("CAR")
policy cover. Thi< led 10 ZI issuing 8 ·Gold a CAR policy, which, as is evident
from il> terms bdow, did not littrally cover "all mlu"
o
since the parties did not dispute that the pohcy documtot conlatncd
thtir complete agrctment. the puol c•<idenu rule in s 94 EA apphed
10 exclude extrinsic evidence from contradicting. varying. adding to or
>ubtracting from the terms of the policy (at [ 134 )).
o
the High Court was not permitted to deny effect to • whole exclu>ion
clause as it amounted to varying the terms of the policy (at [134J).
o
Sccuon II co•-ertd the damages 8-Gold b«ome< lmble to pay to third
p•rtics (cg. Mtdtacorp) upon "accident•l loss or d•mage to third panics·
propcny" occurring in conneC1ion ""th th• contract works, tn the
abs•ncc of any applicable exclusion.
o
Spcetal E.xclu,ion Clause 4(b) excluded covcras• of the contractor's
(ll Gold's) "liability consequent upon loss of or damage to propeny
belonging 10 or held in care, custody or control of [i111u nlin. Mediocorp]
o even if the t-ligh Court had cng.1gcd in a contextual interpretation of
clause 4(b) and relied on extrinsic evidence of context admiucd under
proviso (f) to s 94 l:A, the evidence was wrongly admitted becau;e ii
did nol relate to a deJr and obviOU> context (al ( 135)). The court found
Lee and Long's <vidrncc on how the policy cam• lo be 1>sutd to be
unclear as to: (I) what Lee and Long actually communicated to
one another concernmg th• insurance co•-cr rtquired: and (2) what
circumstances led l.tt to request for, and ZI to providt a "CA R" pohC)'.
especially whtn Mtdiacorp's contract had not c:11ltd for a "CA R" pol>C)'
(at [135)). lhe rtader should note that L« and Long's evidence wttt
>ubmi11ed to coun by way of
&iatements in writing (called
"affidavits") and they we1c not present in coot'! during the trial to be
cross-examined on them.
10.18
B-Gold's s11b·c:on1rac1or negligently caused n fire at Medi:tcorp's premises.
Mediacorp •ucces.rully sued 8-Gold, who then mitlnted on action against
ZI. claiming u nder the policy for an indt111n11y of the damages il would have
to pay Med1acorp.
10. 17
The Otstncl Coort held that daust 4(b) clearly excluded ZI from liability
to mdem111fy R-Gold On appeal. the 1ligh Coun rtfustd to give elf«l
to clau>c 4(b). dc.pilt its btcral mtamng. in light of the factual context
the i»uc of the policy. 1hc 11 igh Court noted (ol [47) and
155)) that th• >pecific coverage 8-Gold required had been made known to
Zl when the contract documents with Mcdiacorp were sent to ZI. B-Gold
having depended on Zl to provide the nece8'ary cover. the 1ligh Court fell
(nl [SnJ· 1601) that fairness and justice rcquii·cd lhnt an exclusion clause
which purported to exclude the precise cover expected, should be denied
lcg•I ctlcct. On furt her appeal. the Court of Appeal overturned the High
283
Thr Singapore Cou.rt of Appeal decision in Sm11/nr
11 Pnrkw11y l/os1
1itnl1
Sir1g11pore Pie U ri (trmling 11s Moun/ Elizabctli f il>spitnl) (2007) provides
an illustration of "latent
Sandar Aungs molhcr was admillcd
to hospitol to undergo 3 medical procedur< called an angioplasty. On
admission, Sandar Aung •igned an tstimate of hospit•I charges that
ind icated a total esltm•lcd cost of SIS,227.30 for th.. angioplasty procedure.
She also signed the hospital'• <t•ndard form contract that cont.,ntd the
hospttal's pohetes and term< of SCl'\'tce, and an undenaking agreeing to be
jointly and severally hable with the patient for "all charges. expen<c< and
ltab1ht1es incurrtd by and on behalf of the patient" ("the Undertakmg").
As it turned out. unexpected compltcations de,.eloped as Sandar Aung's
mother was recovering from lhc ongioplasl)'. This inflaled Ilic final mcdicnl
to tl >11111 much higher than that Indicated in the cMimnte. ' lhc
court had lo decide whether. under the Undertaking, Sandar Aung was liable
for nil medical expenses incurred or
for expense> that 1·datcd Lo the
angioplo>ly.
Chap1e1 10: Tef'tns of tht Co11uac1
10. 19
The court explained the rationale for a contextual approach to mterpmation
of contnct terms (at (291):
No conlr.1cl rxists in a vacuum and, con>equcntly, 1ls language must
be construed in the context in which the contract concerned has been
made. We would go so far as to state that even if the plain language
of the contract appears otherwise clear, the construction con>equcntly
plnced on such language should 001 be inconsl•tent with the context
in which the contracl \Vas encercd into i( thls context is clear or even
obvious, i.mnce the context and circu1nstonccs in which the contract '''as
made would reOect the intention of the part ies when they entered into
the cnnt rnct and utilised the (contractual) language thei• d id. h might
well be the co;c that if a particular con>truction placed on the language
an 11 gaven contract is inconsistent '''ith ,,·hat
the obvious context in
which the contract '"'as made, then that cons1ruc11on 1n1gh1 not
as
clear as was initially thought and might. on the contrU)'. b.- C\'idcnce of
an ambigu ity.
th" other shares, after sht had tnnsferred half her share m Componi• X.
The coun held that tht ev1dene< was equi,·ocal and unhelpful to ucenaln
1he parties' intention at 1/1t 11111t of comrnctmg - the apptllanfs macuon
could have been due to her ignorance of the legally prudent cour>e of
action. since she h11d nor received advice on her legal rights at the ume (see
(72 1-(74J).
10.22
Before moving 011 to the ncxl sub·topic 011 terms, lt should b'' mentioned
that >In "entire llgrccmcnl cltlU>e" Will usually t10I exclude Lhe admis;io n or
extrinsic cvi<lencc 10 aid In conl raclunl interpretation under provl;o (f) to
s 94. As mentioned in para 10. 13. an "entire oi;reemcnt clause• that exprcs;ly
excluded the operation of provbo (f) could be subject to the regulation that
is imposed on exemption clausts (•« ue Chee ll'ei at ((41 J).
T ERMS AND REPRESENTATIONS
Introduction
10.20
h Wa• ari;ued that a plam reading of the phra>e 111 the Undertaking ·a11
charge>. expen;cs and liabilities incurred by and on behalf of the patie11t"
clearly referred to nll charges for medico! services rendered. However. the
court, aitcr co11sldcring ext rinsic
pcl'loining to the f:.lctual context in
which the Undertaki11g was sis ned - in this l11stnnce the e•lhnMe of charges
fo1· the angioplasty - concluded thnt the phra>e ill the U11derhking could
abc> "1C(lll all clrnrges, expense> and liabilitie> i11 rrsprct of the n11gioplnsty
prorrdurr, thus reveali11g a Intent ambiguity 111 what had ut fir<t apparent!)'
been clear words. The court went on to hold (at 118)) that the narrower
interprei.tion of the phrase was worranted siven the ck•r contc-xt m which
the UndertJki11g was sig11cd in the fil'SI place.
10.2 1
In Xifl Zltt11gym1, the court refused to admit evidrnce of a contmcllng partys
·.ubscqucnt conduct• lo interpret thr term m d1;pute The is>ue concerned
what the trrm required the respondent to tran<fer to the nppollant m return
fo r $ 1.S million. ' lhc respondent had o nly tran;ferrcd hJlf her shore in
Company X but lltc appcllnnl argued lhnl the term rcqmml the respondent
to also trnnsfcr half her shares in other companies and an unincorporated
buslnc>s. 'l'o 1'>efulc the appellant's conlentlun, the Fl»pondcnt stougl11 to relr
011 evidence of the oppcllant's failure to complrun about the no1Hransfcr of
285
10.23
As menlioned. lhe parlies orten di.cus.• aspects of the transocl1on before
the-y conclude a conm1c1. A situ1111on could arise where A may think
that something said by R during 1hese discussions is part of the deal that
they agreed on, .vhile 11 mny consider the statement os not 1nvolvhtg a
con tractual promise of any sort. Where the part ies have red11C<•d their
coi>lract 10 writing, the parol evidence rule could be used to exclude
ex1 raneous material but 111os1 contrncrs are made wholl)• or partly verbally.
In tl1c laner category of contrac\5. it becomes ncces&1ry to determine what
statcmcnl is part of the contract and wh•l is not. Contract law makes rim
dttcrmination by dr.n\'ing a diMinction bt\\\'ttn ltrtns and rtprt$t11tat1011s.
10.24
The courts will exomine the pre·contraC1ual negotiations and sift
wu
..id mto three cotegories. The first category consists of the mere puff. the
normol exaggeration and gr;mrutonding that IS a part of contr•ct negotrnt1on,
fo r example, a daim that the product " "the best beer in the world!" 111<
lnw regards claims such a.' the1c ns legally insigntlicant because they are
110 1 meant to be taken seriou<ly. Olten, though not always, these otaten1C11ts
wll I be 011 the bo rderline of o pin ion ond a statement of fac t. The second
category consists or reprcsentntlons while the third category consists or
terms. A reprcsrntalion is made when. for example, A makes a >lateme111
286
Chapter tO: Term$ of the Contract
Principles of Singapotc Business Law
of fact to B with the intentio n of inducing B to ente r into a contract, and
of .contract. 111e court rejected this clain1, holdi ng that the seller's staten1ent
about the lack o( lla,.,s was a representation and not a tern1. In contrast,
that factual statement docs in fact indue< B to enter into the contract. 1 he
10.25
critical feature of the representation is that it induces the co1uract and if
the: 'ourt in S'lwwcl v R'adc (1913) held that the seller's statement was a
it turns out to be false) B n1ight be able to sue A for rnisrepresenration
(sec Chapter l 3 on Misrepresentation). However, B cannot sue for breach
of contract, unless /\'s representation becomes a term of the contract (see
Chapter 13, paras t3.40- 13.4 l). To illustrate, if A tells R that sh e would sell
a necklace to B for $ 1,000, the price may induce B to buy the necklace but
the price is also a par t of the contract and hence is a term of the contract.
Rut, if in addition, A tells R that the necklace belo nged to a celebrity, this
stalcrncnl nlay induc.c B to buy the necklace but it is uncertain whethc-r it
becomes a part of the contract (a term) such that R can sue A for breach of
contract if she discovers, after 1n:iking the purchase. that the necklace \\'as
never owned nor used by the celebrity in question.
term . Here, the seller told the buyer, who wished to buy the seller's horse for
stud purposes, that the horse was perfectly sound and that the buyer need
not look for anything that could be the matter with the horse. TI1e buyer
successfully sued the seller fo r breach of contract upon discovering that the
horse was to tally unfit for stud purposes.
Importance of the Statement
10.27
Whether something said by one party to another d uring a pre -contractual
negotiation is a r('presentation or a tern1 depends on the cornrnon inte ntion
of the parties and is thus a question of foct. This means that if the parties
disagree about the status of the slalemenl and go lo courl, the judge
will examine the specific facts of the particular case 10 determine, on an
objective basis. '"hether the parties intended the sta1ernent in question to
be a representation or a te rnl. Jn detern1ining the c(u11n1on intention o(
the parties, the judge will apply certain guidelines that the courts have
developed over a hundred years. However, not all guidelines may apply to
If •t appears to the cour t that the statement in ques tion is so important to
o ne party that he would not have entered into the contract but for such
statement having been made, the court will likely hold that statement is
intended to be a term and not a representation. ln Bnm1crmnn v White
( 1$61). the buyer asked the seller whether the hop< that the seller offered
had been treated with sulphur. 'lhe buyer emphasised that he would not
even bother to ask the price if the hops had been treated with sulphur. Tiiis
exchange clearly showed the buyer's intent to buy only sulphur-free hops.
'!he seller assured the buyer that no sulphur had been used on the hops.
When, after the pu rchase the buyer found that sulphur had been used, he
sued the seller for breach of contract. ·nie court held that the assurance
about the hops being free of sulphur was a term of the contract and not a
representation.
a particular scenario and no one guideline (even if it applies) c:.in be said to
be conclusive as 10 the intention of the parties. Ultimately, a conclusion can
o nly be reached after a considerat ion of all relevant facts. The guidelines are
discussed in the fo1I0\\1ing sect ions.
Request to Verify
10.26
During a negotiation prior to the cont ract. "'hen A tells B son1et hing :ind
then qualifies it to the effect "don't take my word for it, set an independent
verification and sat isfy yourself: the court will likely hold that what A told B
was a representatio n (instead of a term). In F.cay v Godfrey (1947). the seller
told the buyer of a boat that the boat did not have any flaws but then went
on to invite tlte buyer to have the boat inspected. Tile buyer did not have the
boat
and, after the sale, found flaws in the boat. He sued for breach
287
10.28
A .statement asserting a feature o f intrinsic significance in relation to the
subject matter of the contract is likely to be a term of the contract. In
Darwish M K F Al Gobaishi v House of Hung Ptc Ud (1995). the plaintiff
purchased some gemstones from the defendants. ' lhc defendants had stated
that '\111 the gemstones the plaintiff agreed to purchase were genuine, natural.
without flaws \lnd not treated in any way., prior to ·the purch;:ise. Ho\,rever.
some of the gemstones purchased - beryls - turned o ut to be flawed as
their colour faded when exposed 10 light ttnd hea.t. The Singapore High
Court held (al [80)) that the sl3tement was a term. The court reasoned that
sin<c the subject 1nattcr of the parties' contract "'aS gemsto nes. the subject
ma tter must therefore have the properties of "gemstones" (at [871). Tiiis
inc luded permanence or stability of colour. a "very necessary feature in the
jewellery trade' (al (881).
288
Chapter tO: Terms of the Contract
Principles of Singapotc Business Law
Timing of the Statement
Special Skill and Knowledge
10.29
10.31
W hether the maker or recipient of a statement has special knowledge or skill
in relation to the subject matter of the statement, is relevant for determining
if the state1ncnt is a representation or a tern1. This is because it is reasonable
to assun1e that it is not the intention of a person n1aking the state1nent,
who has little or no expertise in the area, to someone, who has expertise
in the area, to expose hcrselr to a breach o( contract action if the
representation proves to be false. 1\vo contrasting English cases illustrate
lhis approach.
10.32
In Oscnr Chess Ltrl v Willinms (1957). 1he plaintiff, a hire-purchase firm,
agreed with the defendant that he could trade in his car as " part of the
hire· purchasc transaction.
defendant, ·who \ \'aS not in the c.ar business,
co11sulted his rcg.istrnlion book and told 1he plaintiff 1hal the car was a 1948
model whereas in foct the car was " 1939 model. ·nie defendant made this
false statenlent in good foith and it \Vas later found that son1e unkn0\\111
person had fraudulently altered the particulars in the registration book.
Because the plaintiff believed the defendant's statement that the car was a
1948 n1odel, the defendant received more credit f(rr the trade in than he
would have if the plaintiff knew that the car was a 1939 model. The cour t
disallowed the plaintiff's action against the defendant fo r breach of contract.
It reasoned that the defendant who \\1as not a car dealer \\1as not in a position
to provide a co111raclual promise o n the year of the model, whereas the
plaintiffs. a hire-purchase fi rm that dealt in automobiles, had the techn ical
kne>wledge to protect themselves.
10.33
The roles were reversed in Dick Bc11tlcy Prorluctiom Ltrl v Hnrolrl Smith
( 1965). Here, it was the seller who dealt in cars. The odometer of the car
showed that it had done only 30,000 miles after a replacement engine had
been fitted. Jn fact, the car had done 100,000 miles. The buyer successfully
sued the seller-dealer for breach of contract.
10.34
TI1ese 1wo cases show that where the knowledge of the person who receives
the- statement is about the same or superior to that of lhe maker of the
statenwnl, the couJ'ls would likely hold that the statement is intended
as o representation. Even so. the English Court of Appeal in Eim1 Tnubcr
Pritchard v Peter Cook ( l 998) held the opposite - :i. rally motor car seller's
statements about the car's specifications made lo a buyer wilh greater
If A makes a statement ab()ut the subject matter of the contract to B shortly
before they enter into the contract., the courts would likely hold that this
st.aten1ent is a tenn :ind not a 1nere representation. The relevant tirneframe would d epend on the type of contract and the context. For example,
in a contract of employment over which the parties have negotiated for
several months, a statement made during the start of the negot iat ions
would probab ly be a representation and not a term. O n the o ther hand,
in a routine buy and sell transaction, there might be so m uch haggling
that it would jus!ify a court findi ng that a statement made just a week
before the contract is a representation and not a term. 'llius, in Routledge
v McK11y ( 1954), the seller had consulted the registratio n book of the
motorcycle LO be sold and told the buyer that the vehicle was a 1942
model. O ne week later, the parties signed the contract. ' lhe buyer found
that the motorcycle, for from being a 1942 model, was a 1930 model. 'Ilic
court rejected the buyer's claim for a breach of contract holding that the
staten1ent about the year of the ll'IOdel \\1'3S not intended as :i tern1. Ho,,rever,
this ease would likely be decided differently in a eotmtry like Singapore,
where vehicles are expensive and the parties are choosy and sensit ive to
the Certificate of Entitlement ("COE") issues such as the scrap value of
the vehicle. ltl the context of automobile purchases in Singapore, the court
might consider an)' statement about the m odel year to be so i mporlant to
the contracting parties that it would qualify as a term, regardless of the
length of lim.e between the making of the statement and th e time the
conlracl \ \laS 1nndc.
Oral Statements and Written Contracts
10.30
Where the pllrlies, after negotiations, put their agreement in writing. the
courts would likely hold that what Liter say d uring the pre-contractual
negotiation that is not put in writing, is a representation and not a tcnn.
Nor111ally, the parol evidence rule would shut out such state1nen.ts. How·ever,
in special circu1nstances. the court n1ight hold that the parties entered into
a contr:ict that \\l:\S partly ·written and partly oral. In such an instance,
1his guideline would not provide useful guidance o n the status of the precontr;;lctuol stt?1ten1ent.
289
290
Principles of Singapoft Business law
Chapter 10: Terms of rht Conrrac1
as "express tenns". The la\v supplen1ents the express terrns of ::i contract by
a category of l<rms known as implied terms. In this way, the law tills in the
gaps in a contract, if and when necessar)'.
technical knowledge were held to be intended as terms. The buyer was a
motor trader, an experienced rally driver who had previously owned al
least three similar rally cars while the seller was a dealer in motorcyde
clothing and accessories and collector of classic c..irs. The seller did no1
have personal knowledge of the rally car's technical specifications but had
obtained a copy of them from Rally Engineering Dcvelopmem ("RED").
the company he had purchased the car fro m. 1lie seller i ndicated in
his
for sale that the car specifications \VC'rC' available on
request. When the buyer requested to see them. the seller photocopied
the specificatio ns onto his company letterhead before showing them to 1he
buyer. The buyer had then checked the car against the specifications for
accuracy as far as he could. The conduct of the parties led the court to find
that bot h the seller and the buyer regarded the specifications o.s important
- the seller had mentio ned them in his advertisement and the burcr hud
requested for 'them and checked the car c'llrefully against them. Further, the
seller had made the specification the basis of the sale when he photocopied
the specifications on his own letterhead and did not disdain'I responsibility
for their tlccu racy by asking the buyer to check with RED instead. Based
10.36
ll s hou!J be noted at the outset that an "entire agreement clause" in a
written contract would ge11erally not exclude the i1nplication of terms into
the' contract (see Singapore Court of Appeal decision in /\'g Giap Ho11 v
We.stcomb Scrnrities Pte Ltd (2009) at [3 t J). 'Inc cl,lllsc could be worded
clearl)' and unambiguously enough to achieve this effect (al (321) but might
then be subject to regulation by the common law and the Unfair Contract
'Jerms Act (Cap 396, t994 Rev Ed) (at (32]).
10.37
Implied terms can be divided into sub-categories depending on how the term
is i.mplied. First, there is the category of terms implied in foci (sec para I0.4 1
o nwards). Th is is premised on the failure by the parties, for whatever reason,
to address their 1ninds to particular matters. Hence, when confronted "'ith
a gap in the contract that needs lo be filled in ordc< to resolve the dispute
before it, the court 11sks itself what the parties wollld have unequivocally
agreed upon had they addrcs.1ed their minds to the problem. A term would
be in1p1ied only if necessary lo give efficacy lo lhc contrnct.
I0.3R
Second, there is the category of terms implied by law or "defoull terms"
(see para 10.49 onwards). 'l his c.ategory concerns specific types of contracts,
defining relationships between the part ies such as landlord and
tenant or employer ;md employee, where 1he courts imply a term not because
of thl' prcsu1ncd intention of the parties, but because the i1nplied tcrn1 gives
effect to policies intended to make the relationship work in that particular
category of contract.
10.39
'Third. there h a category of terms that must be iinplicd in some types of
contracl pursuant to a law passed by Parliament (sec para 10.52 onwards).
Th<" Sale of Goods Act furnishes the best example of this category.
10.40
Finally, there is a '"1lcgory of terms implied by custom (see pora 10.S4
01nvards).
pertain to contraclS rcl:.\ling to spcciulist subjects such as
the sale of commodities, which take place in the co111ext o r trade as>ociations
a11d cuslo rnnry prnct ices that have developed rules on how the contract is to
be performed '"'d expands o n the obligations of the parties.
on these facts, the court concluded that the spedficat1ons were intended as
terms of the conlrnct regardless of the seller's relative lack of ex.perlise. 'l11is
case clearly illus1rates lhat all relevant facts need to be considered before a
conclusion can he reached as to the status of any s'ate1nents n'lade in the
course o( negotiations.
IM PLIED TERMS
I 0.35
In the countless contrncts made every day, the parties explicitly a.grce only on
a few main terms. !'or example, a consumer-buyer and a supermarket-seller
of a product usuall)' engage in a sales tr:lnsaction '"ithout considering critic.al
issues such as the quality of the product and the seller's title (o,,.nership) to
1he goods. This is often the way it should be. If the part ies to a contract try
to anticipate and iron out every possible situation over \Vhich a dispute nu1y
arise, they will squander precious time and probably not agree on a contract.
ll is also difficult 10 e1wisage and provide for all eventualities. especiall)' in
co1nplex transactions. Moreover, the vas! nrnjority who rnakc contracc.s have
not studied contract law and should not be expected to know everything
lhat could go wrong i11 o particular tnmsact ion. The law therefore allows
people to conLract freely. and what they explici1ly agree on. the fow refers to
291
292
Principles of Singapofe Business law
Chapter 10: Terms of rht Conrrac1
Terms Implied in Fact
10.41
10.42
In the Sembcorp case 1hat we cncou111ered earlier in 1his chapter, 1he
Singapore Court of Appeal laid down (at [ 101)) a 1hree-s1ep approach to
the implicalion of terms i11 fnct into a contract. lhe approach is largely buih
upon two old English cases <lcscribed below.
and [98)) in the three-step •pproach it laid down for when the court will
imply a term.
I 0.45
c<>urt will consider implying a term only if it discerns that the gap arose
because the parties did not contemplate the gap.
The first case, ·nre Moorcock ( 1889), held 1hat courts would imply terms to
injecl efficacy into Lhe conlr<\cl. In 77re Moorroc:k, the defendants were the
owners of a j elly in the 1l1ames River. They conrracted with the plaintiff
to have Lhc plaintiff's boat, 77ie Moorcock, docked at the jetty. .Both parties
knew that when the tide was low. 1hc vessel would lie on Lhe riverbed.
Dur ing the low 1ide, the vessel settled on a ridge of hard ground benea1h
(2) /\1 the second s1ep, the court considers whether it is necessary in the
business or conln1ercial sense to i111ply a tern'l in order to give the
contract ctlicacy.
(3) f inally, 1he court considers 1hc specific term to b.e implied. 1liis must be
one which the parties. having regard to the need for business efficacy,
would have responded "Oh, of course!" had the proposed term been put
to them at time of the contract. If it is not possible 10 find such u dear
response, then. the gap persists and the consequences or tha1 gap ensue.
Ihe 1nud and was dan1aged. The defendants had not give n a contractual
promise to 1hc effect thal the phic< was safe and thal the ship could rcs1 011
it wi1hom damage. Despile !his omission, the court held that I here was an
implied term lby !he defendants Lo 1his effect and therefore they were liable
for dnmages caused by the breach. The court observed tha1 the term was
implied from the prc.<umcd intc111io11 of lhe parties. In business Hansactions,
the purpose of the hnplication
\Vas
to give busines.s efficacy to the transaction
that both parties must obviou•I)' have intended. The ahernal ive, whith was
unacceptable. was to impose on one pariy all 1he risks of the tr.ansaction or
to free the other .side fron1 all chances of failure.
I0.43
10.44
The second case, Shir/aw v Southern Foundries (/ 926) Ltd (1939), held that
a court \\1ould ilnply a tern1 into a contract if it is .satisfied that "if. \\1hi1e
the fcon11-.ctingf parties were making 1hcir bargain. an officious bystander
were 10 suggest some express provision fo r 11 in their agreemen1, !hey would
testily .suppress hin1 \Vith a conunon 'Oh. of course!'" (see Iv1ackinnon LJ at
p 227). The 1c r111 to be implied must be so obvious as nol to admit possible
disagreemen1.
The q uc>tion whethrr the test> in the two Engli>h ca>es were to be applied
as tthernative lcsts or complementary ones was sett led by the Singapore
High Court in forcfrow Medical Tec/1110/ogy (Pie) Ltd v Modem·Pak
Pit lid (2006), which held 1ha1 the tosls compkmenl one a nother. 1lie
"officious bys1ander" tes1 is merely l he pruclicnl me1hod by which 1he goal
of "business efficacy" was achieved. 1l1e Court of Appeal in Scnrbcorp
approve<l of 1his approach, and expanded upon 1hc two test• (at f91 J- (92f
293
The 1hrce-step approach is as follows:
( l ) The fi rst step is to ascertain how the gap in the contract anses. The
10.46
The first step reflects lhc court's concern not to rc\...•ritc a contracl for tht·
part ies. 111c court will (011Sidtr implying a tcm1 into a contract only if a true
gap cidsts, and it exisls o nl)' if the parties had not addressed their minds to
lht• issue (al f94 J- l96)). Examples of instances where a true gap does 1101
exiol are (a1 J94 I):
o
the p:irties had considered the issue but chose not 10 include an express
1erm in the contract because they m istakenly though1 1hat the existing
express tenns alread)' covered the issue:
o
the parties had c.on.sidcred the issue but chose not to include nn express
term because 1hcy were unable lo ag1·ce on how to deal with 1he issue.
The eourl reasoned (at [96f) that the proper rcmed)' for the parties'
mistaken belief as to whttl 1he exis1ing express terms cover. would be lo
seek a rectification of the contract. Where parties had delibernlcly dmsen
1101 to include an express term beetlllSC of lack of agreement on how lo deal
wit-11 1he issue, the court observed (al J95]) that to imply a term would be
to act contrary to the parties' actual inte ntion. Tcrn1s are in1pJied to give
effect to the pwume1/ intentions of the parties. 1161 to go
their
actual i111entions. Whether the parties had or had no·t con1empln1ed an issue
is uhi1nately a question the courts would have to tlscertain based on an
objective cxaminotion of the facts surrounding 1hc transaction, including any
relevant con11-.ctunl document or terms (see. eg. Scmbrnrp al J109)-J118)).
294
Chapter 10: Terms of rht Conrrac1
10.47
10.48
Principles of Singapofe Business law
The observation above provides the prag1n:uic reason ,.,..hy the courts
ilnply tenns in certain types of contracts. OftC"n th·ese contracts are those
The second and third steps involve an application of the "business efficacy"
and "ollicious bystander" tests respectively. 'lhc Court of Appeal llflirmcd (al
[92) and [98)) rhnt the two rests are to be used complcmenrarily. The "business
tha.1 establish a relationship between the parties such as an employer and
efficacy" test is used 10 identify if there is a gap in the contract t hat requires
filling. In the Court's words, the rest helps to identify that "som.<thing more
needs to be added to the contract" to ensure that the contract is efficadous
(see [9 1]). Ho\\'ever, it does not help to identify what specific term should fill
that gap. This .is where the officious bystander test is helpful. as it ensures that
an)• term tha1 is implied accords 1vi1h 1hc parties' presumed in1en1ion. 111is is
1he case if 1he par1ies would regard the lerm t() be so obvious 1hat they would
respond "Of course!" irritably to the officious b1•stander who suggests it
Significaiitly, 1he Court in Scmbc()rp highlighted (at (99]) that business efficacy
is relevant ,..,hen considering if there is a gap 111 connnercial trans::ictions. Jn
transactions, efficacy in Olher senses oould be considcrtd.
an enlployee. The advantages of having such standardised tern1s are that
cel'l"inty is promoted, risk can propcrl1• be estimated and important social
policies can be given effect to. For instance, a human resources manager in
a company can find oul what terms the law will imply in the employment
relationship and can takt up insurance against the risks. Like,vise. a lessor
will know wh,lt duties will be implied in a lease and can adjust the rent to
be charged in order to pay for the costs associated with discharging those
dulies. Borrov{ing a tern1 fron1 co1npuler technology - "'dcfauh printer" the House of Lords has referred to 1hese tel'lns as "default lerms'' because
they will apply unless overridden by express 1erms inserted by the pa1t1es 10
the- transaction {see. cg, 1Wnlik v Bnnk of Cn.·dit fHrd Con1111ertc lnternatio11al
SA (1998)).
Finally, any term implied in fact for a particular contract does nol <el a
precedent for future contracts or the same 1ypc (sec Forefront Medic.al (at
[4 1J). 1·eitera1ed by the Cour1 of Appeal In Ng Gi11p Ho11 at (90)):
10.50
In other words, the court is only concerned about arriving at a just and
fair result via in1plica1ion of the tenn or tcnns in question in th:u case
-
and tlull cnse alone. 'l he court is o nl}' concerned about the prcsun1cd
mid tltosc p11r1ic11/11r
i11tentio11 or the partic.ular contrac1 ing parties parties nlonc.
[emphasis in the original[
In Liverpool City Coimcil v Irwin (1977), a landlord of a block of
apartments was held to be under an implied obliga1ion to take reasonable
care of the common areas and keep them in a re:i.sonable mte of repair.
In Malik v B1111k of Credit 1111d Commerce JutcrnntiOll'n/ SA (1998), the court
held that there was a11 implied term in employmen1 contracts, tha1 1he
relationship between employer and employee was one of trust and confidence
and that neither party woul<l do anything. without 1iood cause, that would
damage this relationship. 111e courts are also willilllg to imply a term in
order lo focilitale global commerce and the smooth functioning of arbi1ral
agreements. Thus, it is an i1nplicd term of an arbitrat ion agrcc1ncnt thal t1u·
par1ics will perform 1he award issued by the arbitral 1ribun>tl (see Associntetl
f;/cctrh: & Gas Insurance Services /,.td v Europea11 Reinsuratrcc Cornpany of
Term s Implied in Law
l0.49
A$ l.,ord Mc!,;tren said in Wi//i11111 Morton & Co v Muir Bro1/1cr-s & Co ( 1907)
al p 1224:
'Ihe concc ption of an hnplied ( Lerm 1 is one '"ith which
'"e
nre familiar
.. .. land) it will be found Lhal in ah11ost every instance thC)' arc founded
either on univers'11 custom or in the nalure of 1he contract itself. If the
lterm l is such that every reasonable man on the one part would desire
for his own protection to stipulate .. . the [term), and thal no reasonable
1nan on the other p\l rl would refuse to accede lo it, then it is nol
unnotural that the [term [ should be taken for granted in all contracts of
the dt1ss without the necessity of giving ii rormal exprcssiol\.
295
Zurid1 (2003}).
tO.S t
In Cltun Cltoo11 Cheng v Allgreeu Properties Ltd (2009), the Singapore Courl
of Appeal provided a userul summary of the ral ionale and approach of the
cour1s to the implica1 ion of terms in lt1w (ot )69)-1701):
o
111c court is nol concerned aboul givi ng effect to the pre.<umcd intention
of 1he contracting parties when it implies o term in law. Unli.ke 1hc
case of u te rn1 ilnplied in f.tct, the court iinplies a term in law based
on wider considerations of foirncss and policy for 1ha1 defined class
of contracts.
296
Chapttr 10: T<rms of tht Contract
o
A term that is implied in law -.ill be implied in all future contracts
within " defined class. unless the express terms of the contract provide
otherwise. Hence, the court should exercise great rest.mini in implying a
term in law (a caution that was
in Forefront al l41 ll
o
When 1mpl)'ln8 a 1enn in la"'. the court is in effect imposing on the
parties what 11 considers to
mo&I reasonable in the ctrcumstances,
although rea>onablene>S of the term IS not the only factor considered in
deciding whNhcr it should be implied.
Terms Implied by Statute
t0.S2
10.53
Terms Implied by Custom
I 0.54
Contracts are rarely 1.hvorccd from their surroundings and context. A
particular tr.1de practie<, the rcatUrCS of tht morket and t\en the CUStOms
of the locality may bt reJe,,.nt to the operallon of th<" conlr.ct. Accordingly.
where a party engages in contracting within a particular trade, for example,
the- coffee trade, that pnrt)' will be bound by the usage in thnt trade if tbc
us;1ge is well -known, certain, reasonable and legal (see Nelson v Dnlil ( I R79)).
In llul/011 v IV11rrcn (1836), the di>pulc centred on a tenant fJrmer'> claim to
a foir share for seeds ond allowance. The plaintiff farmer gave the landlord
nocice or his intention to quit (arming tht land. HoW<'\'tr, the leai.e required
1hc- fanner to conhnuc to plant during the notice period. I It would no
lo1>ger
in a contracrnal relationship when hnrveot time came around. The
issue \\ln.s \Vhcthcr 1hc forn1er \V:l!'i en1itled co o. fair allowance even 1hough
tl><· crop had not been harvest«.!. 'lhc court reasoned (al p 475) that this was
a type of contract where "the parties did not express in wrning the whole
or the
by which they intended lo be bound but to contract with
rrCrronce to known usages·. 1r it can be
that thCISe doing business in
a particular commumty had a general!)' accepted custom and that anyone
inquiring would have been told about thot custom, then this custom would
bil>U the parties even if uoth of them were ignO.ra'1t or its existence (sec
C/rm1 Clrcng Kurrr v 11'11/1 Tm 811111. Ltd ( 197 1)).
10.55
To be 1mphed m a contract, a custom mu>l
a usage that a 'ufficiently
un iform and accrpted bi• the r<IC\-anl commuml)• as
apphc•ble, m the
or cxpr<<S agreement<. Pointing to the Impact of rapid globalisation
an<l industriah>tllion m Singapore, ll ha> been argu ed that the emergence
of significant local cuSlom ll1at could be implied In Singapore contracts
Is r emote (see A Phang. /ntcnrat/01111/ l!nqcfopacdia of l.aws
Contracts
(Si11gapore) (2000) al para 358). For• summary of expres; and implied terms
and their characteri>tics, stt Figure I 0. I.
A statute may 1mpl)•
111 a parucuJ.r
of contract. When a statute
inlphes terms in a contract, it is not trying to anticipate and provide for the
intentions of the parties. Instead. the implication is o n grounds of public
policy with P:irliamcnt
that such contrnc1s 111us1 contnin these
impl ied terms unks' explicitly dislodged by the parties. Perhaps. the most
well-known in>lance of terms implied by >tatutt is the UK oale> or goods
10 the J\pphcauon or English
Law Act (Cap 7A, I994 Rev Ed), and reprinted locally as Sale of Good5 Act
(Cap 393, 1999 Rev Ed) ("SGA"). Another instance is the United Nations
Convention o n Contracts for the lnternotlonal Sale of Goods ("CISG").
which has aim been mode a part of Singapore law (Sale or ()ood< (United
NJtions Convention) Act (Cap 283A. 20 13 Rev Ed)). 1hc tcm» Implied by
ulc of good> legi;btion aucmpt 10 provide coherence and a fr•mcwork 10 a
type or contract thot IS entered into thousands of times a day. These implitd
tcnns allo.. the seller to prier good; by rcfrrencc to the mk exposure
created by the 111111l1cd terms. and allow the buyer and seller to routinely
engage in sales '"llhout wast ing 1in1c Hl han11nering oul the dtt::uls. 1'he
following illus tratio n> of terms implied by the SGA show that the content of
what is implied h nece.sary for the >JllOOth functioning or a >3le or goods
sys1em in a country. For example. s 12(1 ) SGA implies a condition that the
.rll<r has a right to ;ell the goods. Section 13(1) implies a condition that
correspond wuh their de>cnpuon and s 15(2)
goods sold by de>mptlon
that goods sold by ;ample will cormpond with their sample. Section 14(2)
prO\oidcs that wh<'l'C 11 ;cllcr sells goods in the course or his
there
is nn implied con1lilion that the goods supplied under the cont rnct are of a
u tisfactory quJlity.
lcgislatton. wluch apphcs m Singapore
297
By incorporatmg this "sho rthand" in sale or goods transactions, the SGA
allo ws tht sdkr nnd the buy<r 10 foc us o n the main elements or thr
tnmsaction. This in turn, reduces trnnsllction costs and frees up time for the
parties to engage in more productive economic tl'3nsactions. 1hus, a grocery
>tore manager may work on managing the >tore without ha'"ing to meet
customers and as;ure them on the mauers Implied by the SCA "1ule they
stand in line at the check-out queue.
298
Chap1e1 10: Tef'tns of tht Co11uac1
Content of contract: Terms
10.57
,./
The Singapore couns adoptrd the UK approach to the! d=ificauon of tenns.
a
a ..,,rarrant)'.. or an ·inno1ninatt'
Ttrms art
The word "condmon· is a legal 1crm of an for an important 1mn. l.1kcw1sc,
·wo1rranty.. is used to refer to a nunor or unimportant tenn.
Oral
Written
Court
Uaage/Custom
i
,... ..
10.59
The word "warldnly'' is freq11ently used in con;umer contracts for 1he sale of
goods or services in a layperson sc11>e. The meaning here is different from
thC' technical tcrrn •·\\•arrnnty" when used to refer to a n1inor or unin1portunt
term. In !lie con><11ncr context, for example, a seller of a hand phone may
give a warrnnty for a ccrrnin period. This usually JU$t mcnns that the seller
or dealer of the hand phone will replace any fauhi• components and provide
repairs free of charge during the w•rranty period.
10.60
lnnominal• tenru art terms th•t haw not been expressly designated or
st• led b)' the par1ie. to be tmporl•nl lerms ("cond1llons") or mmor 1erm>
("warranties"), ond they c•nnot be immediately ca1egoriscd as e11hrr type
simply by looking ot their content becJwe it is possible to envi$age both
serious as weU as extremely trivial breaches of the term The Engl"h c•sc
in which 1he innominate lmn w;is first described, Hongkong Fir Sl11pp111g
Co Lie/ v Knwnst1ki Kisltc11 Knisli11 Lttl ( 1962), provides an ex.,mplc. A
ves.scl '...is hired by ch.1r1crers from 11> owners ror 24 months. Clausc
I of the charierparty (le, the ship hire contract) stated that the VC$!t'I
was to b e "'in every \\fllY flucd (or ordinary cargo service': l lo\\'CVCr, 1hc
\
Terms hnpllod In feet by Court.
Appty tilt 3-llep prooesa
Act Implied t erm a
\ ........
/
The word "condition" used in tlus tecnnical sense is also known •s
"prom1s.<ory condition", and diflers from "contingent
A.< its name
hnplics. a contingcnl condition is a tcnn in tht conlract thal
an
event or events thoi must occ111 If the co111ract is to come 11110 force or
re1nain in fo rce. 1hesc "conditions preccdenf' and ""conditions subsequent"
nrc terms but arc no1 "conditions'" ln the specialised sense used above.
Rather. they are "condtllOn;" in the layperson sense of the word
in
"'co nditional: For ex11mple, a n1:iin contractor inay engage a
contri.\ctor
to build a garage in • house, with thr sub-contract containing a condi1ion
precedent 10 1hc effect that !he ;ub·con!ract will only take effect when 1ht
house owner aw.mls th• building contract to the main contractor. Thert
might also be a "condition •Ubsequcnt" to the rffect I.hat thr >Ub·contract
to build the garage wtll remain in effect only if the mrun bmldmg contract
remains in cffcc1.
Eg, Sato ot Good•
Law
Fact
10.58
In Sembcotp Marino·
(1) - " ' K lho<t 11 a lnJ<I gap 111 lh& conttac1
(2) H 1110<0 "· conoldor ii II 11 necessa.y to imply
a tenn to gt..o
conlract ,,.,._ss elf,..ey"
(3) lrrc>IY ll>t "-ltod tenn ooly K k wWd pass
,,,. · - · bystand4f" ttlt
Terms impl•ed clepend on h>cts of case - does
not 101 • precedent
same term wl not
neettsanty t.. 1mplll<I In all other con""°" ol tl>o
Term1 Implied In l1w by Court
Terms implied to promote
r.
- ....,,. term Wll be implMld .,
lh& same
at other concn.cts of
type
"OofauK terms• -
11'181 os
terme thet eppty ""'"" Ille
contracting parties override
1&me typo
Term will not be implied ir 11 is contrary to
exp<•IH<I lnlentk>fi Of
parties
•"ed
_...,ty - II"'•
to
._,.nt-pot,Qes
Terms omphd Mt • PfK9Clent
I
tMm by lnMrting ex.pre$$
terms to deol with the matter
Figure 10.1 Express ond Implied tcrim
RELATIVE IMPORTANCE OF T ERMS
Condit.Ions, Warranties and lnnominate Terms
10.56
When a tcnn. whether express or implird, ha< been breached, the court h:is
to decide on the remrdy to accord the innoctnt p>rty (1e. the party not in
breach).
mentioned. contracting pames may not rtgard all
to be of
equal 1mportJ11Ce. 1 h• law of contractual term< rccogni>c. thb by dassifymg
the teron; and providing remedies for their bre•ch accordingly. liowever,
there Is a remedy that is available rcgnrdless of the 1111portance of the term
breached. 1 he right to claim damoges, that is, compcnsation for losses
suffered, Is uv,1ilnblc to the innocent party for the brcJch of any term in a
contrncL "l11c 1•clalivc lmportnnce of tc1·ms is slgnlfica1\I where th e availability
of the option 10 tcrmi11ale the contrnct is concerned. Gcnc1·ally. the low only
makc1 this option available for breaches of important terms o r where the
co111equcnce' of breach arc serious.
299
300
Chapter tO: Term$ of the Contract
vessel broke d own several ti1ncs during the ch:.irter and was out of service
for 20 weeks, The charterers terminated the charter fo r breach of the
Principles of Singapote Business Law
10.62
obligation of seaworthiness (ie, a breach of Clause I) about four months into
only ditferen•e lies in that Singapore law makes the option to terminate a
the char ter. The O\mers then sued the charterers fo r wrongful termi nat ion.
Lord Diplock h eld (at p 71) that an obligation of seaworthiness was a complex
contractual term not easily categorisable as a "condit ion" or "warranty":
contract available for breaches of ;nrplied \Yarranties ns well under certain
circumstances (see explanation in para 10.68 onwards, especially I0.71). We
turn now 10 consider in greater detail how Singapore courts classify terms
and determine the remedies upon a breach, especially the availability of the
o ption lo tcnninatc the contract Readers arc reminded that the rc1ncdy of
damages is available for every breach, regardless of what term is breached.
It embraces obligations with respect to every part of tbe hull and
machiner)'• stores and equipment and the crew itself. It can be broken by
the presence of trivial defects easily and rapidly remediable as well as by
defects which must inevitably result in a total loss of the vessel.
'lhe court held that the r ight to terminate should therefore depend o n the
nature and ce>nsequences of the breach - whether the breach deprived
the innocent party of substantially the whole benefit he was intended lo
obtain . Applying this test, however, the court held that the charterers were
not entitled lo terminate the contract. By the time the charterer s purported
10 terminate the contract, they had already sailed across the Atlant ic from
the port of o rigin al Liverpool, UK, collected cargo and delive red them to
Osaka, Japan, despite the delays. The court also found that the charterers
had no reasonable grounds to doubt, given the remedial steps the owners
had taken, that the vessel would be rendered sea>•orthy fo r tlte remaining
17 months of the charter.
10.61
The cur rent Singapore approach to determining re-medics for breach has
deviated somewhat from the UK approach that is described above. Thr
Classifying Terms
10.63
ti1n ely delivery. the option to tenninate the contract '"'ould arise even if there
has bt•t•n a delay o ( a few n1inutc.s. In o the r \\'Ords, the contracting parties arc
free to structu re their bargain in such a wa)' that even the smallest infract ion
of an obligation would give the innocent par ty the right 10 terminate the
contract. Conversely, the parties could agree explicitly that a breach of
an obligatio n does llOI give the innocent party the right 10 terminate the
contract regardless of
serious the breach is. If parties have n1ade their
intentions clear. lhercby giving rise to either express conditions or express
warranties, the courts will give effect to their intentions.
Since the Hongkong Fir decisio n, the UK approach lo determining remedies
fo r breach involves a two -step process (see Bunge Corporation, J'Vew )'ork
v 'fratfax Export SA Panama ( 198 1)). First, the court m ust apply the
"Condition- \\farranty approach': This requires detennining \¥hether the
contracting parties intended the term to be :ln in1portant one (a condition)
or a n1inor one (a , ....arranty). In the UK, the option to tenninate the
contract is available for bread' of ;,\ condition but not a '"arra nty. Second,
it is o nly after determ ining that the term is neit her a condition nor a
warranty but. rather. an inno1ninate tenn. n1ust the court consi.der '"hether
the breach hus deprived the innocent party of substantially the whole
of the benefit he wns intended to obtain (the "Hongkong Fir approach").
Where there 's such deprivation, the remedies for a breach of a condition
would follow. O therwise, the remedies fo r a breach of a war.rant)' would
follow.
301
To classify terms, the Singapore C-Ourt of Appeal in Mau Fi11a11cial (S) Pte
Ltd v Wong Bllrk Cl111m1 Dnvitf (2008) reiterated (at (16 1]) that the focus
of inquiry is on the intention of the parties, as objectively ascertained. 11ie
parties are free to agree expressly (ic, using clear words) that a particular
tcrrn in a contract will be regarded as a condition so that upon its breach,
the innocent party has the option 10 terminate the contract regardless of
how minor the consequence of the breach is. For example, the parties may
stipulate that "it is cssentilll that the seller delivers the goods no later than
the time stated in the contract." Given such a clear ind ication of the need for
I0.64
In practice, however, parties rarely 1nakc their intentions clear, and
som etimes the court may conclude that when the parties label a term as
a "condition': they do not intend the technical meaning (see I. Scli11lcr
AG v Wickman M11c/1i11e Tool Sales Ltd (1974)). In the absence of express
conditions or warranties, the courts will have 10 discover the parties' implied
inte ntions (thereby giving r ise to implied conditions o r implied warranties)
by construing the language of the contract and the tcrn1 concerned ·within
the context in which the contract was made.
302
Principles of Singapoft Business law
Chapter 10: Terms of rht Conrrac1
10.65
In Ma11 Firw11cial, the Singapore Court of Appeal summarised t he approach
to dticrmining the type o( term that has been breac.hed. 'll1is inl'olves (at
'A':lS
subsequently alleged that Wong had brea,hed. 1J1e issue was whether MF
[l61 ] and [1741):
could terminate the TA upon Wong's bread> of the clauses, so that it could
disd1arge i1self from its obliga1ion to pny Wong 1hc p romised compensa1ion.
ascertaining the inte111ion or the conrrncting parties ... b)' coJ\struing the
actual con tract itself (including the contractual 1erm concerned) in light
of the surrounding circu1nstanc(S as a \vhole.
10.67
Emphasising (al [1 60) and [ 174)) that there is no magical formula and 1hal
much depends on the actual factual circ111nsiances (ie. the comext) of the
particular case, the Court of Appeal highlighied (at [ 162)- ( 17311 four noncxhaustivc factors 1ha1 might be taken in10 account, if they llppl;y:
o
o
o
whctlrer a stnlute classifies the tenu as a condition - for example, s 13(1)
Sale of Goods Act (Cap 393, 1999 Rev Ed) provides chat in a co111ract of
sale of goods by descriplion. there is an implied co11rlitio11 chat the goods
will correspond with the description.
o
o MF's efforts Lo redri1f1 a clause 10 add a qualific.1tion thal tho compens;ttion would not be payable upon breach of any lerm in 1he TA (al
I 189]- 1190)).
whetl1cr n prior case prccerlcut ;s nvnilnble - sornetin1es, previous cases
whetlrnr t1re co,,tructu11l terrn is given i11 tlle co11text of n n1t rcn,,1ilc
transaction - parties to commercial contracts place a high value on
certainty a nd predictability. and certain tcnns in 1nercanti le contrac ts
have been regarded as condilions in the absence of evidence to 1hc
con1rarr. An example would be 1erms relating 10 time suc h as a 1erm
specifying tilnc for \\ hcn n ship is ready to load cargo (sec ·nre MiliaUs
A11gelos)
1
On the focts o f 1\1/nn fjnandal. none of the four factors n1entione<l above
applied aJ\d so 1hc Court con>trued the lcrrn in qucstio11 and the coni racl
agtlins1 the foctual contex1. Rriefl)'. Wong Bark Chuan ("Wong") expressed
a wish lo slep down us CEO of Man Financial (S) Ple Ltd ("MF"), and
wti> asked to resign and put on "gt1rdcn leave" while serving out his no1ice.
Wong and MD' then entered into n Terminn1ion i\greemcnl ("TA"). which
303
the trouble Wong took to negoiiate for acceptable Clause C terms (which
included Lhe tcnn in question). in insisling o n a reduction o f thC' period
of restraint (al [1 88)); 11nd
whetlrer tlie tcnu itself exprt•ssly states that ii is If condition - this factor
is not conclusive as the 1vord "condilion" migh1 have been used in 1hc
lay rather lhan the legal sense (see l, Schuler men1ioned above)
the Ler111 was a condition. and COJ\fronted wi1h such a term ii\ the sa111c
1ype of contracl, n cour1 ni;1y conclude that 1he term was a condition
(see Maredelanlo Compmria Naviem SA v Bergba11-l/a11del GmbH. Jlrc
Milralis Angelos (197 1})
10.66
The Court of Appeal held chat one of 1he clauses had been breached and
that the breach entitled Ml' lo terminate the TA, as MP and Wong's implied
intc:ntiOJ\ was lo regard 1he clause as a condilion. 1ihc court inferred such
inl£ntion objeClively from the factual context. Specifically, lhe cour1 found
that 1he exchange of correspondence between the parties in finalising the TA
(at ( 1791) demonstrntcd 1he importance 1he parties :itlachcd 10 the TA and
the clause in question. 1llc exchange of correspondence showed:
'lhe reader is rc111indc<l thal the parole evidence rule \vil1 not shut out the
cxanlining a standard tc rn1 in a generic contract would conclude that
o
executed after much discussion. The TA included two restraint of trade
clauses (on such clauses. sec Chapicr 15 pa111 15.3"1 onwards). which MF
f."Xl
<:vidence of context a.s the issue here do<"s
1'lot
pert.tin to \Vhat trrn1s
1he- parties have agreed to but ra1her how lo ch1ssify 1he term in dispute.
The Right to Terminate the Contract: the RDC Concrete
Qualified by Sports Connection Approach
10.68
We turn now to 1he current Singapore approach o n when. and on what
innocent party could have an o ption to tcrn1innlc a contract
upon the breach of a lerm. The Singapore Court of Appeal in RDC
Corrcrctc Ptc Ltd v Sato Kogyo (S) Ptc Ltd (2007) pr·escribed a comprehensive approach for this, and subsequcnlly qualified ii to a small extent in
Sports C111111efliu11 Pte I.Id v Dcuter Sports G111bH (2009). The RDC Concrete
approach Is now hiw, having been applied in many subsequent decisions
(see, eg. CAA Tecl111ologies Pie Ltd v Ncwco11 811iltl.crs Pte ltd (20 17} and
LED Lirrear (Asia) Pie Ltd v Krislite Pie Lttl (2017)). Whal remains obiter
Is Lhe qualifica1ion In Sports Co1111ec1/011 of a "limiled cxcep1ion ln the case
of a n express warr.mty''. 'fable 10.t sees out a description of the npproach as
quolified.
grounds.
304
ldUl't: IV . I
The RDC Concrete approach to situations entitling an innocent party to terminate the contract at common law as
qualified by Sports Connection
ROC Concret e
'Situation.s•
Circumstances where right of termination arises
( 1)
Contract contains
express provision of
a right lo terminate
in specified
circumstances
(2)
This refers to a situation where the party Fn breach
renounces the contract (ie. the defaulting party
·disowns" the contract) and dearty informs the innocent
party that it will not pedorm any of its contractual
Where lh.is occurs. a right of termination a.rises without
the court having to ascertain the type of term breached.
9
"'O
'?
obligations.
3(a)
w
Where such a provision exists, the court does not need to
ascertain the type of lerm breached in order lo decide if a
right of lermination arises.
term that clearty fists the even ls the occurrence of which
wlll permrt the innocent party to lemlinate the contract
and an event listed has occurred.
Contract does not
contain expre--s-s
provi.sion of a right to
terminate
0
Comment
This refers to a situation where the contract contains s
Condition-Warranty
approach
§
Where Situations (1) and (2) descnbed above do
not apply. the court has to ascertain the type of term
This refers to a situation where the courts have
ascertained that the term breached is a condition.
breached in 0<der to decide if the innocent party has a
right to terminate the oontract.
"'
The firs.l step is to apply the Condition- Warranty
approach which involves dlseemlng lhe intention of
lhe contracting parties on an obje<:Cive basis. ir lhe
contracting parties regard lhe term to be an importtant
one. lhe court W111 categorise it as a eondi'lion with lhe
conseqU<Jnce lhat a right of lerminalion arises uPoO 11$
breach.
3{b)
Hongkong Fir
"
il
!?
ThlS refers to a situation where the term breache<l ls no/
Where upon applying the Condition-Warranty
results in oonseqvences which deprive the innoee<Jt
approach, lhe court discerns lhat lhe oontracbng parties
do not regard the term breached lo be an important one.
the second step is to apply the Hongkong Fir approach.
•condition (as ascenalned by the coorts) but its breach
approac.h
>;'
party of subslanUa//y the whole benefit Iha! lhe inrnocenl
parly was to obtain from the contract.
This mvotves ascertaining the severity of the
consequences o f the breach. A right o f termjnation arises
onfy if the breach results Jn consequences that deprive
the innocent party of wbstantially lhe whole benefit
contracted fot a.nd not 01.hetwiso.
Quallflcation In Spotts
Connection Pte Ltd v
Deuter Spotts GmbH
(2009): the limited
exception (at (57))
This refers lo a situation where the lerm breached "itself Where the term is an express warranty. the court will
sta1es exp<9"sly {as we// as clearly and unambiguously) give
to it and the innocent party may only be
that any b<each of regardless of lhe seriousness of
compensated by an award of damages. No right of
the consequences that follow from the breach, will never temnnaUon afl'Ses.
entitle lhe Innocent parly to teimlnate I.he contracl .. :
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Chap1e1 10: Tef'tns of tht Co11uac1
I 0 .71
10.72
10.73
in1tntions that the breach of a particular term should never allow the
innocent party to terminate the contract
Court of Appeal to qualify the RDC Co11crtu approach in its later decision of
Spom Co11nution (at (S71l as follo,,-s;
The differ<nce between the RDC Co11crcte-Sports Co1111r<twn approach and
the English approach relates to whether an option to terminate the contract
i> available for the breach of an implwl warranty (se.: Table 10.1. Smiat ions
3(t1) and 3(b) ''"d the qualification specified in Sport• Corm ecliori). While no
right of terminlltion exists under English law for the breach of n11y warranty.
express or implied. the Singapore courts ht1ve cl10,cn to make 1he right
available for the breach of an implied worranty provided the consequences of
the breach Jcp1·ivcs the innoct"nt party of 1ub;tantially the whok benefit he
wa, intended to obtain under the contract. 111e right of termination is only
completdy ou1 of reach for a breach of an exprtu warranty •in«' the parties
ha\•e >O clearly communicated their intention that this should be the cast.
We would 1hcreforc reaffirm the approach laid down in RDC Co11crttt
...• subject 10 the eAtrtmtly /11111red txctpt1on tha1. where the 1erm n.elf
states txpressly (as well aJ clrnrly aud 1111a111biguously) that a11y bre.ch of
it. regardless of the scriOU>l1C» of the consequenoes that follow from that
breach. will never entitle the Innocent party to 1erminate the contract.
then tire court will give effect to tlris pnrliwlar type of term (11i:, a
warranty expressly intended by the parties).
To understand the mouvation behind the Singapore Court of
dccbion to deviate from the UK appro3Ch, the Court'> rr.uoning in RDC
Co11rrttc >hould be considered. Th• Court observtd (at ( 1001) th3t the
"Condition Warr.mly approach· would enrnre certainly and predtctabtlit)'
since 1t seek> to uphold what parties intended at the time of contracting.
On the other hnnd, the "Hongkong fir llppro•ch" would ensure fairness
since n right to lcrrn inate is not allowed unless the consequences of breach
(ll'C serious. II would prevt'nl "a pnrly from tcrininaelng lhc contract on
exccs;lvely technlcnl grounds in a bid to escape f10111 unfa,·oural>lc bargains·
(lit (I 00 J). To achieve a judicious balance between fo•tering certainty and
predictability of contract on th• one hand. and fairness 011 the other (see
I109)), the Court prescribed that the "Condition-Warranty approach" should
alw>)-S be apph•d first, before resort to the "Hongkong Fir
It
went on (at I 107)) to prescribe that the "Hongkong l'ir appro..ch" should be
apphed 10 wananlles .. well. also 10 ensure fa1rnes.s.
'lhe Court in RDC Conrrelc recognised (•t ( 1081) that to apply the "Hongkong
Fir appro,ich" to warranties would be to lrcat them "' mnonu nate tenns.
thus obllteratrng the concept of the warranty. Thh very re>uh became the
subject of ncatkrnic critici>m, for ignoring the possibil ity th•t the controcting
p.irt ics might not intend the right of tw nlnntion to be 1wailablc for tl1c
brellch of ccrtoin terms (sec, cg, Goh Yihan, "Towards n Consiste nt Approach
in llrcnch and ·rcrminalion of Contract nt Common Law: RDC Co11uetr
J>te Ltd 11 Snw Kogyo (S) Ptc Ltd" (2008) 24 JC/, 25 I). 1 he crit lque led tl1e
307
(emphasis in the original(
10.74
We conclude this section with J consideration of the decision 111 Sports
Cor111ectio11. The case applied the RDC Co11crcte •pproam and illustrates how
the court ascertains the intention of parties in order to da.sify a term. 1he
court also clarified the precise steps mvolvtd m appl)ing the Hongkong Fir
approach.
10.75
Under a Ois1ribu1orshtp l\grccmctll ("DA"). Sports Connection Ptc Ltd
c•sports") acted as the exclusive local and rtg1ona1 distributor of Dcuter
Spo rts Gmbll'.< ("Deuter) products from 1992 to 2005. When the DA
was renewed in 2002, ll duusc prohibiting Sports from selling •ompeting
products v.rithou1 Deutcr's prior ,,,riucn consent ("'1he non·con,pet hion
daus<'"l was inserted. Sports aml Deuter had an understanding tlrnt the non·
cornpetitiM clause would not be act ivated as long as Spor1s purcha;cJ USSl
million worlh of
products annually. When Sports failed to do so in
2004, Deuter activated the clau;c
sub.cqucntly terminated the DA for its
b1c-ach. Sports then sued Deuter for wrongful termination of 1hc DA.
10.76
1hc.- Court of Appnl apphed the "Condition-Warranty appro>eh" under RDC
Cottcrttt's Si1uation 3(•), and held that the non-competition clau>c wa> not
intended to be • condition a;:
o
Deuter knew Sports sold competing products bolh before and after
inserting the clause into the DA (lit (69IJ:
o
Deuter did not intend the clause to be a strict pvohibition, as evidenced
by Dcutcr's export mnnogcr'; email .ent three days after signing the
2002 OA . stat ing: "As you know we nre dependent Qn you for good
sales success in Southea't Asia. So fnr it /iaJ workrd wi1/1 yo11 srllmg
308
Chapter tO: Term$ of the Contract
Principles of Singapote Business Law
cornpctitivc brands n11d we nre not saying thnt we waut J'O" to stop.
Potentially it poses 11 risk and co11/d ca11se /De11ter/ to Jose what it fins
gnincd. Tllat is wlty 1vc
w11111
result is an abundance of n1aterial scattered in various forn1ats and places,
1
that provides evidence of negotiations •nd agreement. Sifting th rough th is
ma terial to ascertain what part is pu ff, what part arc terms and what part
are representations can be a challenging task for a la"')'er. A ''\vriting" could
nO'f.V' be an c1nail. and it 1nay be necessary to dctern1inr ·whether the contract
has been red uced to writing so as to t rigger the parol evidence rule. In a
tire bcttcfit of you nski11g our t1pprov11/ .. ,"
(at (69J, em phasis in original); and
the non-con1petition clause "rou1d not be triggered if the annual purchase
!argot of US$ I m illion was mcl (al 172 J).
o
10.77
teleconference negotiation. a visual and audio record of '"hat was said would
be available. Jn dctcrrnining whether a particular statement was a term or a
The court the n applied the "Hongkong Fir ap proach" in Sit uatio n 3(b)
through a l wo-slc p process, which involved (at I62 J):
representation, a judge ma)' h ave to consider not 011ly t he traditional rules
found in the cases but visual cues and other pointers generated by advances
First, ascertaining "what exactly constitutrd the benefit that it was
intended the innocent part)' should obtain from the contract"; and
in communicatio ns technology. As technology advan ces, the law relating to
co11tractual terms would have to respond not only in a pragmatic way but
also in a w:1y that is t heoretically coherent.
Second, w nsidcring t he nctua/ consequences of the breach th at had
occurred .at the lime the innocent part)' pu rported to terminate the
10.80
contract.
10.78
The Court of 1\ ppeal noted that Deuter's contracted benefit wos to ensure
that
continued to look
its interests) which included n1arket
penetratio n a nd b rand building fo r its p ro ducts. Although the actual
consequences o f breach were Sport's drop in purchases from USSJ million
to US$788,03 I .45 and the potential compromise of market penet ration and
b rand position o f Dculer products, the court held lhal Deuter h ad nol been
substantially deprived o f its cont racted benefit. Among other reasons (sec
(82J - l8SJ), the court was u ncon vinced t hat t he drop in sales alone would
result in " sub stantial deprivation of benefit (at (78]), given t h at Dculcr's
objectives of market penetration and brand positioning could be achieved
by aggressive promotional acti\'ities o ther than by sales of Deuter's products
(at 11 and (82]).
In add ition, recent developments in the law o n implied terms make it less
like ly that the cour t would impl)' a term in fnL'I where the contracting parties
had e ngaged in extensive negotiations and exchanged several drafts of th e
written contract before conclud ing a fi nal one. In such situations. the cou rt
needs to be convi nced that a t rue gap in the cont ract exists, rather t han
that t he parties had considered particular mallcrs bu t deliberately chose not
lo provide a term to cover them. As to the remedy to terminate a contract
u pon breach of a term, contracting parties should be prudent to word their
con tract terms clearly to indicate if they desire such a remed y. Such clarity
wo\1ld provide certain!)' on the availability of the remedy.
rs
Deulcr was tltus not entitled lo terminate the DA, and in wrongfully doing
so, Deuter was itself in b reach o f the DA. TI1is gave S1>orts the right to claim
damages against Deuter (at (91)).
CONCLU SION
10.79
Co1111n unications technologies hilve rnade telex and facsin1ile con11uunicat ion
obsolete and have rcpl•ccd these wit h email, short message services ("SMS"),
instan t messaging like Whatsapp, and voicemail. In a commercial context, the
309
310
Principles of S1f\g;iport &sintss Law
Chapter 11
INTRODUCTION
I I.I
Exemption Clauses
11 .1- 11 .5
11.6
11.7· I I. I I
11.1 2
11.1 3
11.14 II.I S
11.16- 11.1 9
11.20 11.22
11.23 11.24
Introduction
Incorporation
Incorporation by Signature
Incorporation by Nohce
( I ) Type of document
(2) Time of notice
(3) Adequacy of not ice
(4) Effect of the clause
Incorporation by Previous Course of Deali ng
Exemption clauses. which are also known •• exclusion or exception clauses.
form part of the terms of the contract. 'll1ey are terms that seek to exclude
or li mit the lh1bility of one of the parties in the event or a breach of contract.
Such tern» are common in everyday commercial cont racts, especially the
standard form contracts. 'lhey seek to exclude or limit liability arismg from
the contr•Cl or common law hab1lity that might arise independently of the
conlrnCI, for example, tort liability for loss or damage by negligence (sec
Chapter 6 on tort of negligence). Exemption clauses can be d1ndcd rnto
three types:
( l) exemption (or exclusion) clauses that seek to txrlude the liability
completely:
(2) limitation of liability clauses that seek to limit the lh1bili1y
(cg. to a
certain money amount): and
(3) mdcnmity clauses thot S('<:k to pa>S liability (or the risk thereof) to a
11.25- 11.26
11.27 11.29
11.30 11.35
1 J.36- 11.38
11.39
11.•10
11.41 -1 1.'13
11.44 ll.4S
11 .46 ll.<17
11 .48-1 1.50
11.51 11.60
Construction
Co11tra Proftre11tt111 Rule
Guidelines in the lnlerprel3lion of Exemption Clauses Attompting
10 Limit Negligonce Liab11il)'
Stalulory Limil:ilions 11n the Use of Exemption Clauses: Unfair
Co11tr11ct Terms Act
Contracts to Which VCTA Does Not Apply
Applicability of VCrA to ·susiness Liability"
Applicability of UCTA 10 Negligence Liability
Applicability of UCTA to Breach of Contract
UCTA and Sale or Suppl)• of Goods
UCTA and Consumer Contracts
Test of Reasonableness
11.61 - 11 .66
llxception Clauses and Consumer Protection Legislati on in
Singapore
11.67- 11.68
Conclusion
third party.
The reference to
clause{ in th11 chapter indudcs all thr« typts.
It cnay be noted here that though the ftm two types of exemption clauses
arc essentially similar, the courts are likely 10 interpret the clause< excluding
liability more strictly than the clau;es limiting the liability.
11.2
A review of the law relating to cxe1nption clauses 111ust take into account l\\ 0
developments: first, the idea of freedom of contract where the parties 10 the
1
contract have unrestrained rights to tntcr into contracts of tht1r choosing
and second. the >ubscquenl intervention by the courts and the kg1sl3lurc to
control us CXCC'SSCS.
t 1.3
Under the concept of freedom of contract, the parties must be free to
ncijOtiate their mutulll rights and obliglltions under the contract without
th<!' interference from the courts or the legislature. This would cm1ble the
pllrlies to allocntc the risks and divide the responsibilities of the tran<oction
bet wee11 themselves. Theoretically the parties have liberty to make their
own bargains when they ncgotiale. In reality, the conlracling parties may
dilf'er In bargaining power, and the u>< of
form contr.icts m•y not
help 10 equalise the bargaming power between them. Standard contract
terms are ol\en used (by one party) 10 help reduce the costs of negotiation
by ma» producing the contracL<. Tim ha< given rise to situation< where,
312
Chap••• 11: E!<emptlon Claus.s
for example, a supplier of goods and services Sttks to exclude hlS potential
liab1hty by the use of his own pre-printtd >tJndard contract terms, and he
mar a.-scn 1ha1 he will conu;1e1 an his own lcrms and no 01hcr. This "1akc
Incorporat ion by Signature
11.7
ii or lea\'e ii" oituation affords no choice for the cu;tonter Either ht must go
without the goods or services, or take them subjcCI to 1he cxempllon clause.
It i• apparent thllt such contracts are not freely negotiated.
11.4
11.S
agreement for a cigarc llc vending 111achine. 'lb e contra;ct contained, "in
10 impose
While ii may be acceptable for parties with equt1l bt1rgninlng
exemption clauses, 1he
nnd legislamres hnve been reluctnnt to allow
lhcm when in1po;cd b)' " stronger party on a weakt•r party. 1hc courts have
dlsaJ>proved s"ch clauses and have been sympatheiic towards the weaker party
by intcrprclini:; lhe exemption clauses narrowly and by providing for certain
rcquimncnts for 1!1eir vahdi1y. The legislatute ha< iniervtned by in1roducing
lhc UK Unfair Conlract Temis Act 1977, ntadt applicable in Sinsapore by the
Apphcatton of English Law Act (Cap 7A, 1994 Rev Ed) and reprinted locall)'
as Cop 396.
Rev Ed, and by provuions in olhtr statut•s.
'I his chopter will first deal with the courts' approach to txcmption clausts.
For an cmnplion cla11sc 10 be valid, 11 m11>t S<lllify 1hc rcq111remcnis laid
down by the courts concerning incorporation and construction. The chapter
will then consider the statutory limitations on 1he use o( exemption clauses
under the Unfair Contract Terms Act ("UCTA").
Where a contract is madt In writing, the gentral rule IS that the ptr>on
signing the contract is bound by cvet')1hing contamcd tn the document,
whether he has read it or not. 1hu> o person signing a pre· prinled •l•nd•rd
form contract cannot later complain that he did not rt'ad it before s1gnang.
In L'Es1rn11ge v F Grn11col> /,td ( 1934), the plaintiff signed a lure purcha<e
regrettably >mall print'; tt clause that provided that "any express or implied
condition. slntemenl or wnrranty ... is hereby excluded''. 1\ lthough the
plaintiff had not read the document, it was held that the clousc bound
her, and she had no remedy when the machine proved defective. In Pr,•ss
Automat1011 Tcd111oiogy Pre I rd v Tra11.r-/,111k Exl1ibir1on Forward111g Ptt I rd
(2003) the Singapore High Court held (al (391) that the plaintiff's ;ignang of
a document that cont•antd • clause rcfemng 10 tl'rms in another documtnt
(which mcludtd an exempuon cl•usc), resulted on those terms bt1ng
incorporated into the contract b<twctn the parties. It so held e\'en though
th<" plaintiff did not ha>< ,1 copy of thosr terms and had not read them
11.8
There are three exceptions to iht> 8<ncrol rule:
\\•here
o
where there i11
as to the existence, or precise scope or
extent of the cxcmplion clause: •nd
o
where an express wananty that hos become part of the contract override;
the exempt ion clause.
For an exc1npt ion clau:-ir to be valid it n1us1 l\a1isfy tht' following rt>:quire1nents:
0
the cl3use must be properly incorporated into the contract:
o
11 mu>t be proporly con.trued to se. af it covers the event(>) in quc.iion:
o
II
ond
must not
11011
These exceptions are discusstd btlow.
excluded or rtstrictcd by statute< <uch •s the UCTA.
11.9
A party may be able to avoid a contract that ht has signtd if he can bnng
himself withtn the doctnne of non est factum ("11 was not my dtcJ•). 11us
narrow doctrine is av;iilable e:1pU1•lly to vulnerable (l<'rson• (cg. tht blond
or illiterate)
sign document; under a ntist.tken btlicf a; to their n•turc
or <lfect (see Saamtltrs v A11g/111 8111/11i11g Society (1971), and Chapter 12 p•ra
12.53 onwards).
l 1.10
The general rule also docs 11oc ,1pply where there is any misreprescnrntion ••
to the scope or extent or the exemption clause. In C11 p·ti$ v Clac111irnl C/c1111i11g
1r11tl Dyei11g Co ( 1951). the plaontllr took a wedding dress for clranmg. and
was asked to sign a document which containtd a clause that extmptcd the
INCORPORATION
11.6
est fnctunr is relied on:
o
The courL> will require the (l<'fSOn relytng <)11 311 exemption clau« to show
that the other party agreed to its incorpoMion ln10 1hc controcl at the time
of or prior to the contrnct; otherwise, it will not be p•rt of the contract. An
exemption clallsc is incorporated into the controct in three ways:
( I) by ;ig1rntu re:
(2) by nouce: • nd
(3) by o prcv1ou< course of dealing.
313
314
Principles of Singapoft Business law
Chapter 11: Exemption Clausts
cleaners from li:ibility "for any damage howsoever arising''. When she asked
why her signMure was required, 1he defendan1's employee 1old her Lhat the
,Jause simpl)' meant that 1he cleaners would not a"ept any responsibility for
any sequins and beads. She then signed the document. When she collected
the dress, it had a st<1in which was 001 there before, but 1hc cleaners. relying
on the exemption clause, denied liability. 'lbe English Court of Appeal held
1ha1 even though 1he plaimiff had signed 1he document, Lhe cleaners could
party knew, or ought to have kno,vn, that the docu1nent \\t:.'IS one \Vhich could
be expected to contriin such tenns. In both instances, he n1ust shov.• that he
has done everything reasonable to give sufficient notice of the exemption
10 1he other party. The guiding principle was laid clown in Parker v South
£n5tcr11 Rnilwny (1877). The plaintiff left a bag in the: station cloakroom and
obtained a ticket in return. On the front of the 1icket were printed deiails
such as the opening hours of the office, a11d also the words "See Back''. On
1hc: back 1.as a clause limi1ing the liabilily of 1hc company 10 £10 for 1hc loss
of any ilem left 1vith them. When the plaintiff returned lo claim 1hc bag, ii
hatl been lost. He claimed the worll1 of the bag which was £24. IOs, but the
cornpony mainlaincd Lhat their liability was limi1cdl 10 £10. ' Inc Courl of
Appeal held thal a parly could be deemed to have had reasonable nolice if
he knew of Lhe clause. or if reasonable steps were ta ken to bring the clause
to his notice. As to '"h:lt 1nakes a notice reasonably sufficient ls a question
of fnct. Some of the factors to consider are the type of documenl, the time
of notice, the adequacy of notice. and the ettee1 of the douse. 1l>ese are
discussed below.
not re ly on the exemption clause since the ir employe<! had nlisre presented to
her the extent of the exemption.
II.II
The Singapore Court of Appeal considered lhe issue of express w:irranly
in Anti-Corrosion Pte Ud 11 Bergu Paints Singapore Ptc 1.ttf (20 t 2). Anti·
Corrosion ("A") was a painling sub-contrac1or for building projec1s. Berger
Paints ("B"), a paint manufacturer, contracted to supply A with paint on
four occasions. B initially gave a paint phm according to which it was no1
necessary 10 apply a sealer co;u 10 1he surface 10 be painted. When A had
concerns. B verbally assured A Lhat a sealer coa1 would no1 be necessary
and gave a five-year warraniy on 1he pain! ro be used on any project 1hat
was based on cheir paint plans. 'fhrne projects were completed mccessfully
but on the fomlh occasion. there was serious discolouration of the inlernal
surfaces <>f 1hc building project thai were painted. A sued for ils losses and B
countcr·claimed for 1he balance sum due on the paint sold 10 A. 111e Court
noted (at [24) and [25]) that B's tox invoices and deli\•ery orders were nol
intended to contain n// 1he con1rac1 terms be1ween 1he panics, and therefore
Ihe pi.lrol evidence rule did not prevent B:" verbal assurances :'Ind W'arranty
(the express 1'1'arranty) from forming par! of the contract. 1h>s raised the
queslion as to whei her B was siill eniitled to rely upon the exemplion clauses
conlaincd in their tnx invoices and deliver)' orders to lilnit their liabiHl)' to
A given 1ha1 they conflic1ecl with lhe express warranty. The courl held 1ha1
the cxemptiorl clauses \Vere not effective in light <>( lhe express \\ :.trranty.
The courl said (at 146)) 1hat ii Wl1S well established lhat an exemption clause
contained in a 'vritten con1ract can be overridden by an express \\l'arrnnty
given at or before the Lime 1he contract w;>s concluded.
1
Incorporation by Notice
11.12
'A'here the contrnct is not 'vritten or \vherc the lenns rire ln :an unsigned
docu1nent, the cxc1nplion clause may still be i11c:orporated into the contra.et.
In the latter C'1se. the person seeking lo roly on ii musl show 11,.11
315
olher
(1) Type of document
11.13
An exemption clause 'viii nol bet part of the contract if it is contained in an
unsigned docuinent where a reasonable person would not be expected lo
find contractual terms. In Clinpclton v Barry Urban District Cormcil ( 1940).
Chapelton hired two deck chairs from the defend;.inl at Brighton beach.
There was a notice near the stack of chairs which requesled customers to
obtain tickets from the a1tendai11 and retain 1hcm for inspection. Chapel1on
obtained 1he 1icke1 and pul ii lnio his pocke1 without reading It. Whon
he sat on one of 1he chairs. it collapsed under him. He sued the Council
fol' damages for his injuries, bul it sought to rely on the exemption clause
pri.ntcd on 1hc ticket. 1hc Eni;lish Cou rt of Appeal held the Council liable.
ll held that !he clause that w•s printed on a t ickct was noL a term of
conlrnct because the ticket in this case 'vas not a contractu3l docun1t::nt. No
reasonable person would expect to find conlr:lCtual tenns on such a ticket
since it would be regarded shnply as a receipt for 1noney paid. However. the
reader is :idvised to consider this decision in light of current pr:ict ices :ind
expectations about docu1ncnts containing contractual tenns. For instance, it
is a rguable thnl a reo<onable person would cxpccl lo find conlracmal lerms
on a movie ticket.
316
Chap1tr 11 : Extmptlon Ctauses
Pr1nc1plts of Singapor·e- Business Uw
takes place when the customor puts his money i.nto the slot. Tut trrms
of the offer art contained m tht nohct plactd on or ntar tht machine
(2) Time of notice
11 .1 4
I I.IS
For the <>emption clause to be effe<tive, the nouu must be 8"'en before or
at the dme o( the contract. A notice given afier the contract was made is
ineffective. Thus. in 01/ey v Mar/boro11g/1 Court l.td ( 1949), a couple rented a
hotel room for one week and paid in advance. Upon entering the bedroom
they saw (t notice containing an exemption clause thot exempted the hotel
from liabilily for loss or thefi of articles, unless they had been given to the
managcmenl ror safe custody. Laler, their properly was slolcn. 1hey sued the
holcl who lhc n sought to rely on the exemption clause. 'I he E'1glish Court
or Appeal held tlutt the clause was not incorporated into the contract. 'lhe
conlracl was alrcndy concluded at the recrpt ion drsk when the hotel agreed
to take the couple as guests, and therefore, the notice given on the bedroom
door was too latr.
stating what
tS
bound by those
l l.16
The person relying on the exemption clause must show that he did take
reasonable steps to bring the notice to the anention of the ot her party. This
means, among other things, that the noticr must i,., sufficiently compicuous
and legible. There 1s no need to show that the injured party had actual nollct
of it. In 11rompso11 v l.011dor1, ft/1dla11d n11d Scottish Railway GO (1930), the
English Court of Appt'al held that thr ttst of rca..,nabl)' sufficient notice
had been S<ltisfied. The plamtitf, an illiterate, asked her niece to purchase a
railway excursion ticket for her. On the face of the ticket were the words,
"For conditions •«
On the back of the ticket were the words to the
effect that the ticket wns issued subject to the conditions set out in the
defendant company'.< time tnble. 'I hompson suffered an injury and sued the
defendants. ' lhc court held that rcason•bly sullicicnt notice had been given.
In
context the ticket was a common form of contractual document. Since
it did refer to the time tahle, the clause was held to be nn inlegral part of
contract. '!he court did not co11>i<kr 1hompson's illiteracy to be relevant.
However, lhe decision docs seem wrong bee<1use ii is questionable whether
the steps taken by the drfendant to bring the exemption clause to the notice
of the plaintiff were adequate (M't paras 11.20-11.22 on what would bt
considered rt.sonablr steps m the
of onerous exception clause>). The
de<ision has also been cn11c1<ed by many. including Lord !Xnning m Gtorgt
Mitclitll (Cl1tsi.rlwl/) v f'i1111ty L«A Suds Ltd ( 1983)_
11.1 7
A different outcome may result where th< party relying on the exemption
clltuse knows from the very beginning lhJt the injurrd party is under some
a machine issltcd a ticket which contained primed words thar referred to
conditions displayed in another part of the car park. 111ornlon did not see
the conditions. which included an exemption clause denying liability for
dllmoge to propcl'ly and pcrsonnl injury. Thornton suffered an injury due
to an accident while collecting his car. Ile sued and the defendant sought
to rely on lhe exemption clause. 'lhe English Court of Appc•I held that the
defendant had failed to prove reasonable ;ufficiency of notice. '!he contract
was formed when 111ornton paid his money into the machine which later
inued the ticket. For the exemption clause to be incorporated, there must
h.--c bern rrasonable sufficieng• of notice pnor to or at the time of contract.
A notice on the ucket would be too late. Similarly, a nouce located at a
d1ffrrent $ection of the car par!; would be too late. The follo..,ing obittr
statement by Lord Denning MR (at p 689) 1s ,·cry m'trucuve:
3t7
offered ror the money, The cus1omer
(3) Adequacy of notice
A s1m1br is•ue arose m Thornron v Shoe l.nnr
I.Id (1971). Thornton
parkrd his car m the defendant's automated car park. There was a notice
at the <ntrance which stated: "All cars parked at owners'
Upon entry.
The customer pays his money and gets a ltcket. He cQnnot refuse it. He
c:.1nnot gel his 1noney back. He may prolcst to the rnac.hinc,, even sv.·ear
ut it; but iL will remain unmoved. llc is committed beyond recall. lie was
commiHed (tl the very moment when he put his money into the mach ine.
'Ihe contract was concluded at that time. It can be tr:rnsloted into offer
and acccplltncc in this way. The offer is made whm the proprietor or the
machine hold< it out as being ready to receive the money. 111e acceptance
tS
terms as long as they arc •ufficiently brought to his notice beforehand,
but not oth<rwisc. I le i> nol bound by lhe terms printed on tht ticket
if they differ from the notice. because the ticket comes too lnte. Tur
contract has already been 1rntde.
dis.ability. In Geier v Kujnwn, Weston 6- Wnmc Bros (Trnnspo11) J,td (1970).
Geier. who could not understand English, wns a passenger in a taxi where
the-re was a notice in l:!nf!lish co11t(lining an excn1ption clause. 'lhe driver
realised that Geier did not under.land English though he pointed to the
exemption clause. 1n an act ion by Geier. the defendant sought to rely on the
318
Ptu1ctplts of Smg;;iport Busintss Law
Chapltr 11: El<emprion
exemprion cl•use. The court held that there was no rtouonoble sufficiency o(
notice. •ince the drhrr knew o( Geier's disabilil)' but did not lalt reason.bit
steps 10 translate the noti,c. This
that m Smga1>0rc, with its mulrtraci•I and multi hngual population, extra st<ps m•)' be needed to bring
tl1c cla11>e to the notice of persons known nol 10 undcr>tand the language
of the clnu<e.
11.18
Adequacy of no1 icc was also in issue in 1wo Singapore caSC$, Jet l/o/di11g
l trl v C11opc1 Cm11cro11 (Si11g11porc) Ptc Ltrl (2005) nnd Wa1 1sila Si11gnporc
Pie 1.trl v l.1111 Yew C/10011g (20 17). In Jet Holrli11g J.ttl, the plaintiff. the
owner o( lhc oil cxplora1 ion drill ship, Elli·rgy Se111d1cr, sued 1hc d<fcndan1
for breach
contract when the ship's slip joint manufaciured by the
defendant broke into two. The defendant tried to rdy on >tandard form
exemption clau>C> that it claimed had been incorporated into the contract
by way of • uparate provision in a sale> quotation The •«mphon clauses
were not printed on the r<wrse of rhe quow1on but wtrt mettly referrtd
10 m the note> to the quotation. The Singapore I h&h Court noted (al
I11 2)) that ther< was difficulty in estobhshmg what exactly wer< the tenns
and condition.< of sale thJI formed parl nf the sale< quotation. Accordingly
the courl held (al (114)) that inadequate notice was givt•n •s the •1andard
form clnu>C> involved should haw been brought foirl)• and reasonably 10
1he plaint iff's uucntion "by pointing thern out , 1norc so when 1he •errns and
co11dil ions we1·c not printed on the reverse o ( the <Juornlion." Consequently.
the cxempli01\ clause. were nol incorporated into 1hc contract.
(4) Effect of the clause
t 1.20
'I his issue is relat<'<I to the i.suc o( adequacy of notice discussed above. 1nc
case law indicates that the more onerous or unusual the clau5<', the gr<attr
the desrcc of notice requir<d lo incorporate it. Such clauses cannot be
incorporated simply by handing O\'er or displaying .a document containing
1he- clause; the party seeking to rel)' on it must take spe<ial step; to draw
alle ntion to ii. This principle formed part of the reasoning in 7J111r111011
v Shoe La11e Pnrki11g Ltd (1971) (sec para 11.15). Although it w.1s fairly
common for car park condlllons lo exclude liability for damasc to cars,
exclusion of liability for personal Injury was no1 a term that molorists would
usually expect in such a transaction. 1hus. !hough the steps takrn bi• the
proprietor might have been suflic1cm to exclude or limit liability for property
d:unage. they could not be deemed 10 ho\'e gh'en suffie1ent nohcc or the
more unwual term concerning pcr)onal injury.
11.21
This issue was h1ghhghted •gain 1n lmrifoto Picture L1bmry v S11lt110 \'mm/
Programmes Ltd (1989). 1ne defendant> wert an advertising agenq• who had
hired photographic transparencies from the plaintiff& Stileno had not deoh
with Jnterfoto before but, on request, lnterfoto delh·cred 47 photograph<,
along with a delivery note. 'lhls slated that the pictures should be returned
wi1hin 14 days, and Included n list or conditions. One of the condi11ons w.1s
thl\l if the pictures were kept longer lhan t4 days, they would be charged
a holding fee of £5 per picture per day until they were returned. Stilcllo.
appar<ntly without reading the conditions. decided that the pictures were
not suilable for 1he1r purpose, anJ put them aside. When they reiurned the
pictures almost a month Inter. lnt<•rfo10 mbmilled an invoice for holding
not
fct> of EJ.783.50. The Enghsh Court of Appeal held that Stileno
contractually bound to p•)' the charge. The daily charge was much h1ghtr
tha.n what would usu•lly be charged. The lcrm w;is merely pnnttd on the
pl:unlitrs standard terms. wherca; due to its particularly onerous nature.
it called for a greater degree
nouce. The coun quoted, wnh appro,•al,
Lor d Denning's stolcnwnl 1n Sp11rl111g v Brnrls/1aw (1956) (al p 166) to the
effect tha1:
or
11.19
In Wr1rts1/11 Si11g11por<, 1he defendant al>O argued thal a re(e'°nce in the
quotation prondcd sufficient notice to mcorporatc us general term>
and condnion< into the contract. Howe\'er, the quotation referred to the
company's "Genrral Conditions o( Sale & Services", whtrt•s the actual
title o( the docum<nl w>.s "Gtntral Temi; and Condmon> Stnice Work".
'Ille Singapore High Court nottd (at 1118)·(119) and (123)) th at tht laner
pr0\•1$1011' were inttnded lo apply to >ervice work
different nolure
and exten1 thun the work performed under the quotation. Because of the
dissim1larhy in wording and the differins contexi., the court held thOI a
re.isonabk rca dt'r would not hav('
the: rt...ftrcncc in the quotation
to be 11 n:Ccrcnce 10 1he company'> "General Terms nnd Conditions Service
Work': As no reasonable notice had been provided, 1hese lcrms were not
incllrpo1"Jlcd Into the contract.
or •
319
or
Some clauses are so onerous they would need to be printed In red lnk
on the face of 1hc document with a red hand pointing 10 it before notice
could be held to be :,ullicicnl ,. . onerous or <:1ppressiv1t clauses 1nust
be drawn clearly to the other party's notice, otherwise they will not be
incorporated.
320
Principles of Singapofe Business law
Chapter 11 : Exemption Clausts
In the instant case, the court allowed lntedoto to recover £3.50 per week
fo r each transparency returned late, as being a reasonnble sum due on a
11.24
q11a11t11111 mcrui1.
11.22
The p rin ciples in t he /ntcrfoto and 'flrornton decisions have also been
applied in Sin gapore cases. In Holland l,ccdon Ptc I.Id (i11 liquidation) "
C & P Transport Pie Ltd (2013), the p laintiff company sto red mernl coils and
for dan1age caused by fire ro custon-1e1'S• cars on the pren1ises." The plaintiff
ma.de an ornl c.onlract to h ave chc c.ar repaired. 111e car was destroyod by
steel sheets in t he defendant's warehouse. The defendam sought 10 rely on a
p rovision in the warehousing contract which restricted its liability 10 a sum
of S$ 10,000. The High Court noted (al 1221!- 12231) that this provision was
of an onerous nature as ii imposed a limit of SSl 0 ,000 which was a tenth
o f the logistic industry's standard limit of SS I00.000. 111c lim it was also less
than the defendant's cost of services for o ne mon th. Ahhough th e defendant
had di:.;cussed the lcrn1s o f the quotatio n '"ith the plaintiff, this was deen1ed
insutlicien l as the defendant had not specifically brought Lhe wnle nls of the
provision to the notice of the plaintiff.
fire, owing to the defendant's negligence. Although no form had been signed
o n this occasion, the defendants argued that this clause \'/US incorporated
in to th e contract by previous course of dealin g. 'I he English Court of Appral
hcld that the previous course of dealing in th is case was not sufficient 10
ju<lify the inclusion of the exception clause.
CON STRUCTION
11.25
The incorporation o( :in exetnption clause into
11.26
In trying lo li mit the scope an d applicability of exemption clauses, the courts
have used d ifferent approaches in t he const ruct ion of contractual terms.
These include t he following:
Incorporation by Previous Course of Dealing
11.23
\\/'here the parties have previously rnade a series of contracts) and those
contracts contained an exe1nption d ause, Ihat clause 1nay have been
incorporated i n a subsequent contract even though neit her P'lrlY made a
reference lo it at the time. In Spr,,./i11g v Bradshaw (1956), t he pan ics had
been do ing business togeLher for many years. 111e defendanl delivered
eigh t barrels o r oran ge juice 10 the p l:tintlffs, who were warehousemen. for
storage. He 1·eccived a document from them, acknowledging the receipt of
the barrels. Words o n the fron t of t he document rckrred 10 cla.uses printed
o n the back. One or them exempted the plaintiffs "from ;my loss o r dllmagc
occasioned by the negligence, wrongful act or default" of themselves or
their employees. W hen the d<fcndanl went 10 collect the barrcl.s, the)• were
empty. He consec1ucntly refus<d to pay the storage charges and t h e ploinliffs
sued for recove ry. He counter·clainled fOr negligence and Lhe plaintiffs
sought to rely o n the cxeanptio n clause. lbc defendant argu ed thnt the
clmrne wns 1101
because ii was only se nl 10 him afier 1he
contract had been concluded. However, he ad milled that he hod received
sim ilnl' d1>C111nen1s enrlier buc he had never bothered to read them. 111e
court held that the dause was Incorporated Into t he contract by previous
course of dealin g.
321
In order fo r a term to be incorporated on the ba.<is of a previous cou rse of
de3ling between the parlies, the course of dealing must b e well C>tablished.
In Hollier 11 Raml>ler Motors (t\MC) C,rd (1972), the plaintiff had 1aken his
car for repair at the detfndant.s' garage three o r four ti1nes in the previous
five years. Each time a forn1 containing an exen1ption clause had been
signed. 111e clause contained the words: "The conipany is not responsible
a contract does not
nutomatically exempt t he relying party from liability. Once ii is established
lho.t the clause is part of 1he contract, the next step is 10 construe or interpret
1he- ''*'ording of the clause to detennine whether it actually covers the breach
th at has Occurred. 1he inlerprelaliOn o f the clause j s important because il
determines the scope of protection available to the relying party.
o
the contra profereutetn rule; and
o
guidelines in the interpre tation of exen1ption clauses aue1npting to
exclude 01· limit negligence liability.
Contra Proferentem Rule
11.27
·n1e Latin p hrase contra profcrcrlS means, against the m aker. Before the Unfair
Contract Tcn n.s Act was pnssed. the courts used the contrn profcrl!ntc1n
rul.c very
to interpret tJ1c cxe1nption dau.s1:s in a way that 'vas least
favou rable to t he person who inserted them into t he contoct. If there is any
do1.:.1bt as to the 1ncaning and scope of the cxe1nption clause, the a1nbigui1y
will be resolved llgain;t the party who is l'clying o n it. An illu>tralion is
322
Ptu1ctplts of Smg;;iport Busintss Law
Chapltr 11: El<<mprion
rhe case of Ho11gl11on v Trafalgar lllsurnnu Co
An insurance polic)'
txdudtd claim> in cases where the car was carrying ·any load in excrss of
that for which the Qr w;i,
The car
a
bu1 wa.s
carrymg six people al rhe time of the acciden!. lh< English Co11rr of Appeal
held 1ho1 the word "load" should be gi"en a narrow interpretation, referring
to goods "'d not people. The word could refer to \\'eight as well as the
nun1ber of passengers and hence \\!"as ;:unbiguous. Conitcquently. the clause
(al )24)) that • lin111a11on cbusc could reduce rhe amount cla.1mable to such
an extenr rhat it actually b<comts a rota! exclusion of liabilit)' claUSt.
Guidelines in the Interpretation o f Exemption Clauses
Attempting to Limit Negligen ce Liability
I I.JO
did not exclude 1hc insurer's liability.
11 .28
Since 1he passing of the UCTA, the courts have been more resirained in
applying 1hc r.mlm proferentem rule 10 regulate the use of exemption clauses.
TIIC Engli>h COlll I> hove recently cautioned thot the cmrtra profcm1tt111 rule
only appl)' when the language of the exemprion clause is ambiguous,
and not when the natural meaning of the clause is clear (>ee Impact F1mdi11g
So/1111011s l.1tl '' i\/G
lns11rn11ce Ltd (2016) at 161 and )35)). In add1l1on,
the courr ma)' bt slow to apply rhe rule when lh< contract concerned is
of a commercial noture and negotiattd bctwrrn parrie> of equill barg>ining
power (<er Trm1soun11 Drilli11g UK ltd v ProV1tlr11rr Rrso11rus pie (20t6) at
of the exemprion clause, which stated 1hot company was "not rc'pon<ible
for damage caused b)' fire to customers' cars on the premises" and th>t
customers' cars "were dn"en by ;raff al 0\\1lers'
The Enghsh Courr
of Appeal dis;igreed II held that the clause was not sutfic1entl) clear and
unambiguous to co,·er n•ghgence since 11 was poSStble to interpret the
clause a> attempting to exclude liabih1y for fire damage caused. both by and
[ 14) and [20): Pcrmmnon Honus Umittd " 01'r Amp 6- Pnrt11m l.imitcd
in lhe absence of ncgligt•ncc.
(2017) at (521 to (53]).
11.29
'! hough technically the conlm profcre11te111 rule llpplics lo oil exemption
cla11>cS. rhc courts have tended to apply it less rlgo1011sly to those that
merely limit liability rather rhan exclude it completely. 1hus, in Ailsn Crnig
f'isl1/11g Cu Lttl v Jl./n/vem Fis/ii11g Co Ltd 1111d Swmror (Sco1/n11rl) Ltd (1983),
S<curicor had conrraclcd to provide security ••rv1cu for certam sh1ps moored
in Abcrdren harbour. As a result of thdr default. two >hip• ••nk. A clause
m the contract limited Securicor's liability to £1.000. The <h1powners claimed
th3l the clau;e wa> ambiguous and should therefore be interpreted in thtir
r."our. The Hou.<e of tords upheld Sccuncor\ reliance on the clau.<e, 51aring
that lim1ta11on clau>« need nol be corutrurd a> •lnc1ly u exclusion clauses.
1,umtarion clauses art more likcl)• to express the genume mtcnllons of the
parlie>. and to be considered as part of the bargain than exclusion clauses.
lhe Slng11po1e High Court followed Ailsn Craig In Rnplwtn Asia Pte Ltd v
(;fobal Co11lnlner Fmglil Pie Ltd (2002) (01 [63)) and PT Soonlee Mctnlinrlo
P,;rk11s11 v Sy11agy Shipping Pie Lid {2007) (at J76J and J79J). I lowcver. the
court will consider the substance of the cl:iusc 10 determine whether it is
effectively a d '1usc t h'11 limits or excludes llabilll)'. 'lhe S111gaporc liigh Court
in fi11y11y f!lllerprises /,td v Skylift Co11Sol11lntor (Pt<) I Ill (2006) pointed out
323
In cases of negligence. the party relying o n the cxemprion clause mml •how
that clear words in t he dllu>C fully cover his negligence liability. Where the
clause does nol clearly cover negligence. the courts have hdd th111 the
exemption clause is inapplkoble. In Holl/er v Rambler Motors (AMC)
Ltd (1972). where the pl•intifl"s car was damaged by fire caused by the
defendants' negligence, the
argued 1ha1 rhis fell \vithin th• scope
I I.J I
Wh ile it is i>ossiblc for a contracting party 10 exclude linbilit)' for his own
negligence by the use of clenr words. the cour ts are also nware 1h111 ii is
inh erently u nlikely thal one party will readily agree lo allow t he ot hrr to
exclude liability for his <>wn n<gligencc. In view of such >ilualimu, the
courts have evolved certain rules of construction. Jn Cauadt1 Steanuh;p l .111u
l.ttl v R ( L952). the courr
m out the following guidelines:
(I) If a clause
language "hich expressly cxc:mpl> the party
on the exemption dause from the consequences of his own negligence.
by the use of the word
"negligcnco" or a •ynonym, then dTect
must be given to the clause;
(2) I( the first rule is not sa11<fied, then the court will proceed to •pply rh<
second rule. Under the ;econd rule, the court must con;ider whether
the words used arc wide enough. in their ordinary mennlng, to co"cr
negligence on t he porl of the part)' relying on the exemption cla11>c. I(
there is any doubt as 10 whether the words are wide enough to 'over
negligence. the doubt must be resolved against tl1e pa.r ty relrrng on the
clause: and
Chap1er II : Exempiion Clausts
Principles of Singapofe Business law
(3) If the second rule is satisfied. the court must appl)' the third rule and
c.onsider \\1hether the cxe1nption clause 1na)' )'Cl cover son1e kind of
liability other than negligence. If there is such a liabili1y, the clause will
then apply to such liability and will not exiend 10 negligence.
11.32
The third rule is conu·oversial, as i1 forbids the cou rt ro immediately conclude
tha1 1hc cbuse covers negligence liability even when an imerpretotion u nder
the second rule suggests that it docs (sec Wee Ling Uio. '"lhe Application
of the Morro11 Principles in Cnrwdo Stcmnship Lines lid v 111c King in
Singapore Reconsidered" (20t6) t7 Aumalian }&urnal of ,1sinn lnw t- 20.
at p 6). 'I hus, both 1hc English and Singapore courts do not apply 1he 1hird
rule literally but prefer 10 apply the rule taking accoun1 of the factual context
of the case.
11.33
The English decision in HIN C11s11alty and Gcncrnl /11wra11ce Ltd v Chase
Mar1/1atta11 Bank (2003) is an illustration of t his approach. The case involved
an exclusio n clause in insurance policies thnt were procured b)' brokers on
behalf of a financier of films. 1l1e polkies insured the financier against the
risks of non repayment of loans made by them to film producers. The clause
Sl3tcd that lhl'
"will not have any duly or obligation to
make trny representat ion, warramy or disclosure of any nature" and "shall
have no liability of any nature to the insurers fo r any information provided
by any othn parties''. 'I he House of Lords decided that the clause was
in tended to protect the insu red-financier against i ts brokers' negligence. 1l1e
b rokers and not the insured. had intimate knowledge of the commercial
prospecls o f the film and the risks of non-payment. ' I he insured was therefore
protected against the negligefll misrepresentMiOn$ or non-disclosure of the
b rokers. even though the clause also covered noa>-negligenl liabilities (such
as innocent n1lsr<:prcscntalion or non·disclosurc). lilt-I's approach has been
ro!lowcd by the English Court of Appeal in Lictor Arrsnlt " MIR Steel UK
(2012).
11.31
goods. The lessee's insurers paid for t he damage and then sued the landlo rd
for the sum paid. The landlord argued that the exemption clauses in the
lease agreemen1 protected it from liability, especially cl 36.l(b), which staled
that the landlord. its otlicers. servant.<. employees and agents should not be
liable o r in any war be responsible for any injury or damage to persons or
property, or for any consequential loss resulting from an entire list of even1s,
"unless caused by the wilful rniscondnct of !the landlord! or [its] officers,
servants, c1nployccs or agents':
11.35
in negligence.
STATUTORY LIMITATIONS ON THE U se OF EXEMPTION CLAUSES:
UNFAIR CONTRACT T ERMS
11.36
The Singapore Coua·t of Appeal in Mari1111 Centre /-loldi11gs Pte lfrl v Pars
Carpet Gallery Ptc Ltd ( 1997) also adopted o contextual approach in
applying the Cmradfl Stmmship guidelines, in this case, Pars Carpet Gallery
("t he lessee") leased certain premises rronr Mareno Centre Holdings ("the
landlord -lessor") under a lease agreemenl. During I he term of the lease. an
:lir· c.o nditloning pipe 'vithin Hie fnls:e ceiling of n neighbouring lUlil burst
and leaked water that seeped int<> the lessee's unit and damaged the lessee's
325
The Court of Appeal held that the landlord could successfully rely o n the
exemption clause_ Applying the Cn11ad11 Steams/rip guidelines, the court held
(at I 13]) that the cl 36. l(b) did not satisfy the first test - It did not conrnin
the word "negligence or :my synonym of it and therefore did not expressly
exempt the kssor from liability in negligence. As 10 the second test, the court
held (tit 1211) that the qualifying words al the end of cl 36. l(b), namely,
"unless caused by wilful misconduct of the landlord or its officers'; clearly
implied that negligence liability was covered by the clause. Regarding the
1h i.r d test, the COL1ft held (al 1471) that when the clause was construed within
the context of the case, it should nor cover the non-negligent liabilities
suggested by the
lawyer. 1 his wus because in the context of the case,
breaches of the lease agreement (eg, involving falling plaster or gas leaks) for
which the landlo"d would be liable would necessarily involve the landlord's
negligence. ·me parties must therefore have con1cmpla1ed protection of the
landlord against tits negligent breaches of the contract. As such, the second
and third tests were satisfied and the clause was effective to exclude liability
ACT
With 1he proliferation of exemption clauses, ii was only a matter of time
before some parties sought 10 abuse them by Inserting unfair terms i n
contract.Ii. ·1he 1nosl effective \.\1ny to retnedy lhis situation \\1as by legislation.
The legislature ill the UK intervened by passing the Unfair Contmcl Terms
Act 1977. As mentioned. this Act is now port of the law of Singapore
(published lornlly as Cap 396, 1994 Rev Ed) although some seclions have
been excluded from the Singapoa·e legislation . 1l1ercfore, contracts that are
governed by Singapor·e law that con tain exemptio11 clauses may be subject
326
Chap••• 11: E!<tmptlon Claus.s
to lhe UCTA limitations. However, the UCTA does not purport to ch>nge
lhc common law rclaling to exemption clau>f'. It i> therefore ncc<'ssary 10
consider whether the clause is incorporated into the commt and whether
the wording of 1he clause covers 1he broach (or evenL•) that occurred first,
before considering the
applicability and dfecl on the clau>e.
11.37
11.38
The UCl'A will apply lo contracts and lo exemption cl:m;es that fall within
its scope. In this context, it should be noted thoc the title of the Act is
so111ewhn1 misleading in rwo respects. First, UC'f'A applies 10 exempt ion
clauses not c>nly in contract but ali;o in non-conlractunl .s11uatiQns like 1or1
(sec s 2). Second. despite its title, the UCTA docs not ann to prO\'idc a
general standard of fair and unfair contract terms. It docs not deal with all
the unfair tenn< m a cont·ract, only unfair exemption clauses. Most o( the
pro\'h1on> o( lhc UCfA appl)' to "busine.s liability" (defined in s I (3)) or to
"consumer transaction> (defined in• 12).
lhc pnmari• focus of the UCTA is to protect the parties. r•p«ially the
cOn>umer.. Add111onally. the UCTA applies even 111 non-consumer or
non huslness situation,< where exeniplion clau>es arc invoked tn cases of
misrcprc>cntJlion. An exemption clause thnt io regulated by thc UL"'IA could
either be rendered lot•tlly inoperative, or • llowed 10 operate If It passes a test
o( reasom1bleness.
Contracts lo Which UCTA Does Not Apply
11.39
'!he Fir.t Schedule 10 the UCl'A lisis contracts to which the regulaung
sec11ons. ss 2-4. wtll not apply an relation to
clauses. Under
para I F1N Sch«lule. these include contract< of insurance. Scc11on• 2-4 are
also inapplicable insofar as certain conlrocu deal with lhc following matters,
nnmcl)·. contracts relatmg to the creation, transfer or tern11nat1on of rights or
1111ere<1s in land or intellectual property: contract< relating to the
formation or <lis.olution of a company, or to its cons111u11on or the rights
and obligltlions of the corporation or its members: and contracts relating
lo the creatio n or trnn<fcr of securities or any rlghb or interests therein.
Pnragrnph 2 1-'irst Schedule provides that where marine sal"ugc or towage
contracts. ship or ho\'crcrafl chartcrparlles, or co111rncts for lht> corrlngc of
good.< h)•
or hovercraA nre concerned. ss 2(2) 4 and 7 will not appl)' to
thc)lic contraclS except in favour of a person ..dcoling ;\). 3
Further)
In relation to contracts involving the carnage of good< by >hip or hovc1·craA.
327
where the means o( carriage are concerned, para 3 of the First Sch«lult
excludes the applicability o( <S 2(2) 4 as well, again except in favour o( a person
"dealing as a
Paragraph 4 First Schedule pro,;dcs 1ha1 s 2 ,,,11
nor apply to clauses e<cludmg or re•tnctmg negligence hab1hty m contracts
o( employment. except m favour of the emplO)'l!e. Lastly, s 26 UCTA
excludes from its purvie1" cc11aln international supply contracts (<ee, eg,
Tridem Turboprop (Dub/111) Ltd v First Flig/11 Couriers Ltd).
Applicability of UCTA t o "Business Liability"
11.40
Sect ions 2-7 are the primary provisions in Lhe UCTA governing exemption
clauses. Under s 1(3). the<c >CCl1ono apply in the case of both contract
tort, where the exemption clau>e 111 que.tion concerns a "bu;incss
'Ibis is a liability for "breach of obligations or duti.s arising from thing;
don• or to be done by a person in the courst of a business (whether his
own or
"8u51ness mcludrs a profession and the activities of ani·
Government department or local or public authority (s 14). Thus, the s' 2 7
regulating sections would •pply onl)' where the exemption clau<e purports to
exclude or lm11t a busines.< lt;ibihty.
Applicability of UCTA to Negllgence Liability
11.4 1
"Negligence" is
Ins I ( I) UCTA as either the b1·each of "any oblignrlon,
arising from the express or implied terms of a contract. to take reasonable
care or exercise reasonable •kill in the perfornlnnce" of that conrract, or
the breach o( "any common law duty to take reasonable care or exercise
reasonable skill (but not any >tricter
This defillition indicates that the
UCTA, despite its name, •ISO apphes to
o( negligence that anse outside
o( the context of contract. Section 2 conlirms this •icw.
11 .42
Section 2(I) UCl'A slate> that a per.on cannot exclude or re$1rict lus hab1lity
for death or personal in1ury resulting from negligence "by reference lo
a contract term or to a notice given to persons generally or to particular
person<'. 'T1ie inclusion
I he word "notice" implies that this provision
UC1'A would opernle also In cases where there is no contr:ict between the
party seeking to exclude or limll liability and 1he party who was harmed.
By necessity, the former can only rcl)' on a disclaimer notice rorhcr than
or
or
328
Principles of Singapofe Business law
Chapter 11 : Exemption Clausts
a contract tenn to exen1pt liability. Section 14 reinforces this view·. as it
t11ia, th:'ll tl'le ''-'Ord ''notice" ''includes an announcen1ent,
whether or nm in \\'filing, and nny other communication ()r prc1cnded
conununicatio 1l".
Step 1
provides,
11.43
Applicability of UCTA to Breach of Contract
11.44
Step 2
Sw ion 2(2) UCTA deals with damage 01her than dea1h or per.<onal injury,
fo1· example, property damage. The sub·section provides that in cases of
such loss or damage, a person cannot exclude or restrict his liabili1y for
negligence except .. insofar as the tcrin or notice satisfies lhc requircn1cnt
of reasonableness''. The requirement of r'"'sonableness is dealt wilh in s 11
UCl'A (see pa.rn 11.5 1 onwards).
- - - 'N"'o'---
..
....,
O....,.oommon law ff!l'lnc1kim
!
Step 3
Which relov11nt ••ct!on(•) regulato(•) EC?
Thi$ (tll)gt3m ()t'ly $h0\Yi l'e9Vltttli)n OI EC vndef $$ 2 And 3
Other f91)td8dng sections (eg, $.S
not shown
/
EC exciodes or resttlcta hablllty
due to negtlgoneo (fff • 2)
I
Neglloonce
ft'4.lllSW'idt.atf\Ot
EC oxclude.s or restricts llabillty lot brNch of
oonvacc bot'Nffn contrttiC1ln9
wneto (se.
• 3(1)):
And/Or
one of them 'deM as a
12/:0ll
!
Negttg&nco 1otul1$ In
olher darMges
lfll ub:Sfles toil
EC is not
(MM s
one ot them deals on the other contracbng
par1y"'a wr1uon stttnd•td lomll5 or Mlnoss
personal injury
(sees 2(1))
11.45
r
}
I UCTA applies I
liability fo r breaches of contract. 1he section provides that such exe1n ption
to the exe1nption clause e ither "deals as consu1ner" or deals 011 the relying
pnrty's "written standard terms of business" (see s 3( l) UCTA). 1lie issue
as Lo when a contrncting par1y ''deals as consumer" is discussed further
at para 11.48 onwords. As to dealing on the relying party's written
standard terms of business, this refers to the sit11ation where the party
subjected 10 1he exemption clause had co1macted on the o ther partits
stondard controct lerms, which included the exemption clause that the
J;1tter wishes Lo rely on.
(seo s 1(3))
Y••
Section 3 UCTA regulates exemption clauses that excludes or restricts
chn1ses are regulated only where the contract ing party '"ho is $Ubjected
Does the EC exempt or limit "bu•ln••• liabillty"?
ot reasonableness under
"' <••.. 2(2))
Whore EC 1$ used by.
J)&rty tlQ;'.llifttC.
consumer and/or party dealing on !he firat oontraaung
parly's writlen standard torms ot business to:
exclude or reslnct lability In respect o4 broach of
conlft'ttt; OA.
clalm to be entilktd
(1> to 1al'ldot 8 l\jbl13Mllly dlntron1oontrl)Cl\J.111
periormance from th1u reasonabfy expecltd ol
hlm; OR
(10 (O 1e1ldet no (*tOM'ltne:e et •11 for lho wh04e Of
part of Nt contt.a:u011 Dt*gattont
Section 3(2) p rovides that an exemption clause in a consumer contract or
a standard form contract can be relied upon by the party who is in bre>ch
of contn\Ct "insofar :1s ... [ii) satisfies the require1nent of reasonableness":
The section regulates the use of exr1nptio n clauses to restric11 or exclude
liabilily for the entire range of breach of cont rnct situalfons. This includes
situations of 1he party in breach relying on the exemptfon clau>e to exclude
or restrict liability in respect of the breach. or claim to be entitled "to
render a contractuol performance subslanth1lly differenl from thal which
was reasonably expected of ltim; or ... in respect of the whole or any part
of his contractual obligation, lo render no perform1111ce at oil': To illuS1ratc
how ss 2 and 3 operate, see f'igure l l.l.
329
EC alowed 1f il 5at1afle1 Ifft of
rea.sonablenfis under t 11
(101'1 $ 3(2>)
Figure 11 .1 Regulation of exemption douses ("£C") under ss 2 and l UCTA:
An llluslrallve lramework
330
Chapter t1 : Exemption Claum
Principles of Singapote Business Law
HO-\\fever, a buyer in a sale by auction or co1npetitive tender is not regarded
as dealing as consumer (s 12(2) UCTA). 'The burd<n of proof rrsts upon the
UCTA and Sale or Supply of Goods
I J.46
Sect ion 6 UCTA deals with the contracts of sale and hire-purchase.
Section 6(1} i>rovides that a seller's implied undertaking as to title (namely,
his right to sell under s 12 Sale of Goods Act {Cap 393, 1999 Rev Ed)
("SCA:') and h is right to hire out the goods under s 6(1) Hire-Purchase
Act (Cap 125, 1999 Rev Ed) ('"HPK)), cannot be excluded or restricted by
party who claims that the other party does not dea,I as consumer (s 12(3)
ucrA).
11.49
reference to :tny contract tenn. In the case of consu1ner contracts (\.,..here
the buyer is '"dealing as a consumer"), s 6(2) UCTA prohibits taie exclusion
or restriction of liability b)' the seller relating to his implied undertakings
as to confonn ity of goods ·with Lheir descript ion or sample, or their quality
or fitness for .a particular purpose (under ss 13, 14 or 15 SGA and ss 6(2)
and (3) HPA). However, such liability can be excluded or restricted in nonconsumer con tracL< subject to the lest of reasonableness (s 6(3) UCJ"A).
11.47
Where a conlract is not governed by the SCA or HPA as regards the
passing of ownership or possession of goods, s 7 UCfA states that the sa1ne
principles apply to such contracts (sec ss 7(2) and 7(3)). Tiie section further
provides that liability for breach of obligat ions arising under s 2 Supply
of Goods Act {Cap 394, 1999 Rev Ed) cannot be excluded or restricted
(s 7(3A) UCTA). However, s 7(4) UCTA provides that liability in re.specl
of the right to transfer ownership of goods or give possession or assurance
.. . there arc so1nc transaclions which arc clearly integral parts of the
businesses concerned, and these should be held to have been carried out
in the course of those businesses.; this '"ould c-over. apart fron1 n1uch
else, the instance of a o ne-off adventure in the nature of trade, '"here
the transaction itself would constitute a trade or business. TI1ere are
other transactions, ho\.\ ever, ... '"hich are at highest only incidental
to the carrying on of the relevant business: here a degree of regularity
is required before it can be said that they are an integral part or the
business carried on, and so entered into in the course of that business.
of quiet possession can be excluded or restricted subject to the test of
reasonableness.
1
UCTA and Consumer Contracts
11.48
Merely because a pany is a business does not necessarily prevent it from
"dealing as a consumer". In R & B Customs Brokers Co Ltd v United
Dominions Trust Ltd (1988), the plaintiffs were a shipping company owned
and controlled by a Mr and Mrs Bell. The company bought a second-hand
car from the defendant..< for business and persona l use. They had made
two or three similar purchases in the past. 'lhc UCTA provision on which
they sought to rely would only apply if they were dealing as consumers.
Despite the fact that the purchase was made by the company and the
car would be used partly for business. the English Court of Appeal held
tha.t the Bells were dealing as consumers. Dillon LJ made the following
helpful observations as to \Vh:H \\'Ould not constitute "dealing as consun'ler"
(at pp 330-33 1):
As noted above, the UCTA makes a distinction between two types of
contracts: consu111er contracts and non·consun-1cr contracts. A consu1ner
contract is one where one party to the contract "deals as consumer".
Under s 12( 1) UCTA a party deals as a consumer where:
I I.SO
The requirements of s 12 UCTA arc cumulat ive. ltl Koh Lin Yee v Terrestrial
Pte Ud (20 15), the court relied on the R & B Customs Brokers decision and
held that the appellants fulfilled s 12(l)(a) UCTA. as obtaining a loan was
incidental (and not integral) to carrying on their business. However, the
court held that the respondents did not satisfy s t 2(t)(b) UCTA because
there was no degree of regularity that demonstrated that they had made
o
he "neither makes the contract in the course of business nor holds
hilnself out as doing so";
o
the o ther party 1n:lkes the contract in the course of a business; and
loans in the Goursc of their business of purchasing barges and boats. The
o in the ca.<e of contract for sale of goods or hire-purchase, the goods
loa n was merely a one-off trunsaction for bot h parties. As not all the
requirements of s 12 UCTA were satisfied, the appellants were therefore not
dealing ns consluncrs.
in question "arc of a type ordinarily supplied for private use or
331
332
Principles of Singapofe Business law
Chapter 11 : Exemption Clausts
Test of Reasonableness
11.51
(e) whether the goods in q uest ion were manufactured, processed or adapted
to the special o rder of the cusco mer.
Under the UCTA, exemption cl3llses 1hal are not rendered inoper.lli\•e
must pass the test o( reasonableness. Sect ion 11(1) UCTA gives a broad
defin itio n of reasonableness. ll provides that, fo r contractual tenns, the test of
reasonableness rcqllircs lh3l "the term shall have been a fair and reasonable
one lo be incl11ded having regard 10 the circumstances which were, o r ought
reasonably to have been, known lo or in the conleJnpJat ion o( the parties
when the contract was lllade''. Section 11(5) UCTA provides 1ha1 chc burden
of proof lies on the party seeking co rely on the exempt ion cla use to show
that it is reasonable. '01is means that the relying party cannot n1erely assert
that the term is reasonable buc must provide sufficient evidence that it is
so. In this regard, the Singapore High Courc in Holla11d Lcedo11 Pre Ltd (i11
liquidario11) v C & P '/'rnnsport Pre Ltd (2013), held (al (237]-(238]} that
ii was insll ffic icnc fo r chc defendant to assert that the term was reasonable
because it '"'s widespre'1 d in che warehousing industry. without producmg
The above factors, if relevant to the case concerned, may be considered in
deciding o n the
of che exemplion clause. However, relevant
faccors o ther than those enumeraccd above can also be considered. Thus in
Smit/r v Eric Bush (1990} the English court cook accounc of the following
fac tors in deccrmining reasonableness: (I) whccher it WO<lld have been
reasonably practicable co obtain advice from a11
source having
regard co chc time and cost involved; (2) whechcr t he liability in q uestion
was fo r a ditl\cult task o r o bligation that may impose an additional burden
o n the performing party; and (3) the practical conscquencts of determining
whethe r o r not the clause is in fact reasonab1e. The quest ion in Sn1itl1's.
case was whethe r .surveyors who were hired by a purchaser of a house to
value the pro perty could reasonably exclude liabilicy for their negligence.
l h e court took into account the difficulty a purchaser faced in paying
another expert to value the house. In addition, t.he valuation
\vas
work at the lower end of a surveyor' field Qf professional expertise and did
1101 place on unreasonable burden on che Sllrveyo r. As for the prnctical
consequcncesi the su 1·veyor \Yho \V3S ios:ured would not suffer sig1,ificant
hardship by bearing the risk of potencial negligence. The increase in
Sllrvcyors' insurance premium wo<tld, 01 most, be distributed amongst house
purchasers through an increase in valuatio n fees. By contrast, a purchaser
who hod to bear the risk of the surveyor's negligence would suffer greater
hardship when left with a valueless housr. Considering all these facto rs,
the' court Jecided that it \\'a.S not reasonable for lhe surveyor to exclude
liability for negligence.
evidence to show reasonableness.
11.52
11.53
As regards exemption clauses covered by ss 6 and 7 UCTA, s J 1(2) UCTA
refers to• set of guideli nes given in the Second Schedule. Jt wo uld chus appear
that 1he1•e might be • difference between the concepcs of reasonableness
envisaged in ss 11( I) and 11(2) UCTA. However, in pract ice the courts
generally refer to the guidelines given in the Second Schedule in every case.
The Second Schedule lists the following as relevant considerations:
(a) the st rength oi che bargaining posicions o( the parties relative to each
other, tnk:ing into accounl (ain ong o the rs} any alternative n1eans for
n1ccti.ng the custo1ner's
(b) whether the Cll>tomcr received an inducement to agree to th e exemption
clause o r could have entered into a similar contract without che need for
such a
(c) whether the customer kne'" or ought 10 have kno\vn of the existence
and cxtcnl of the term , having regard co any custo m of the cradc or :my
previous 'Qt1rse of
be1wm1 the parties;
(d) where the cerrn exc.ludes or restrices any relevant liability if" contingent
condition is not fulfilled, whether it Vims reasonable at the thne of
the contract to expect thac compliance 1vi1h that contlition would br
practicable; and
333
11.54
The UCTA te.st or
ca1ne up for consideration in a nu1nber
of S ingapore cases, :lnd Ihe courts have consistently exan1ined foccor (a) lhC' bargaining positions of the part ies. In Co11s111al Singapore (Ptc) l. td v
8a11k of America National Tn1sr 6' Savings Associntio11 (1992). C-0ns1nnt sued
Rank of America for amounts paid by the bank under forged cheques. The
bank relied on an exemption clause in Its sta.nd'1 rd for m contract. Ahhough
chc: UCTA was held inapplicable on the facts, the t-ligh Court fou nd that,
wer e ic to be applicable, the dame in qllcst ion would have been reasonable.
The court noted the following facts in coming co its conclusion: ( I) both
parties "''ere conuncrcin) entities \\•ho <:nlcrcd into the contract freely:
(2) Consmal hod a choice oi banks; and (3) the clause contained a
334
Principles of Singapofe Business law
Chapter 11: Exemption Clausts
period for Consmat to challenge any alleged discrepancios, and as a business
th.,. issue before the High Court was the reasonabkness of the conclusive
evidence clauses used by banks. Mdm Jiang Ou opened an "e<ount with
EFG flank in )l111e 2008 and deposited nearly sis million. Between 1\ugus1
200& ond April 2009 without any instructions, an employee of the bank and
Mdm Jiang's relationship manager executed a series o f 160 high·risk foreign
exchange and securities transactions purportedly on her behalf. A< a result.
her account suffered a loss of about SS2.3 million. She claimed that prior
to August 2009 she did not receive an)' of the 160 tr.lnSaction confimiation
slips or bank statements except for 18 documents received from 29 July 2008
to S January 2009. The bank denied liability for the loss, arguing that Mdm
cnlily, it had the resources to verify its bank stntc1ncnts 'A'ithin this period.
11.55
In Kenwell & Co Pte l.td v So11thern Ocean Shipbuilding Co Pte Ltd (1999).
the Migh Conrt stressed that the parties arc not deemed to be of equal
bargaining power merely bee11use they arc commercial entities. Warren
Khoo J observed (at (58)) that "the mere fact that a party h:u; apparently
1
\\
illing.ly t ntcs·ed into a contract containing exdusion or li1ni1ntion tenns
docs not prevent him subseque11tly from raising questions of reasonableness
in accordance with the Act:' 1lie Kcnwc// case was followed in the High
Coul'I cases of Press Automntion 'frdmology Ptc Ltd v '/'m11s·li11k Ex/1ibitio11
Fonvortli11g Pt.e lid (2003). Kay Lim Co•1structio11 & Trndi11g Ptc Ltd v Soon
Douglas (Ptc) I.Id (2013) and Holland /,eedon Pie Ud (i11 /iquidntio11) v C &
P lrtmsport Pie Ltd (2013).
11.56
Jinng could not challenge the correctness of the bank transaction docun1ents
because of the conclusive evidence clauses in the bank's documentation.
Conclusive evidence clauses i1nposed upon the custon1ers the duty to verify
bank statements and to notify the bank if then' was any discrepancy.
If the customer failed to do so withi11 the stipulated time. he or she would
be precluded from challenging the correctness of the bank statemenL The
court held (at (107]-(1221) thut the clauses were probably meant to exclude
the bank's liability for errors caused by lack of due diligence, and were not
i111cndcd to exclude lfability caused by fraudulent or wilful mim>nduct of
its employees. ·1he bank did not expr<·ssly exclude such a risk in the clause.
Eve11 if il did so, the clause was clearly void as a mailer of public policy,
as well as unreasonable under the UCrA. Public confidence in the banking
S)'Stcm was fundamcntal to the integrity of the system. and was founded upon
rm1tual trust and a reasonable expectation of honest dealings by employees
of banks.
the risk and liability for the fraud or wilful misconduct of
c1n ployccs of banks on the consun1c.•r by war of conclusive evidence clnuses
would undermine the i11tegrity of the system.
In Koh U11 Yee v Terrnstrin/ Pte Ltd (2015), Allgo Marin Pte Ltd took
three loans from Terrest rial Pie Lid. Koh, the owner of Allgo. wns the
guarantor for these loaiis. Allgo claimed that the loans should be reduced
to take into .i.ccount a mm owed by Terrestrial to Allgo for the purchase
of n tug boat. llo\\'Cvcr, thc loan ngrec-mcnts
an cxen1pt ion clause
which stated that all payments had to be made "without set off''. The Court
of Appeal decided that this clause was reason.iblc because of sound
co1n n1ercial justifications and its con11non use in loan agrec1ncnts. 1hc
clause would a llow the lende1· to receive full payment and maintain sufficient
flo"''· At the san1e 1in1c, the clause would not prevent the borrO\\'er
frorn bringing a separate dailn ag3inst the k•nder for any breaches of thr
loan agreemc•U. In addition. the Court of Appeal considered the relali"e
bargaining
of the parties, and held (nl f5S)- IS7]) that the relevant
factors relating to this included (I) whether the party challenging the
exemption clause was experienced in comme1·cial mailers. (2) "'hethcr he
had the opportunity to negotiate the deletion or amendment of the clause,
and (3) whether he had legal advice. Applying these principles. the court
decided (at 1721) that both parties were commercial parties with equal
barg'1ining posit ions. They had specific;ill)• negotiated the term• of the loan
agrrrmenl for thtt circu1nstanccs, and \'\1ould know or ought reasonably to
have known of the effects of the clause.
11.57
In the appropriate case, public policy mny be rclei•trnt in deciding the
1·easonablcness of an exemption clause. In Jiang Ou v EFG Bn111c AG (201 1)
335
11.58
's
It
C\'idmt from the Singapore cases that reasonableness is a very factual
enquiry which involves a consideration of all relevant fncto1·s and not merely
those in the Second Schedule of the UCl'A. This
has also been
adopted b)' the English courts. For example, in George Mitchell (Clrcster/1111/)
llri 11 Fl1111cy Lock Seeds Lt1I ( 1983). a
contracted to sell winter cabbage
seeds but deli\'ered autumn seeds of inferror quality. The House of Lords held
that the cxe1nption clau8e wa.<; unreason.tble because, an1ong o ther things.
the buyer could not dlsco"cr lhe breach until the plant> grew "'hereas the
seller '"ns at all 1hncs in a posi1ion '"here it should have kno'"n '"'hether 1he
\vrons seed Wl\S supplkd.
336
Principles of Singapofe Business law
Chapter 11 : Exemption Clausts
11.59
In Moto11rs Uri v E11robnll (West Kent) Ud (2003) the defendant who provided
telephone services to the plaintilf, Motours {a travel agency). sought 10
11.62
ex:clude all liability for all consequemial loss howsoever arising. Although it
(:1) do or say somt thing. or omit !O do or say at\ylhing. if. :IS a result,
was a co1nn1erci:il bargain ben+.·cen bus:inessn'len. the court found the tenn
10 be unreasonable. ·nicy considered t he following fac tors 10 bo rclc\•ant:
( t) the exclusion for negligence could not have been will1in Motour's
conten1plation; (2) the exdusion clauses '"ere co1nn1on in the industry
so that Mote>ur had no choice: (3) the term was not negotiated; and
(4) Motou rs was not in a position to negotiate while Euroball could adopt a
"t3ke it or leave if'' attitude.
l 1.60
In Rcgt1s (UK) Lid " Bpcot Sol11tio11s lrd (2008), Regus hired serviced office
accommodation to EpcoL Epcot .<ought substantial damages for loss of
business due lo faulty air-conditioning. A standard tenn in 11.he contract
excluded any liability for loss of business, profits, anticipated savings. third
party claims or any consequent ial loss, or loss of or damage to data. The
English Cour t of Appeal fo und the douse to be reasonable for t11<· following
reasons: (l) Epcot could still sue for defective ai1"conditioning; (2) the
exclusion did :not cover fraud, or wilful. reckless or malicious
which
would be unreasonable; (3) Rcgus reasonably limited its liabilit)' lo thr
higher of 125 per cent or 650.000: (4) Regus advised its customer. to p1·otect
themselves by insurance for business losses; and (S) there was no inequalit)'
of bargaining
consumer might reasonably be deceived o r misled:
(b) make a false claim:
(c) knowing!)' rake advantage of a consumer. where the consumer is not
in a position to protect his o'vn in1erests or is not reasonably able to
u nderstand the characl<r. nature. language or effect of the transaction: or
{d) do certain other ac!S specified in the Second Scheduk• (such as mis-
representing the price of a product. the sponsorship. benefits, standard
or quality t hereof).
l 1.63
'lh.- consumer protectio n given by the Act is in addition LO any right or
remedy that the con;umer may have apart from the Act (s 15(1) CPFTA).
Furt her, it is not possible to contract out of the provision< of lhe Act
(s I 3 CPFTA). ·1his would mean that any exemption clause would be
invalid if and to the extent that it is i11consistc11t wilh the provisions of
the Act.
l 1.65
The Acl was amended in March 201 2 introducing what was termed in the
EXCEPTION CLAUSES ANO CONSUMER PROTECTION L EGISLATION
the supply of goods or services by a supplier lo n consumer as
purchase,
gif't,
•1 result
of a
or other arrangcn1ent: or an ag-ree1nent
a supplier or co11sun1er Cor thal purpose (but excluding Lhe Lransac-tions
specified in 1h.e First Schedule) {s 2(1) CPFTA).
337
or a supplier is exempted l'rom
11.64
pO\V('r.
Singapore has enacted the Consumer Protection (!'air Trading) Act {Cap 52A.
2009 Rev Ed) (''CPFTA") which came into force (ln I March 2004. 'Die Act
defines a "consu1ner·· as an individual who does not act exclusively in the
course of o business in t he following situations: (I) where he rcce-i\'Cs or has a
or scn•iccs from a supplier: or (2) has a leg.al obligation
right lo receive
to
the supplier for goods or services. A "consumer t ransac:tion'' n1cans
A consumer '"ho has entered into a consumer tr:ansaction involving an
unfair practice is entitled to go to court against the supplier {s 6( I ) CPFTA).
'I he Act also gives a consumer the right to cancel certain contracts within a
cancellation period (s 11(I) CPFTA). However. a person who, in the ordinar)'
cQurse of his business "prints, publishes, distribute.<, broadcasts or telecasts
an advertisement in good foith" on behalf
liability (s 16 CPFTA).
IN SINGAPORE
I l.61
Section 4 CPFTA refers to ''unfair practices". 11 is a n unfair practice for a
supplier to
rncdin ns "Lenton L:nv"', which seeks to give consl11ncrs added protect ion
agt>inst defective goods that do nol conform LO the contract of .ale of goods
(in.elud ing a contract for t he 1nu1sfer o f goods and a hire-purchase agreement)
at t he time of delivery. 'll1e low will apply if three criteria have been met:
( I} the transferee deals as a consumer: (2) the goods do not conform to
the contract: and (3) Lhc contract was made on or after l September 2012.
Where a consumer is able to rely o n this law he mny hO\<e the right to
require the seller to repair or rrplacc the goods ut seller's discretion. \Vhcre
it is not feasible lo do so. the consumer will be entitled LO require the seller
338
Chapter t1 : Exemption Claum
to reduce the a 1n ount to be paid by an appropriate an'lount or to rescind the
contract. fo r fur ther details of the lemon law, see Chapter 22, para 22.13 1
onwards.
11.66
Principles of Singapotc Business Law
provide that certain exe1nption clauses are invalid, it d<>es penn it an aggrieved
consurncr to sue a supplier and be awarded restitution of the 1noncy he has
paid or damages for loss he has suffered as a result of the supplier's unfair
In 20 16, the Act was amended (sec Consumer Protection {F.air Trading)
Amend ment Act 2016 (Act 25 of 20 16)) to give the Standards, Productivity
and Innovation Board ne"' inve:aigatory po\.\1ers to deal ,,dth unfair trade
practices and to rnonitor cornplianc.e. Since April 2018. th e consu1ncr
pro tection role has been taken over by the Competition and Consumer
Comm ission of Singapore (see Part 10 s 69(b), Enterprise Sing.1pore Board
Act 2018 (No 10 of 20 18)). 'Ihe 20 16 amendments also gave the courts
power to order injunctions against the errant trader's business a11d complicit
individuals.
tr:iding practices. This legislation thus seeks to achieve fairness beh 11een
the par ties, the same objective that has guided the d evelopment of the law
relating to exemption clauses.
C ONCLU SION
11.67
We noted at the beginning of this chapter that while it is essentfal to ensure
freedom of contract o n o ne hand, it is equally important o n t he other to
control its excesses so that they do not lead to unfairness. 1l1e courts played
an in1portant part ;i,s to the latter by assisting the \.\1eaker party through
various devices. These included first, the requirement fo r the stronger
pariy to prov·e incorporation of the exemption clauses into the contract.
An exen1ptio1l clause could be incorporated into the contract by signature.
notice or by a prior course of dealing. Second, the courts would then
decide o n its validity by employing various rules of construction such as
the anrtra profere,Jlctn rule, and the Canada Stearns/rip guideli nes in cases
of negligence liability. However, over lime the courts' interventio n proved to
be insufficient and the legislature had to step in. 1l1e legislature in the UK
intervened by passing the Unfair Contract Tenns Act 1977 'vhich is nov.1
part of the Singllpo re law as Cap 396, 1994 Rev Ed.
11.68
Another develop1nent to be noted in
context is the gro\\1th o f consluner
pro tection legislation in tandem with the law on exempt ion clauses.
Singapore enacted the Consumer Protection (Fair Trading) Act (Cap 52J\,
2009 Rev Ed) in 2004 which has subsequent ly been amended several times
to strengthen consumer protectio n. The enactment of this legislat ion regulating foir tradin g in Singapore has provided an addit ional avenue for legal
redrci;.' fo r consumers. Alt hough the Act, unlike UCI"A, does not specifically
339
340
Principles of Singapofe Business law
Chapter 12
Mistake
12.1-12.2
12.3
12.4- 12.5
12.6
12.7
12.8
12.9
12. 10
12.11 - 12. 12
12. 13
12.14-12.21
12.22
12.23-12.26
12.27- 12.29
12.30
12.31
12.32-12.33
12.34
12.35- 12.36
12.37
12.38
Introduction
Mistaken Identity
( I) Introduction
12.39-12.41
12.42-ll.47
12.48- 12.52
(3) Non face-10-face transactions
12.53- 12.55
No11 & t Fact11111 (This is Not My Deed)
(2) Face-to-face transae1ions
Categories of Mistake
12.56
Rectification
Legal Consequences of Mistake
Distinct Consequences at Conunon La'" and in Equity
on 111ird Party Rights
( I) Where contract is void under common law
(2) Where contract is voidable in equity
12.57
Conclusion: Is There a Doctrine of Mistake to Begin WitM
Common Mistake
Introduction
Common Mistake at Common Law
(I) English position
(;i) Non-existence of subject matter (res extincta)
(b) Subject matter already belongs 10 the buyer (res s1111)
(c) A broader doctrine of common mistake
(2) Local position
C-0mmon Mistake in Equil y
(I) English position
(2) Local position
Mutual Mistake
Unila·t eral Mistake
Introduction
Mi.stal-e- as to a Tenn of Cont met
( I) Unilatcrnl mistake at common law
(<1) Mistake must relale to o term
(b) Knowledge of lhe non-mistaken party
(c) Conscquc:nccs of an opcralivc n1btakr
(2) Unihiternl misrnke in cqui1y
342
Pri,,c1plts of Smg;iport Busintss Law
Chapter 12. Mistake
INTRODUCTION
12. 1
12.2
In Chopters 1 and 8, we learnt that a contract I• formed when one party's
offer has been unconditionally accepttd by anothtr, and this agreement
Is supported by consideration as well as the mtentoon to create legal
relatoons. Whnt if the panics' consent was in fact bastd on mistaken facts
o r o»umpt ion s! In such a situation, the contract may be l'itrated, that is.
rendered lnctrcctivr. A mistake that has this effect is refcl'l'e d to os a '\•itiating
factor''. It Is im portont to note, however, that il is not every m istake, but
o nly scriOU> m istakes, which htwe the effect of vilintlng n c()ntroct. 1 he
mt1in objective of this chapter is to identify the types of mi>takes which arc
sullicicntly "•erious" fo r this purpose.
An imp<>rtant preliminary p<>int to note 1s that thos chapter deals with
situations where co11tractmg parties are affccttd by some mistaken bclicf or
assumption 111 tl1e poi11t of c11teri11g i11to tloe co11tm<1. Mbtakcs of this nature
should thcrefore be contrasted with and distingui;hed from:
o
n11srtprtsc11tnt1on - this
situations 'vherc one party's nlistaken
bditf;, on foct i11d11ud by representations made by another party to the
contrnct (oee Chapter 13);
o frustr11tio11 - this occurs where the par·tic>' belief o r assumption turns
out to be wrong as a result of an event that occur> 1iftcr the contract is
for med (sec Chapter 17); and
o
unjust cnrid1n1ct1t - th is n-1ay include
where 1>arties 1ransact
with each other on the basis of a mistaken belief or assumption, but
>uch a transaction docs not in fact amount to a contract. For example.
A may makt a payment to 8 in the nmtaken bchcf that A 1s indebted
to 8. In •uch a case, /is pa)'mcnt is not contr.ctual on nature, and
B's liabalit)' to repay A ariscs under the law of Ull)U>I enrichment, not
contract
12.J
MistllkCs which may affect the operation of contracts ure broadly categorised
com111011 mutnkt - where ooth partits are in agreemtnt but make the
samt mistake as to the subject moncr of the contract;
o
mutual mistnkt - where both parties are mistaken on dijftrtnt mollers;
o
unilntcral nristakc where only one party 1s tnistakcn as 10 a tenn of 1he
contract or the identity of the counterp•rty and the other pany boows of
o
110 11
the rnistnket
est fnc/ 11m - chis is ll more specific cacegor y of mi>take which
applies only to document> m htakenly signed.
LECAL CONSEQUENCES OF MI STAKE
Distinct Consequences at Common Law and in Equity
12.4
As explained in Chapttr 3. paras 3.30- 3.31, judge-made rules typicall)•
originattd either from common bw or chancery (equity) courts. In this
chapter, it is imp<>rtant to have regard to this historical distinction because
the effect which a mistake has on a contraCI will depend on whether on• "
applying a common law or :1n cquotablc rule.
12.S
At con11no11 Jaw, an operative 1nish1kc renders the contract void 11b 1nitio
(ie, void from the beginning). In 01 her words, the contract ceases to have
effect in the most comple1c and absolute sense. The result is that the co111ract
is deemed never co have cxis1cd. In contrasc. a mistake that i> operative in
•q" ily o nly rcndrrs a contract voidable. 1 his means chat the concract is not
void, but may be >rt aside (rescinded) by the mistaken party. ·1hc partie>'
contractual right> and obligations thtrefore remain intact unlll and unlc.u
the mistaken party chooses to set the contract aside.
Effects on Third Party Rights
12.6
(ATECORIES OF MISTAKE
0
The distinction between the effect< ()f a n1is1akc at common law and In
equity is mosc critical when third pany rights are invol\'ed. To illustra1c thos,
consider an example where n >Cllcr S sells a car 10 a buyer B. B >ubsequcntly
sells che same car to a third pan y T P (sec Figure 12. 1).
as follows:
343
)44
Pri,,c1plts of Smg;iport Busintss Law
Chapter 12. Mistake
-
Mlalekt et Common Law
S --- -
a
B
mistake
S rescinds, there art shll righu thot could be passed from B to TP undrr thc
sccond contract. figure 12.1 sumrnariscs the distinct results that ansc under
TP
TP does not acquire
any lnte.rest In vehicle
since 8 has no tntortll
to pass to TP
contract t1 'VOid
B itequhre1 no lntere5l
In vehlcle
common law and
COMMON M ISTAKE
Introduction
12.9
Mlateke In Equity
s
utls
•
sells
B
-- •
TP
n mistake
TPaoquorn81
. -oct Is w.clal>¥
.. 8 KqUtfff W'llerfft .,.. vehicle If
S hu nol ,.,..,.,.,.., conlraCI
m equal)'•
lnlMHlln-
A con1n1on 1nistake ari ses when, although both contract ing
have
reached agreement on the essential terms of lhe co ntract, they arc in fac t
mistaken as to the basis upon which t hey contracted. In o ther words, the
parties' i>elief or assumption in respect of a spedfic contractual subject
matter is wrong. While thi> may appear lo be a simple concept, the law has
in fact experienced great difficulucs 111 defining the conditions under whach
a common mistakt u said to havt occurrrd. This difficulty as compoundtd
by the fact that there appcaN to be difftrtnt sets of criteria for dctcrmimng
when such a mastake anscs at common law and in equity.
Figure 12.1 Mistake at common law•• contrasted with mlnake In equity
Common Mistake at Common Law
(1) Where contract Is void under common law
12.7
If the cont1.1C'l between S and B is void as a resuh of u mistake operative
at cn1nn1on ln.w, no rights or obligations can pass under iL lhrus. nlthough
B ha> attempt cd 10 transfer the vehicle lo
such a transfer is ineffective
no right has been transferred to B in the fir>t ins1ance. ln such
a c;,isr, S. t he o riginal owner, is entitled to recover the vehicle even though
TP may have purch..,.cd it in complctr ignor.nce of the circumstances
under which the mistake arose in the first place.
(2) Where contract ls voidable in equity
12.8
Where. however. the contract is only "oidablc in cquil)'. the con.equences
:u·e quite different. Such a contract rs valid 1111111 tire srlltr 111d1ratts liis or
lrcr i11tc1111011 to srt it aside. 1lms, if R sells 1hc vehicle 10 TP before S has
lhc o ppor1uni1y to rcscind the firsl contrncl with B, then TI' would ha\·e
acquired Ll's raghts in 1he vehicle, and it is then 100 late fo r S to recover the
same from T I>. Since 1he cont ract belwcen S nnd B co111ln11es in force u nlit
(1) English position
12.10
(t
is convenient lO begin wilh l\\'O relat ively uncontroversial inslnnCtS o(
coJ'n1non 1nistnkes thal arc opcnHive nt conunon """'·
(a) Non-txisttnct of subject matttr (m txtfncta)
12. 11
A contract is void if the putie> ore unaware that th e contractual subject
matter is non-existent or has perished at the time of the contract. In
Cowuritr v Hastie (1856). the parhcs had contracted 10 sell • cargo of corn
which they belic"ed was bcong Jh1ppcd from S.ilonica to England. Unknown
to both parties, however. the cargo had in fact dcteriorattd and had b«n
sold off by the master of tht <hip prior to the date of the contract. The
court found that the contract was entered inlo for the sole of cxistmg
goods. Since th e goods were 1101 in fact available for sale at the tune of
1he con1r3ct, the seller could 001 cloim og3in>1 1he buyer for th e pnce
of 1he corgo. Alt hough the term "mi>1oke' was not uscd in the court$
reasoning. this
Is co1nn1only ciled t's 3n instance \\!here a contrQCl
is void on 1he grou nd of the pnrtlcs' shored an d m istaken assumption as
to t hc exislencc of lhe subject mailer.
345
346
Principles of Singapoft Business law
Chapter 12: Mistak•
12.1 2
A contract m"y not, however, be invalidated on the ground of mistake if,
011 its true
12.1 5
one of thr parties hns agreed to bear 1hc risk of
the non-cx:istence of the subje" matter. Tii is occurred in the Australian
decision McRne v Co111mo111veflltlr Disposal.< Co111missio11 ( 19:5 1). In this
case, the Co1n n1ission invited tenders for a \'\'rrckcd tanker thnt was said
to contain oil 111e plaintiffs' tender was accepted and they thereupon
embarked o n a costly salv.ge expedition, only to discover that the tanker
did not exist a l all! Jn its defence against the plaintiffs' claim for breach of
contract, the Commission argued. relying on C-011111rlcr 11 Hastie, that the
contract ·wos void for con1111on n1istake. ·n1is argun1ent \\':lS rejected by the
court. ll held that on a true construction of the contract, the Con11nission
had assumed the r isk 1·eln1ing 10 the existence of the tank.er and was
therefore in l>reach of its contractual promise when the tanke1· was found
not to have existed. l he plaintiffs thus succccJ cd in thciT claim for
d::unagcs, '"hich included the "'asted expenses incurred in t..-on11ection \Vith
the expedition .
vnlJdity of the conrract if it "makes the thing wilho111 the qualily essentially
different from the thing it was believed to be''. Sim;)arly, l..ord Thankerton
observed (al p 235) that the m istake must "relate to something which both
!parties! must necessarily have accepted in their minds as an essenrial and
in1-egral ele1nent of the subject-n1atter·: In that case. the dain1ant cornpany
had agreed to compensate the defendan t employees for prematurely
1cm1inating their service cont racts. Subsequently, the company discovered
that it could in fact have tern1i nated the defendants' service contracts
w·ithoul co1npensation on account of the defendants• prior breaches of
d u1ies. ·nw company argued that had it kno,,.n of these earlier breaches,
it would have dismissed the defendants without compensation. The
defendants, o n the other hand, had not acted dish onestly because it was
found Lhat they had forgotte n aboul their earlier breaches at the time of
entering into the con1pens:Hion agreernents. The con1pensat.ion agreen1ents
\\ICrc thus made under the con11non 1nislakcn ass-u111ption that the service
contracts could only be terminated with compensati<ln. Although the court
conceded thM a radical and essential
could render a cont ract void.
it hdd that this was nol such a case. lhc n1istakc V\1as not so SC.Tious ns
to render the conlrncts essentially ditferenl from what the part ies h'1d
contemplated. O ne explanation of the restrictive approach taken in this case
is •he courl S; concern with protecting conlractru'I ccrtninty - so long a.s
parties have ag1·eed to the essent ial terms of the coniract. the parties should
(as for as possible) be held to their bargain and look to the conlr:ict for
prolection against unknown risks.
(b) Subject matter o/r;eody belongs to the buyer (res suo)
12. 13
TI1e second instance ill which a contract would clearly be rendered \'Oid
for common mistake is where one party agrees to purchase a properiy
o r an inte rest frorn another \\•hich, unknown to both of th.C'1n,
belonged to the bu)•er. In such a case, the co111rac1 is null and '' Oid from its
inception.
1
(c) A broader doctrine of common mistake
12. 14
What would the posit.ion be, if the m istake doc. not fall within either of the
two specific instances just described? For example. if a seller sells a painting
to a purchase,- which they bo th honestly believe 10 be the authentic work
of a fa mous artist. is the contract void for common mistake if the painting
is subsequently discovered to be a counterfeit? In such a case, the subject
1nalter of the conlrnc:t (ie, Lhe painting) does in fact C'xist1 and hence the
contract is not void on the narrow ground of re5 cxtl11cta (see para 12.1 1).
Nevertheless, can it not be argued that the counterfeit is so radically different
fron1 whal the parties had in rnind that the contract oughl lo be void
0 11 the ground of mistake? Despite ;ome uncerlliinty in the paM, it h now
clear th:ll such an argument may be raised - the doctrine of common
1nislake is no longer confined to the specific instances involving res cxtincfn
and res Sr4fl.
347
In the le>ding dccisicm of Bell v Lever Brothers, Ud ( 1932), Lord Atkin .aid
(al p 2 18} thnt a mistake a.< to the quality of a thing will o nly a/feet thr
12. 16
The existence of this broader doctrine of con1n1011 n1istake at co1nn1on
lnw was subsequently affirmed in Associnti"ll /11pa11esc Ba11k (1111mwlio1wl)
ltri 11 CrCtfil d11 Nord SA (1989). In this case, n fraudster named Rennell
purportedly entered into a sale and leaseback arrangement with Associated
Japanese Bonk (lnlcrnatiom1l} Ltd, in rcsp<'<I of four specific mnchincs. '!his
n1·,._111gcme111 comprised two contracts: { 1) the sale of 1he machines by llenncu
to the claimant, nnd (2) the claimnnts lease of the $ame machines b"k lo
Bennett ut a quurlcrly rcntn1. 'llu.• defendants. another financial institution.
agreed 10 guarantee Bcnneu·s o bligalions
the lease for a
Unknown
to J1otlt the cJ3in1nnts :.tnd the defendants. however. the 1nachines in quesi ion
never existed. Bennett, \\.'hose fraud was exposed o nly after having been paid
348
Principles of Singapore Business law
Chapter 12: Mistak•
12. 17
a sum in
of £J million by the claimants, was arrested and adjudged
bankrupt soon afler.
clnilnants thus lurned to reco\'tr their loss froJn
the defendant guarantor. On these fa"s, Steyn J (as he 1he n was) was
prepared to hold the guarantee void on the ground of common mistake.
As the pan ics hnd contemplated a guarantee of obligations und er a lease of
four specific machines, the non-existence of the machines rendered 1he actual
guarantee "essentially different>) fro1n I hat \<Jhich 1-he parties h:id in rnind.
('I his holding is, however, strictly obitcr because Stcyn J had also found that
there was either m1 express or n11 implicrl co11rlirio11 p1·ccedcnr in the guaramee
that the n1ac.hines concerned existed and, as the n1achines did no1 in fact
exist, the claimants' action failed.)
as they existed ot the time the contract was made. Fourt h!)'. and this
is the point established by Bell v Lever Brothers, Ltd .. .. the mistake
must render the subject maucr of the conlracl essentially and rndicall)'
Steyn J's judgment in the Associated Jnpmresc Bn11k case is significant for
defi ning the scope of the ,Joctrilll' of common mistoke. Steyn I highlighted
the importanee of drawing a clear distinction between the doctrine of
mistake and that of /Jrcnclt. Before invoking the doctrine of common mistake,
the court ''•ill firsl have to interprcl or cons/rue lhc contract to determine if
one of the contracting part ies has assumed the risk of the mistake. If so,
and the miMake indeed occurs, then the 11arty who
assumed the risk of
the n1istnkc is in bn·adr of contract. According!)'· in such a situation. there
is 110 room for the doctrine of mistake to apply at all. 111is occurred in
McRa• v Co11 1111011wealth Disposals Commission (discussed in para 12.12),
The above observations make it clear that the doctrine or common mistake
has an extremely 11nrrow scope. If the law's primary task is to uphold
rather than destroy contracts, it would follow that the doctrine of common
mistake, which has the effect of destroying contracts, has 10 operate within
narrow boundaries. Indeed, this rest rictive approach is further amplified
by Steyn )'s second proposition, which draws an anology between the
doctrine of fnllilrn1ion and that of mistake. Both doctrines apply only in
very exceptional situations involving unforeseeable risks (on the difference
\\•here the Conun ission \Vas found to have assumed the risk relating to
the existence of the tanker, and was therefore liable for breach of contract
when it transpired that the tanker did not 111 fact exist. If, however, the
contract is silent on where- the risk of the n1istttke lies. then it is appropriate
to conside1· the application of the doctrine of mistake.
12. 18
'lhe learned judge then laid down (•l p 268) five important propositions
applict1ble to t he doctrine of common mistake:
111c 1it·s1 imperative must be that the Jaw ought to uphold rathe1· than
destroy apparent contracts. Secondly, the common law rules as to a
mistake re-garding the quality of the subject matter, like the common law
rules rcga.rding commercial frus1rntion, arc designed 10 rnpc with 1he
impact of unexpected and whol ly exceptional circumstances on apparent
contracts. 1hirdly, such 11 n1istake in order lo ou ract legal consequences
must substantially be sha1·ed by both parties and must re late to facts
349
different from the subject matter which the parties believed to exisL
Fiitl1ly. there is a requirement which was not specifically discussed in
Bell v Lever Brothers. [,/d.... In my judgment a party cannot be allowed
to rely on a con1n1on n1istake \\l'hcre lhe n1istake consists of a belief
which is entertained by him without any reaso11able grounds for such
[aJ belief ... That is not because principles such a$ estoppel or negligence
require it, but simply because policy and good sense dictate that the
positive rules regarding common mistake should be so qualified.
between n1 istakc and frustration, see partt 12.2).
12 .1 9
In Englrind, Lhe already restrictive appro:ic.h to conunon niistake :H co1nn1on
law has been further narrowed by the English COJUl'l of Appeal in Gm1t
Jlcacc Sltippi11g Lid v Tsavliris S11/11ngt Ltd (2003). Jn this case, the court
hel d that a common mistoke arises only if the par1ies had (unknowingly)
agreed lo something which is impossible to perform. 'Jhe application of this
test may be illustrnted by the decision in Great f'e<1cc Sltlppi11g itseU: 111e
defendants in this case had contrncled to hire the claimants' vessel (the
Great f'et1ce) ior the purposes of salvaging anolher vessel (the Cnpe
Providence), whicl1 had suffered serious structural damage al sea. Al the
time of the contract, both the ch1imants nnd the defendants honestly but
mistakenly believed that the two vessels were onlr 35 miles apart At1er
the condusiot1 of the conlroct of hire, however, the parties discovered that
1he 1wo vessels were in fuel 410 miles npart. On
1l1e crmr, 1hc
dcfend(mts did not immediately terminate the contrnct of hire, but only did
so after it had successfully obtained help from another vessel that was in
closer proximity.
350
Chapter 12;
12.20
The court declined to 1m'alida1e 1he con1ract on the ground of common
mi<l•ke. II was cle>r from the e"idence th•I the nusi.ke did no1 render
by the d1Ctn of Denning LJ (.. he lhen was) m the English Court of
decision of Sollt v Buultcr ( 1950) (al pp 692- 693):
1he coniract 11nposs1blc of performance. Despite 1he grea1er distance, the
The court. it was said. had power 10 se1 aside 1he contract v.henever
it was of opinion 1hat 11 w;is unconscientious for thr other party
to avail him.elf of the legal advantage 1vhich he had obtained ...
A con1rac1 is also liable to be ><I osidc if 1hc- parties were under n
counno11 n1lsnpprd1c11s;o11 either as to facts or as to their rcspccti\'c
righ1s, provided tlwt the 111isllpprdrn11sio11 wns f 1111dnmentn/ n11tl that tl1c
pnrty sceki11g to set it t1sidc 1wu 11ot /1i111sclf al fmdt.
Grrnt Ptncc could slill have arrh-ed in time 10 provide v•luable service
to 1he Cnpe Providmct. The fact that 1he defendnnu did not cancel the
con1rac1 of hire until they were certain 1hni 1hcy could obuun •hernan"e
scrvic<'S w,1s evidence of their belief tho1 the Grear Pence cou ld still ha"e
served lhe pllrposc fol' which 11 was hired. 'l hc dd(•11<lanl> were Lhus
liable ICI P•)' Lo lhc claimants 1he canccllalion fee stipul:11cd by the contract.
t2.21
In realll)'. very few mistakes (except in the m exti11flfl and res sun cases)
would render a conlraCI impossible 10 perform. It ma)' be that, in the
extreme, a stricl insistence on 1he cmerion of impo.-1b11ity could ha,·e
1he praClkal dlecl of extmguishing 1he common law doctrine of nus1ake
ahogether.
(emphasis adJcd J
12.24
A
o
(2) local position
12.22
The docmne of common mis1ake apphe< In Singapore as well (see
tlo
I.cc Co11struc1ion Pte Ltd v Nin11 Cli11n11 Co11str11ct1on Pte Ltd
(2001) llll<I
1,,,; Keen v Allgret•11 Properties Lttl (2009)). Funhermorc.
Ihe Crrc11 Pct1cc SliiN1i11g case has been d ied by the lligh Court wi1h
approval on ,11 least two occasions (sec Wo11,11 /,11i Kcc11 v Al/green Properties
Ltd (2009) a11J /\'orwcst l-/o/di11gs Pie Ltd v Ncwpo11 M111ing Ltd (2010)).
Ho,vcvtr. 111 neither
did the cou rt have to co1u.ider ,,1hether the
ollegcd tnh.take \Yas sufficiently serious to v111a1e the conlracl. Thus, it
is <1111 uncleor 1f the stricter requiremen1 laid down In the Gr<nt Pcnu
Sl11pp111g ,._.
tha1 a common m1'takr mar only avoid a contracl
1f 11
1he performance of 1he con1r.c1 1mpo1J1blt
1s pari of
Singapore law.
Common M istake In Equity
(1) English position
12.23
Prior IO 1hc Gren/ Pence
case. II was ijCncrnlly accepted tha1
there cxlsied " doctrine of common mlsiokc In equity lhM wa• e<1ablished
351
common
mistakt in rqully
1s
unlike that al common la''' in thrte
\\'3)'S:
As explained m puas 12.4 12.8, an operative mistake renders a con1r.ci
completely \'01d 21 common law. bul an equitable m1s1ake only renders
11 voidable. This d1s11ncuon becomes crillcal when 11 1s necesur1• 10
determine 1he effecl of a m1s1ake on third party rights.
o Despite substantial uncertainly as lo what degree of misapprchcnston
would amoun1 to • "fondamenlar' mistake in equity, the cases appear to
suggest that it
refot1v1.·lr easier to establish nn openu ive nlislakc in
equity than al common law (sec, eg, the well-known English preceJcnl.<
of Grist v llnilcy ( 1%7); M11gre v Pr1111i11c Ins "rm1ce Co Url ( 1969):
lnurence v /,rxro11rt llolrli11gs Ud ( 1978) and che Associntcd /npn1ll'.!r
8n11k case i1self).
o
FinaUy, a court hos grcaler fkllib1li1y 10 gronl rcmcdic> if common
mio1ake is establhhed in equity m•lcad of al common law. In the case of
a common m1s1ake 1n equuy, a courl has the flexibility of selling ..side
the contract on such cond111ons "' the court may consider appropri.ie:
for example, a cond1hon requiring one party to gh-c tht other party 1he
chance 10 contr>CI on d1fTeren1 ierms.
As a broader and more llex1ble Jpproach. the role of 1he equitable doclnn<
is to s11pplemer11 the docirinc of mi;t,1kc al common law. In praclice. wh,11
this means is that tt pmy who ullcHC> 1tn11 n contrm has been vitiated by a
common mistake has two bites of lhc cherry. He may fir>t plead th31 the
contracl is avoided by 1hc ml.lake at common luw. If this argumcnl s11ccccds.
tJ1ere is ohviously no need 10 seek 1hc help of equily. Howe\•er. if the
352
Principles of Singapofe Business law
Chapter 12: Mistak•
common 1nistake is established, but is not sufficicntlr serious to avoid
the contract al conunon
then the party rnay atten1pt a second bite of
and the equi1able rules, the court did not think that such difficulties alone
justified the abolition of 1he equitable jurisdiction. lne court recognised that
1he cherry by pleading the 5a111e mistake in equil)•. 111is was essenrially the
a dear and s1ric1common law rule, which allow5 the avoidance of
for the most serious mistakes, has the advantage of promoting certainty
approach o( E11glish law until the English Court of Appeal decision in G1·enr
Pence Sllippi11g.
12.25
of 1he law. However, the virtue of certainty has to be balanced against the
imp ortance of achieving justice. A broader and more nexible doctrine In
equity is useful, particularly in cases whel'e 1he court is asked to determine
the rights of rlrird parties aifee1cd by an alleged mistake, in ensuring 1ha1
a fair outcome is obtained. As the scope of the common law doctrine is
In Gren/ Peace Sllippi11g, the English Court of Appeal drasticall1• altered this
state of affairs bi• holding 1hat Lhc equitnble doctrine of common mistake did
not ex"ist at all. 'The courl arrived 3l this conclusion for two reason$. first.
ii considered that the equitable jurisdiction laid down in Solle v 811tc/1cr
notoriously narrow. having only a single doctrine at conunon law· n1ay
1ncan that a conlract \voukl rarely. if ever, be avoided on the ground of
co1nmon 1nislake. In 1nost cases, that would advantage the third party (see
Figure 12.1 ). Bui thal is b)' no means always a fair result. A supplementary
and alternativt> ren1edy in equity 1nay therefore be essential in providing tJ1e
court with $Ome measure of flexibility lo grant relief where required by the
founded on judicial precedents. Second, and inorc irnporlanlly. the
equitable doctrine \\•as fla\i\ ed because it c.ould not satisfactorily define a
''funda1nental'· 1nistake in n ,..,-ay that is clearly dist inct fro1n the operative
co1nn1on la'" n'listake (it>, ont> that rnakes the contract ··essentially and
\Vas not
1
radically diffeO'ent" from that which 1he part ies had in mind). The court
reasoned thal if both the common law and the equitable doctrines may
be invoked by the same type of mis1ake, then the more generous and
flexible equitable doctrine devised by Solle 11 811tcher (see para 12.23) would
merely be an attemp1 10 get arou nd the strict common law posit ion In
Bell v Lever Brotlrers, Ltd (see para 12.15) and is therefore i11romiste111 with
the latter decision.
12.26
dic 1ates of justice.
12.28
AILhough Lhc Court of Appeal was only concerned with 1111ilnternl mistakes in
th.. Digilm1d111all case (<ee paras 12.35- 12.37) nnd hence its commenl< may
not directly :ipp1y lo con1mon 1nislakes. nevertheless hs rcnsorrs for departing
fro m the English position should be equally pertinent in 1he contex1 of
common rmsl;tkes. Surel1• the concern wilh achieving a balance between 1he
competing interests of certainty •nd justice is just as significan1 whether the
mistake is unilateral in nawre or is shared by the coll\ract ing parties. Indeed.
following Digiland11111//, the Singapore Court of Appeal in Olivine Capital
Ptc llrl v Chia Chiu Ya11 (20 14) cited Digilmrdmal/ (at (691) with approval as
thC' leading case establishing the existence of a doctrine of common mistake
in equity.
12.29
Given that the equitable doctrine of common mistake does exist in
Sh\gnporc. ho1v is the scope of this doctrine to be defined! A handful of
older ct1ses (see Als11goff v Robin ( 1965) and Rollin v Golr 80011 Choo ( 1965))
suggest thnl the doctrine only applies to cases involving a total failure of
comillcmlio11. Such a requircmcnl would. however, render 1he doc1rinc
As n result, the present position In t nglish la1v is Lhal 1here is no longer
nny docl rinc of con1n1on 1nistake in equity. Nol surprisingly. the radical
>pproach taken in Grcnr Pence $/ripping is highly controversial (see, cg, the
criticism in A Phang, "Controversy in Common Mistake" (2003) 77ie
Cc11111cym1ccr mrd Property Lawyer 247 and A Chandler, I Devenney and
I Poole. "Cqmmon Mistake: lneorctical Justificat ion and Remedial
lnOexibility" (2004) /01mwl of R11si11ess Law 34), and there are indications
that ii does not represent the law in Singapore (see para JZ.27).
(2) Local position
12.27
In Chwee Ki11 Keong v Digila11d11rnl/.rn111 Pie Ud (2005). the Singapore
Court of
Court of Appeal disagreed with the approach of the
Appeal in Gl'car Pence Shipping and allirmed the existence in Singapore
of nn independent docll'inc of mistake in equity. While conceding that it
might be difficult 10 distinguish between 1he scope of the common law
353
exccptional1y narrow, nnd is arguably inconsistent \\•ith the approach taken
in n nun1bcr of modern cases. For ins-lance, in J/o Seng Lee Construrtion Pie
Uri 11 Nian Cl111m1 Co11strucN011 Pie Ud (200 I), Judith Prokash J ciied with
354
Chapter 12;
appro\'al the broader approach of Steyn I in tht Auocrnwl /npn11= Ba11k
case, that is, tlw the equitablt doctrine
broadtr than and supplement>
1he common law doctrine (see para
- •
to • oon"'8a tn11rtet
5hated by bee\ JNWM1 M the llrM oC oonrr.a.
Conmott
Similarly. the Cou rt of Appeal
in the Dig1/111rdmnll case held that mistake m equity has to be broader and
more Oexiblc thnn its common law counterpart. To illustrate. lhc Court o(
Appeal $uggestcd (as an example at [751) that mistake in equity could apply
to a widu 111,./ more opc11·ended category of "fundamental" mistakes. Thus,
while there is llS yet no precise test for determ ining 1vhcthcr .a mistake is
sulficicntly "fumdamcntal" to invoke the doctrine of mistake in c.quity. It is at
lcll>t certain that this concept is broader and less stringent than that required
under con1n1on law.
!step
I
1
ol con&rJliCt - Htt:i u.. contract aAx.r..ed the ri:sk
ot such mistake to fl.lhlt patty?
Yes
No
-
- --
tt\e conir11ct void n1 common flfw'1
,
"
/
.... _
ooetnr'l6 of mistttk• dOes l>Ol
apply. Contract is v11td. and
petty wtio has assumed rilk
b. llabl& for bt&8ch ot contract
Does tho mfslake rt ndor the oonlrad essenUaJly and
rfldlcalty d1ff• Mnl lrom 1ha1 which the parties hftd in
mind'?
English law requires lht mlsti;tkt to
render the
impo1sibl• to
- -...
Yos
No
Contr8CI Is vOld
8b /Mio
porlom"I
Box 12.1
lid
______
Should the common law and equitable rules be merged?
__,
The difficult •nd controversial relationship betWttn the rults at common law and
in equity Is a rdlcctlon of the lemion
the desire for /tgal ctrta1rr1y on the
one hand, and rtm«iral lltxlb1li1y on the other. In the roregoing d11cu11lon, we have
ellabhshed that J I present, the law in Singapore would examine the cllects of a
common mistake In two suiges. It begins with a strluer enquiry at common law,
rollowed by • broader and more flexible test in equity. However, the value and
viability or this two·slagc enquiry will continue to hinge on the ve1y r1nc (and some
would orgue, non-existent} distinction benveen • "radical and euenUal" mistake
at common law and the "rundamentai• mbtake In equity (see rlgure 12.2). In the
Crtol Pto<t Sh1pp111g case, the cour1 resolved this dilflculty by opting tor a single
and strict common law rule. It might be asked: Would not the alternative and
contrasting approach ol h•ving a " ngle but more llex1ble rule whkh only renden
contracts l'Oidoblt tor fundamental common mistakes be t'(lually or P<'rhaps even
more merrtonous? (For • proposal to that effec1. see A Phang, •common M11lake
tn English Law· Tht Propo>ed Merger of Common Law and Equity" (1989) 9 Ltyal
Stvd"'l 291-306). Indeed, that is likely to be the ptactocal efftct ol the existong twostage enquiry 11nce • p1.. of common m11take would most cer111nty be made both
at common law •nd 1n tqu1ly.
Finally, It 11 lmj>OftJnt lo note that there have been numerou1 CAiis !or
rcrorm of the law In this aru (see, eg, the observations or Lord Phillips In the
Crtol Ptoct Shipping at p 726, A Phang, "Common Mistake 1n English Law: The
Proposed Merger ol Common Lt1w and Equity• (1989) 9 Ltgol Swditl 291, 303-304;
and A Chnndlcr, I Devenney and J Poole, •common Mistake: Theorctlcul Juslifica·
lion and Remedial lrtflexlblllty" (2004) Journal of 811slnm Low 34 ·58). That might
be the l:>rst way
given the complex and contenllou1 nature or this >ubjecl.
355
Singapore
Englarld :
'
Is the conna
'
tqul)"?
...... - . - - . . . . n ( T " 1 1 s
bmld« lhln !hat at common f f)
Connc:t tS valid and blndrng
No re<o<ne to equcy
No
I
'
Contrect lit velid
oncl binding
I
Iv..
'
CQl'IV'ICt it voidl!lbt.
may
and
a.et a-Sldo on tormt
Figure 12.2 The cllcct or a common mistake
M UTUAL M ISTAKE
12.30
A mutual mistake arise• when parties arc dealing wuh each othtr .i
eron·purposes. For in<tancc. a •Cller S offers to sell a brand ntw car and 8
acccpt.s the ofT<r thinking that S is offering to sell, inste•d. a >«Ond ·hand
car. Neither party knows of the othtr's mistake at the time of contr.ct
Ort such facts, it is dear thol no contract arises m lh< first place because
therr is a complttc l11c4 of comcitlt11ct bctwct11 offer am/ 11rupta11u. A;
the reason for the failure of the contract lies in the fact that 11 1s not
properly formed. this category of mistake ought lo be more appropriately
untlcrstood as an npplicalion of "fonnntion of contract" principle• (sec
Wei/mix Orgmrlrs (1111cr111111011al) Pie I.Id v La11 l'u Ma11 (2006) nt (SSJ).
of
Wh ile conceplulllly dist lngulshoblc, the /Jrnctrcnl effect of •
mutual 111istakc is •ubsllmt ially •hnllnr to a finding 1l1at the contr.lCI \'Oid
nb l11itio.
356
Chaprer 12: Misrake
Principles of Singapote Business Law
the- 1nistake relates 1nere1y to a fact or an as.su1nption that does not forn1
part of the contract. '[he decision in Smit/! v lluglr_, (187 1) established this
requirement, In that case, the defendant purchased oats fro m the claimant
thinking that they \Vere old oats, but the clailnant was in fact offering to
sell new oats. Upon discovering the mistake, the defendant (buyer) refused
to
delivery of the new oats. The court held that the effect of the burer's
U NILATERAL MISTAKE
Introduction
12.31
The focus of this category of m istake is o n a situation " 'here -0ne party is
mistaken bur the other party is (or ought to be) aware of the first party's
mistake. SituMio ns of unilateral mistake are traditionally sub-classified into
h\.'O furt her categories, na1nely. (1) a 1nist:ike as to a terrn of the contract,
and (2) a m istake as to a par1y's identity. A m istake as to a contractual term
may be pleaded bot/! at common law and in equity. In contrast, the effects of
a 1nistakcn ide ntity arc dctcr111irt{'d only by c.om1non la'" principles.
1nistake depends on whether the seller knew that the buyer \Vas contracting
in the erroneous belief that (I) the oats were old 011ts, or (2) the seller was
co11tmcting to sell old oats. 111 situation (I), the mistake has no effect on
tht- contract even if the seller kne\\r of the buyer's error. In this case. 1he
buyer labours under a kind of selfdeceplio11 and the seller is not obliged to
correct the error under the general rubric of cnvcal emptor (let the buyer
Mistake as to a Term of Contract
beware). The result is different in situation (2). where the seller knows that
the burcr has made a mistake as regards the term of the contract (ie. the
seller's promise to sell old oats). Unlike situation (I), the mistake in situat ion
(2) will relieve rhe purchaser from his obligation under the contract.
(1) Unilateral mistake at common law
12.32
12.33
In gener3l, if A contracts to purchase goods from B in the mistoken belief that
the goods are o f a certain qualit )'• A's n1istake has no effect on the contract unle.ss
B has caused or contributed to Ns mistake. Except ionally, if ;'\s mistake relates
to a fundanlental tenn of the contract, and the 1nistake is krrO*''" to B, then A
may resist the enforcement of the contrJcl on the mistaken term. To illustrate,
in Hartog v Colin & Shields (1939), the claimant contracted to bu)' Argentine
hare skins
the defendants. The purchase price was n1istakenly stated in
the contract by the pormd instead of by the piea. 1l1crc was evidence that the
industry practice then was to t mnsact on per piece rather than per pound
basis. TI1e oral and \Vritten negotiat ions le:lding to the contract also referred to
price per piece. It was held that the claimant could not enforce th e cont ract as
he must have realised that the defendants had made a mistake as to the price.
'lhc Singapore Court of Appeal in IJrO!ldley Constmrtion Ptc Ltd v Alncrnn
Design Ptc Ltd (201 8) identified the three requirements for unilateral mistake
ar common law as follows: ( I ) one party has made a mistake, (2) the mistake
is a sufficiently important or fu ndamental m istake as to a term, and (3) the
non-mistaken party has actual knowledge of the mistaken party's mistake (al
[42)}. The second and rhird requirements ore of greater legal significance.
and will be lhc fo'us of lhc following sub·swions.
(a) Mistake must relate to o term
12.34
For the unilateral mist;1ke to be operative, it must relate to " term of the
contract, that is, a pronrisc 1nade by one o f the part ies: it is insufficient if
357
(b) Knowledge of the non-mistaken party
12.35
In Clnvee Kin Keong v Digilandmnll.com Pte Ltd (2005), the Court of
Appeal clarified that a unilateral mistake as to a contractual rerm will
o nly be operative at con1mon la\\1 if the
party has nctunl
k11owledgc of the other
m istake. This requi res proof of the no11111istaken party's subjective state of mind. The best evidence of a person's
intention \VOuld be his own ad111is..'iion or so111e other incontrovertible
evidence. In the absence of such evidence, however. his state of m ind will
have to be "infer red from all the surrounding circumstances, including
the: experiences and idiosyncrasies of the person and '"hat a reasonable
person would have known in a similar situation" (al [41 )). In other words,
whether o r not the contracting party concerned ;ictually (or subjectively)
knew of the other contracting party's 1n istake is objectively a,scertained. I(
a person wilfully slruts /!is eyes to the obvious, the court is entitled to find
th;\t he has nctual knowledge of the matter he is deliberately ignoring.
12.36
This process of inferring subjeclil'e knowledge from objCCl ivc circumstances
ma.y be illustrated by the facts of the Digilmrdnrall case. The daimants in this
case were six friends who placed orders through the defendant's \'lebsites. for
a tot;1l number of 1,606 laser printers ;1t $66 each. Prior to the transactions,
the claim;m ts had done searches o n the Internet and were aware that the
o rd inary retail price of each printer wos just below $4,000. The unusuollr
358
Chapter 12;
low pric< •1oted on the defendant's websites ..... in fact a mistake of the
drfcndant's employ«. When the defendant rdu>td 10 mr<l the orders on
account of the error. the claimants brought an action 10 enforce the contraCls.
The Court of Appeal affirmed the High Court's finding that the claimants
had actual knowledge of the mistake (and hrncc their claims failed). 1hc
relevant evidence included the claimants' sub1ewve attributes: the fact
thnt they were all educated, streetwise and »vvy 111div1duaDs suggested
thnt they did in foct appreciate that the nbsurdly low price was ;1 mistake.
the hasty
The cxt1.1ordhrnrily large number of printers ordered. a< well
manner in wluch the claimants •snapped up" the orfer, alM> poi nted to the
fact that the claimnnts knew of the <rror, and were intent on exploiting this
rMc oppo11unit y. Any reasonable peison <landing 111 the claimants' position
would have harboured a very real suspicion as to the correctnes< of 1he
price and would have sern fit to enquire before taking up 1hc offer. In failing
10 m•ke enquiries, the claimants were wilfully <hu111ng their eyes 10 the
obv1ou<. On these facts, 1he courts were clearly ju>111ied m thctr conclusion
that the clam1J111S actually knew of the defendant's mistake. Howr...,r, on
1he whole, lhe Courl of Appral has endorsed • very generou< approach
to the process of ascertaining actual knowledge, which may overlap
•Ub>lantially wilh the finding of ro11strurtivr k11owlrdgc. 1 his may rcnd<r
it ha1d lo di1tingubh between the common la_. nnd equitable doctrines of
unll111ernl nustnke (see the discussion in Box 12.2).
Box 12.2 (Conlinutd)
Orgcnid (lnttrnfllJOnOI) Pit ltd v Lou Yu Mori (2006); T M Ve6, "Unil.lltr•I M11tokt
on Contract: five DegrttS of fusion ol Common uw and Equity" (2004) S1ngoporr
/oumol of L«Jol Studits 227 240, and P W lee, •unilateral M11tlke on Law & Equity
- Solle v Butcher Reinstated• (2006) 22 Journal of Contract Law 81 -88.
(c) Conseq(Jences of an operative mistake
12.37
(2) UnllatNal mistake In equity
t.2.38
1'
0 0-'f.--
Box 12.2
Unllatcra 1 mbtakc at common law and equity - are they one or two
doctrines?
The dl111nellon d<Jwn between actual and cotutroctM
In Oig•londmol "
a doftocult and 11111' one.
the court's gelll'rous •pproach 10 the proof ol
actu,J knowttdge, 1t Is pon1ble that this ddfoculty of d•st1ngulshong b<twttn actual
and con11ruc11ve knowfedgt may in practo<e rtduce the equ1tablt juroldiclJon to the
potnt of ln119n.t1c•n<:c. Thb po»•btloty is bolstered by the f.i<t that the equitable
1u11sd1ctlon requl,.s the proof of an additional element of lmpropnety. In practice,
that will lfqulre that the non·m1staken party be guilty ol some unconsclonoble
conduct, and be constructively aware of the other's mistake. But would not the
able to infer actual knowledge of the mistake on such faru?
coun also hnvc
That snld, ll may be lhM the real reason ror premving the cqulloble jurisdiclion
ii to rnsurr that the court Is endowed with a certain degree or flexibility In
dispensing a lu>l remedy porticularly in the excepllonal case Involving third party
interests. To lhot extent, the equitable junsdlcllon would remain important, even ii
rarely Invoked. Foo more detailed dlscuuions of these and 1elatcd i»ucs, see Weltmlx
be""
359
In Digilandma/J, the Courl of Appeal emphasised the distinct consequences
of an operative 1111,rnke at common law and in equity - on arfected
contract 1s void at common law but " merely voidable in equity. However,
this proposition has to be qualified 111 the context of unilateral mi>lakes.
ru between the contracting part1«, it Is clear that an operatt1't m1>1ake
would
the t1011-11ustnkt11 party from enforcing the nppnrc11r contr>Ct
(including the mistaken lcrm). I lowrv<r, it dots not follow that th< contract
is always void ab 1111t•o at common law. In some situations, the 1111srnkcn
pprty miy enforce the hterPI
of
tontrntt, or M:ek rmifi<ntrv11 of the
contract to reOect the parties' true inten1ion (sec para l 2.56).
In the Digilatulmall ca.e, the Court of
confirmed the existence of a
doctrine of unilateral mistake in equity that may render the contract voidable
In equity. This equitable doctrine differ> from Ilic common law rule in the
followmg ways:
o
The rationale underlying the rqutt•ble doctrine 1s that of
bility. A contract affected by uml•t<ral mist.ake may only be set aside 1(
the court is sati>ficd that 11 would be 1mconsc-101u1bl<! for the non-m1>takcn
party to enforce the contract. Such unconscionab1hty ma)·
for
mstance, when the non mlst•ken party is guilty of some ·sharp practice•
or has consciou>ly omiued to di;abusc the mistaken party of his rrror.
o
·n1e rcqubite level of knowledge for the equitable doctrine 10 be made
out is different. In equity. It is unnecessary 10 prove thot the 11onmistakc11 party has actual knowledge of the other party$ mistake.
Constructive knowledge on the part of the 11on-mistnke11 party will
360
Principles of Singapofe Business law
Chapter 12: Mistak•
suffice. Constructive knowledge o f a fact is itnposed on
;a
person in
circu1nstances \\ here a re:lsonablc person standing in his position \\'Ould
1
have known or, at the very least, wo1lld have mnde enquiries
or the
1nistake n (act. 1-fo,"ever, this does not rn ean that a non·1nistaken party
Mistaken Identity
(1) Introduction
12.39
is guilty of unconscionable conduct merely because he has construttivc
k11owlcdgc• of the other pa1·1y's mistake. The Court of Appe•I emphasised
thnt sorne ntltfitionnl eletne nt o f in1propriety is required for establishing
unconscionable conduct.
o
An operative unilateral rnistake is said to render a contract void at
common law but voidable in equity. As explained in paras 12.6-12.8, this
distinction is critical in detern'lining the
of subsequent purchasers
(but sec the qualification discussed in para 12.37).
This category typically involves cases where one pany's consent lo an
agreement is procured b)' the deception of another. lf a seller S agrees to
sell his car 10 a buyer B. "ho has deceived S into b clievhig that he was X,
1he contracl is affected by S's unllateral mistake as 10 Bs true identity if B's
ide ntity is nuiterial, that is. an in1portant foctor \\1hic'h induced the contract.
The difficulty in such cases is determining whether the mistake will render
1he contract void or merely voidable.
12.40
Box 12.3
Unilateral mistake in an age of artificial intelligence
How would 1he requirements of unilateral mistake .lpply to transactions carried out
entirely by computers? For example, commercial trades today are frequently carried
As between S and B. this questio1i is insignificant since S. the mistaken
party. would clearly ha\'< the right to set aside 1he contract on account of
B's
Ho\,•ever. th<' distinction
critical if B has so1d the car
to nn innocent third party TP before S discovers tile fraud. In such cases.
the contest is often reduced to that berween two innocent parties - S and
T P - because B. the fraudster. \\rould usually have absconded or is of little
finantial means (and hence not worth suing). If 1he mistake renders the
contract between S and FI void, S will be able 10 recover the car from TP
becau,se B, not having acquired any property right iin Lhc car, has nothing
to
to TP. In the converse situation where the co1itract between S and B
is merely voidable. B would have acquired property a·ights in the cor. which
he is able to subsequently transfer to TP (provided S has not rescinded the
co1·11ract with B). S is therefore unable to recover the property from TP in
this Instance. In all such c"scs involving innocent third parties. the court
out by computer algorithms. In such circumstances, what would be the relevant
"mistake" and "knowledge" for the purposes of the law? Whose knowledge would
be relevant, and at which date should this knowledge be assessed?
The Singapore lntemalional Commercial Court In 82C2 lid v Quoine Pie Lid
(2019) observocl that there was no relevant authority dealing with these questions.
In this case, Simon 11,orley IJ held that the relevant mistake for the purposes of
lhe doctrine of unilateral mistake must be •a mistake by the person on whose
behalf the cornputer placed lhe order in question as to the terms on which the
is placed in a difficult position because it is require d to prefer o ne of two
innocent P'"ties. II is thus not surprising that the cases dealing 1vith this
subject do not all speak with one voice, :rnd the rules that do exist may not
computer was programmed to form a trading contract in relation to that order"
(al (205]). As lo the thorny issue of the requisite knowledge, Thorley JJ held that
the relevant knowledge was "the state of mind of the programmer of the software
be e ntirely satisfoctory.
of that program at the tfme the relevant part of the program was wr1itten" (at
[2111).
Is this a satisfactory solution? This dec.ision illustrates well the challenges which
technological advancements, es.,.,clally In the area of artifidal intelligence, pose lo
legal frameworks formulated In an era when such technologies were enlirely
unheard of. Indeed, artllicial Intelligence and nl9orlth1nic <:lecision-maklng pose a
specific challenge to the oft-used requlremenl of knowledge in legal doclnne. The
law must and will evolve lo accommodate these new realities of the commercial
world.
361
12.4 1
To determine the effect of a mistake as 10 Identity. the courts· general
approach is to exan1ine the facts to a.scertain \"hether there is in fact an
ngreement between the mistaken party and the (deceit rul) counterparty. Thus,
i( S intends to sell his car only to X, then no agreement is reached between
S a nd B when B allempts lo purchase the car by prdending lo be X. Such
int<:ntio1i is established
by rdercncc to what reasonable persons
wo<ild undersrnnd of 1he contracting 1>nrlics' words a nd conduct. Under this
approach, lhe 1aw· furlher distinguishes bct\.·veen hvo sub-categories. na1nely,
( I) facc-10-foce transaction>, where lhe co11trnct between S (the seller) and
362
Chapm 12. Mistake
Prmc1plt's of Singapor't Busint:ss
B (the fraudster) is concluded by th• parties an the presence of each other;
where the parties arc not in the physical
presence of each 01hcr nl the time of contract.
tha.t tht- nlh.take \ Vas an operative nustake and the claimants succeeded in
thdr claim . '[he coult appeared to be satisfied lhal the pr<surnption that
the- , Jaimants in1ended 10 deal w11h tl1c person present (ie, the rogue) has
been rtb111ud. For an<tance, Pearce LJ found, on an ob1ecth'C ,,.w, that the
claimanu only intended to contract with Mr Hutchinson and not th< rogu<.
Th., fact that one of the claimants had taken steps 10 verify the tx'blence
of Mr Hu1chmson at the swed addres.< was regarded :as s1rong evidenct of
;uch intenhon. 1he claimants were not mistak<n as to an allributr of the
counterparty (wh1eh would not invalidate a contr.1e1) but his '"'Y 1dct1111y
(which would). In contrast, Pl11/11ps " Brooks wa.< distinguished on the
ground;, that (I) the claimant m that ca>e intendtd to deal with the rogue
., • WSIQllll'r only and (2) the contracl was possibly concluded brfore the
repre<enl>tion br the rogu• had been made, and hence the true 1den1ity of
the- buyer was not critic.ii to the contract.
anJ (2) transactions "at a
(2 ) f ace-to-face transactions
12.42
12.43
In face-to-face tran>acliOn>. there i> a prrsumptro11 that the parties intend to
deal wnh 1/rr pl1ysr<al per1011 wlro rs prcsmt, in which case S is presumed to
ha,.. intended to contract with 8, th< fraud<t<r. The contract between S and
B would th<n be valid. though voidable at the optJon of S (on account of Bs
fraud). If S doe• not d1>cover th< fraud m t1111< so :as to rescind th< cont:raCI
with R. a 1hrrd party who purchase> th• car from 8 acquires good titlt 10
it. 1hus. in Phillips v Brooks, Ltd ( 1919), a rogu< rcpmented himsclf to the
claimant Jeweller ns "Srr George Rullough of St James's
After th<
claimant h"d checked the directory to confirm 1ho1 there was •uch a person
at the given addre». he accepted a cheque from the rogue in exchange for
a ring. The rogue then pledged the ring with the defendant p awnbrokers
for on advance. Not •urprisinglr. th< cheque was dishonoured and the
rogue wns nowhere to be found. 'I he clamlnnl then sued the defendants for
the return of 1he ring or 1he volu'' of ttw ring plus damages for detention.
Horridge J held in favour of the dcfcndonls. reject ing the plointiff's argument
for mistaken identity. In the learned Judge's vic1v, the sclkr i11te11ded lo
co111rac1 with tlrt p1u·so11 p,.c•st·ut, nn1.J lhc1·c ,.,,as no error as tCt the p<'rson
with whom he contracted, even though the seller would not have made the
contrnc1 if he had known of the rogue:, true identity.
Subsequent to P/1111/ps v Brool.s. howcv.r, the Fnglish Cour1 of Appeal took
a contrasting approoch In l11grnm " l.irrle (1961). In tllis case, the rogue
represented himself to the claimants (three elderly ladies) a§ "Mr PGM
Hutchin<on "'ho laved nt Stan'1e•d llouse. Stansiead Road,
The
dain1ants \\'ere the joint owners o( a C.lr and \\ Crc ncgotialing '"ith the
rogue to sell it to lu111. One of the claan,.nt; went to the nearby post office
10 \•enfy the name and address gh·en by the rogue an the telephone
dirtctory. 1hey then sold the car to the rogue and accepted his cheque in
exchange. The rogue m turn 60ld the car to the defcnd;int who purchased
it (for ca<h) an good farth and wnhout notict of the fraud. Th< cheque was
subsequently dishonoured and the claimants brought an action against the
defendant to recover tither the car or 11s valu<. Unlike P/11/11ps v Brooks,
however. a maJonty of the appeal judg" (Sdlen and Pence LJI) held
1
363
taw
12.44
Despite the courts •llempl to distinguish Ingram " Lillie from P/11/lips v
11 i• clear lh•l the facb of the two cases are <xtremcly dose.
Subsequent ,.,., have therefore found It difficult. if not impO>Sible. to
reconcile these two conflicting decisions. Some yeus lalcr, this issue
co11frontcJ the llnglish Court of Appeal in Lewis v Averay (1972). In this
case. 1hc cl.1imt1111 hlld a<lvertiscd hb Intention 10 sell his car in a newspape1.
'lhe rngue respo11dcd and introduced himseli as "Rtchard Green" who was
lh<•n a wcll· known <1ctor. 1hc 1·oguc then wrote a cheque in payment for 1hc
car. When .1>kcd for proof of hh identity. he showc.d the plaintiff n spcr//11
vf ndnus.u'ou to a studto wlud1 bore the rogut's pl1otograplr as ..,ell as
1111 offirrnl Siar/I/>. 1 he claimant duly accepted the rogue'.< cheque which was
of cour>c dishonoured. Applying the pre.um1Hion Lha1 a com racting party
in1c11d< to deal with the person who is physically present. the court held tha1
the- mi>take did not render the contract void. In particular, Lord Denning
wa. of the view that the material facts of P/11/lips v Brooks and l11grnm v U11/c
were an fact indiS1ingu1<hablc and more 1mportantl)'. 1ho1 1he distinc1ion
(made in l11grn111 v Little) between a mi>lake as 10 the idmtity of a person
and a mhtakc
to thal <ame ptr>on"s n11rrb111ts was 100 ftnt. The lenned
Judge observtd (at p 207):
I felt ll wrong th.i an innocent purchaser (who knew no1h1ng of
what pa»cd b<twrcn the •<Iler ond the rogu•) should ha\-. his
1itlc depend on such fine refinements. After all. h< has acted "1th
complete circum)pcction and m entire good faith: whereas rt wa-< tht
Chaprer 12: Misrake
Principles of Singapotc Business Law
seller who !er the rogue have rhe goods and thus enabled him to
commit the fraud. I do not, therefore, accrpl the theory th al a m istake
as Jo identity renders a contract void. I think the true principle
pri.nciple would be rare, but suggested that it might arise in aises i1wol,•ing
t\.\'0 parties have co1ne to a contract - or rather, '"hat
appears o n the focc of ii, to be a contract - the foci that one party
is mistaken as to the identity of the other does not mean that there
is no contract, or that the contract is a nullity and void frorn the
beginning. II only means that the contract is voidable, that is, liable
to be set aside at the instance of the mistaken person, so long as he
does so before the third parties have in good faith acquired rights
under it.
extren1e facts including, for instance. a c.ase \\!here the in1poster in1personates
another through physical disguise. Lord Nicholls (in dissent) admitled (al
p 939) that "it is not easy to think of practical circumstances where .. . the
presumption will be displaced:' Lord Millett (also in dissent) went further
and suggested that there might be mer it in making the presumption
a conclusive rule (see p 949). It would thus appear that although the
presurnption is rebuttable. such rebunal will onl y occur in the n1ost
exceptional circumstance.
is ...
l\.Vl hen
However, this suggestio n for a single rule to govern Ill/ contrn<IS (whether
or not they are face-to-face transactions) involving mistaken identity that such contracts should only be voidable and not void - has not been
accepted by the I louse of Lords (now known as the Suprem e Court) in
Shog1m Finnncc Ltd v Hudson (2004) (sec paras I 2.49-12.50).
12.45
12.46
Phillips and Walker (in the majority) described the presumption as a
"strong" o ne. Lord Walker conceded (al p 980) t hat exceptions to the
In Sho111111 Fim111ce v H11dso11, the House of Lords confirmed that the
presumption of an apparent contract applies 011ly in face-to-face transactions, and refused to extend lt to transactions concluded in v.rriting (see
para l 2.50). Significa ntly, the reasoning of the court further suggests
that the decision in Ingram v Little was incorrect as there was, in that
case, insufficient evidence to rebu1 the presu1nption that the clain1ants \\!ere
contracting with the rogue. In lllgmm v Lillle, the majority judges had
found that the three elderly ladies auached great importance to the identity
of the buyer, and concluded, o n that basis, that the presumption was
rebuued. However, as Devlin LJ (as he then was) pointed out in his
powerfol dissent in lngmm v Little, the presumpt ion could 1101 be rebuued
simply by piling up evidence to show that the claimants would not h.-•e
contracted with the rogue if they had known of his true identity. Such
subjective intention of the victim is likely to be present in most cases
involving identity fraud, but it does not alter the fac t that , o n an objective
12.47
Before leaving lhis 1opic, it is necessary to consider one o ther difficulty
generated by the judgmcnt in I11grm11 v little. As mentioned in para 12.43,
a distinction w11s drawn in that case between a mistake as to a person's
irle11tity (which avoids a contract) and a m istake as to his attributes (which
docs not). For example, S may contract with B in Lhe mistaken belief that
B
X, a wealthy individual, but X does not in fact exist. l n such a case,
it may be said that S is not mistaken as to B's identity (since X does not
exist, X and B arc the same person) but only as 'to his cr<ditworlhiness
(al\ auribute). 'TI1is distinction has, however, been severely criticised. ru
Lord Millett o bserved (at p 951) in his dissent in Sltogu11 Finnnce:
IA) person may be identified by reference to any o ne of his attribu1es.
I le may be identified as the person in the room, the person who spoke
on the telephone, the person who appended the illegible signature,
the writer of the teller under reply, or lhe person who made the offer;
but he 1nay also br identified, and
.111orc
as the
person whose creditworthiness has been checked and found to be
satisfactory. Any of these may be 1he means of iden1ifying a unique
person. An auto1natcd telling 1nachinc is progran1med to identify a
customer by a combination of a PIN number and a number encrypted
on the card which is inserted into the n1,1chi ne. Jn illl increasingly
arc accustomed to id(·ntifying ourselves by PIN
vic'v) the vic tin1s were directing their acceptance to the very person
dectronic age
standing in their presence (ic, the rogue).
numbers and passwords; the need to elimina\e fraud may in time
C<>usc us to identify ourselves by retilrnl imagery, which at least has
Once it is accepted that the victi111's subjective intention is insufficient
the advantage of being a featu re of the physical body. But even in the
case of a credit card transaction there is an ambiguity. Is the customer
to be identified as the person who produces the card? Or as the person
evidence 10 rebut the presumption, however, it is hard to imagine what
evidence wo11/d suffice for such a rebuual. In Shogun Fi11a11cc, both Lords
365
\i\'C
366
Chapter 12;
who..e cord as
The whole poin1 o( • crodit card fraud is
1hot the gCl<>ds should b<! supplied to 1he per'°n who produces 1he card
while 1he cos1 is debned 10 1he accounl or 1he
with a 11olen dri,,ng hctnct b.Jonging 10 one Patel A copy of tht hcenct
._.. wdl as the
agrttment bearing the rogue's forg<'d •ignalure
were faxed 10 1hc
the finan'c company, for 'rcdn asscssmcm.
Havmg sa1isfied i1scl( as regards Pa1el's creditworthiness, the claimonu
advised the dealer accordingly ond the dealer. in turn handed 1he car 10
the rog\le. The rogue sold the car 10 1he defendants 011 tht followrng day.
As the transaction involved n wr1tte11 agrcetnent, the court categorised thi"'
as non fa'-'·IC>·fuce transaction trnd held lhnt. on an objective eo111tr11etio11
of ( he hire-purcho;c agrccnwnt, 1he clnhnnnls had intended 10 1n1nsncl wllh
P:itel - 1he person named In 1he :igrcement - ond no1 1he rogue. 1hcre
being no conl ract between 1he claimants and the rogue, the <lcfendnnl> did
1101 acquire any 1i1le 10 1he car.
whose card u
produced.
The example> given by Lord Milieu pointedly dcmonslrnlc that the distinclion between 1dcn1ily and allribu1cs is highly art ificial and rather impractical.
'lherc is therefore reason to argue 1ha1 lhc effect
an idml ily m islake
should not depend on this ar1ificial di.iincl ion.
or
(3) Non face-to-lace transactions
12.48
Where 1hc co111rac1ing parlics are no1 in physical contact with each 01hcr,
ii is rcla1ivcly easier 10 invoke the docirinc of mi;taken identily. In 1hc
leading ltousc of Lords decision in Cu11dy 11 L1111/$ay (1878), the plaintiffs
were manufacturers of goods based in Ireland who had received wnttm
ordcrs from a rogue named Alfrod Blenkam. 1he rogue wrote to the
cla1mnnl5, gMng his address as "37, Wood SI, Chupside and signod
hi< ltncrs an such an ambiguous monner 1ha1 1hoy appearod 10 road a.<
"Blenkiron & Co''. As a resuh, the cla1ma111s were undor 1he impression
Ihm 1hc orders were from a respec1ablo
bearing 1he name of
"Rlenkiron & Co" opcra1 i11g from " 123, Wood SI''. 111c cla iman1s duly
despnid1ed the goods ordered 10 1he rogue who. In 1urn. sold them on to
1hc JcfcnJanls who were complNely
of 1he frnud perpetrated by
1hc rogue.
clt1i111an1s sough1 10 recover the goods from
defrndants
(ie, the third 1•art)' purdiasers), arguing 1ha1 no properly in the goods hod
pa»cd lo lhc rogue (and hence the d<fendan1>) srncc the initial contract
with the rogue wn void for mii.1ako. 1hc I
of Lord; accepted the
clounanls' argument, holding that since they had inlcnded to deal only
with 8lenk1ron & Co. therr was no con1r.c1 wnh the rogu e Blenkam.
C11111/y v U111ls11y was applied by the Singapore Court of Appe'11 m Tribu11•
/11vcs1me111 Trust 111< v Soosnn Trading Co Ltd (2000). II
howe>·er. be
1101ed 1ha1 1h1s wa; not a case involving third par1y righis: the coun only
had to dc1cr111i 11c whc1her a con1ract was formed b<1wee11 1wo ncgo1ia1mg
p.iriles.
12.49
A more 1·ccc111 example of the approach appl lcnbk 10 non faa-to-facc
tn1nsac1lons I• 1hat of the House of Lords in Sl1og1111 F111n11rc /, Jd v H1Jdso11
(2004). Here, I he rogue went to a car denier's <howroom ond iden1ihed himself
367
12.50
De•pite 1he dcfendan"' forceful arguments, the court rdused 10 txtcnd the
applicable 10 face-10-facc trinsacllons 10 cases 111voh1ng "nu en
contracu. In the loller cast, 1ht in1en1ion or the con1r.1cting panit• will havt
lo be ascertained by lookmg al the evidence >urrounding 1ho conlract. Such
an approach has 1he efTec1 of favouring lhe origma I 01"11er over the third
party purchaser for 1he following reason. Where the contract 1s 1n 1'.Tlling.
lh" parties' objcclivc inlention will be inferred ma.inly, if 1101 cxclu>ively,
from 1he wrillen agreement. Since n fraudsler wiU in all likelihood use only
his folse identity when
ln1 0 :) wriltcn agreenient. 1he ngrccrncnt
would in\'arinbly be ilwnlid 0 11 the ground that il was inlcn<k-d 10 be mode
with lha1 assumed ident il )' (ra1hcr than lhe rogue) . 11
then, 1hat
the- o riginal owner would he enlit led 10 recover the sub1ec1 111ancr of 1he
contract from the third party purchaser.
12.S I
Fmally, 11 is somecimo< s•id th•1 whero • p•rl)' enicrs in10 a con1ract wnh a
non·txislmt mtity, 1ha1 patl)' will gcner•lly be held to ha\1' conlr•cted w11h
t/1e writer of t/1t corr.·spo111lm1c (1c. 1he
and there would therefore
11ot be an opernll\'C nmtake. In Kmgs Nor1011 Mttnl Co (I.id) v Fdridgt,
/.krre/I, and Co (Ltd) (1897), rogue named Wallis wrote to 1he claimants
and placed orders for some metal wire> after fol>ely rcpresen1111g himsdf "'
Hallam & Co, which did nol 111 l.1Ct exul. The letterhead used by Wallis
dcµictcd n large foctory wilh n lb1 of overseas depots. As is usual, the rogue
then sold 1he goods 10 lhe defo11d11n1. nn unsuspeclin.g 1hird pariy. The court
held 1ha1 the con1rac1 was clead y made with Wallis, the writer of the lcncr.
368
Chapm 12. Mistake
Prmc1plt's of Singapor't Busint:ss law
Box 12.4
Should I here be different rule• for face-10-la<e and non face-to-face
tran1actions?
While the maionty Liow Lords 1n Shogun f1nonct may have aff11med the di•IJnct rules
appl)'lng to facf-IO-f<Ke and wnllen "9retmenls, thLJ d1Sltncbon may
be cM!lenged on future uses goven lhe very forceful dm.,nt ol the m1nonty law
Lords.. In essence. Lords Nteholls and M1lle1 found the d111mction to be arbitrary and
illogical. They
aga•nst haVtng different rules apply 10 what was essentially
lhe same problem on both 111ua11ons Whatever the medium of communkalio<>,
the problem has •nsen because the VtClom hu <19reed 10 a lransaclJOn in tht
b</Jd thal tht
ht os dfOhng with IS tht fHtSon he rtpmmts himsdt to
So why should an innocent thord party's nghu depend on the fortuitous mode
through whkh the fraudner perpelratts his fraud? In their lordshrps' view, the
presumplion thal a party 1n1tnds 10 con1ract with the person he as dealing with
should apply to o/I contram 1nductd by mostakrn identity, regardless ol whether
the parues con1rac1ed In each other's physical presence. Hence, all such contracts
should be voidable, and not void Admllltdly, lhos will favour the third party
•
pun:haser over the on91n•1 owner In most ca5es Suth an outcome may, however,
be 1ustified on lhe ground 1hat the original owner is usually In a less mentonous
position
the third party since the former could have done more to prevent
the fraud.
Insofar as the approach advocated by Lords Nicholls and Millett avoids the
arbitrary dlsllnctlon between race-to·lace and Wrillcn llansacllons, It Is lO be
preferred. However. It may be questioned whether It Is correct lo assume lhal
the third party Is o/woys more deserving than lhe original owner It may be that
the best way out of this conundrum Is to lntroduco legislative reform lhal confers
upon the courts the discretionary power 10 opporllon the loss bciwccn the parties.
(Sec the discussion in A Phang, P W Lee ond P Koh, "Mistaken Identity in the
House of lords" (2004) Combrld91 law /OIJl'll()/ al pp 24-27.)
... . . . . . . . . . . . .. . .,., ,
IPJ §
-.. . . _ :z f
\
,lit
fc 0
;;
,.g !:"'
·" g ,,.:li <
u liu.
The courl indicoicd, however, thal the rc•uh could have b<en different if
Hallam & Co dad exi>I a1 1hc lime of the contract.
12.52
llowcvcr, 1hc ra1ionalc for 1hl; rule is far from obvious. "!he undetl)'ing
reasoning appears 10 be 1ha1 1f 1he •s..<umcd char•cter ts non..,x1s1en1,
1hcn 1hc vic1im is nol in fact deceived a; lo the 1dcnllty of the rogue, but
merely a< to h a< a11rabu1e>. However, such tcasoning clcarli• harks back 10
lho unfortunole dtshnclton between 1Jcnlil1• Jnd allribuks, lhe soundntss
of which ha< bun quesltoncd (<t• p•ra
For an 1Uustra11on as 10 the
cff<et< of mi>t'3ken 1dtnlll)'· sot Figure 12.3.
369
r· !
I
J/l
Jl
ai!e:-j
sj
=
ill
'.II>.
ii
2x r
iii8
i ..
l! 5
370
.
1!
.l!:'.iltl
e
11
CD
3•
jil ..
j
l
Principles of Singapoft Business law
Chapter 12: Mistak•
NoN Esr FACTUM ( T HIS Is Nor M v D EED)
RECTIFICATION
12.53
12.56
12.54
12.55
In general, n person is bound by a co111rac1 he has signed even if he has
not read it or does not understand it (l'Estrm1gc v F Grn11cob Ltd ( 1934)).
However, in very exccplional circumstances, a con1 rac1ing party may be able
to avoid a contract on the ground that 1he signature o n the contraCI is "'not
his deed''. As a successful pica of 11011 est Jact11m, which renders a con1 rac1
void, has a d e.<iahilising etfec1 on contracts in general, this doctrine has
traditionally been applied verr restrictively.
A party invoking the doctrine of llOIJ i 'St .fac:tunr JUUSl prove that the docun1ent
he signed is riulically differ""' from the document he intended. 111e threshold
for n1eet ing this condition is extren1ely high. Jn 1J1e leading decision of
Smmdcrs v Ariglia 811ildi11g Society ( 1971), an elderly lady was deceh·cd by Lee
into signing a document purportedly to transfer her property to her nephew,
but which in fact tnnsferred the same to Lee. Lee subsequently mortgaged the
property to a building societ)' and defoultcd on the mortgage payments. 1lie
elderly lad)• resisted the building society's claim• to tl1c property by pk,.ding
11011 est fact um. 111e House of Lords held that the plea foiled. 111e contract wi1h
Lee was not fu nclamcntall)' different from what the lady intmdtd because her
intention was to use the 1>roperty ro raise fu nds for her nephew, and (despite
the erro r) the objective could still have been achieved had Lee been honest
and paid the "purchase price" over to tl1e nephew.
A second requ itement for tlie plea of nOIT est Jact1m1 to succeed is that the
part)' seeking to rely upon Lhe doctrine must not have been negligent 111is
will, for inshu1cc, require the part)' to show that he has taken all reasonobk
precautions to ensure that the document reflects his understanding. In
practice, this will mean that a person of full understanding o nd capacity
would rarely succeed in plending this doctrine. The Singapo"e Court of
Appeal in Mal1ido11 Nichi11r bte Mohd Ali v D11wood S11/ta11 Ka111aldi11 (2015),
however. has J1eld (at [122 1) that it is reasonable for lay peopl e to rely on
their solicitors in the context o f a con1plcx lransacti on, ond thtH doing so
would 110/ amounl to negligence o n their part. Where solicitors arc present at
the signing of a document, the Court llf Appeal held (at I 123))
rde1•ant
faclors in delct·mining whc1 hcr a 11011 est fnctwu plea would succeed include
"the nature or the transaction, the level of sophistication of the client, the
cxtenl of the solicitor's duty 10 explain the document, and lhe actual advice
rendered by the <olicitor:'
371
Where a wriuen agl'eement does not truly renec• the intelllion of the
co11trac1ing parties, the court has a discretion (in equity) to re;tify the
document so that ii truly reOecls the part ies' intention. It sho uld be noted
that the prior agreement need not be legally enforceable, so long as there
is a common intention between the contracting parties which is both dear
and unambiguous (see )osrely11e v Nissm ( I970)). Jn addition, the parties'
true intentio n musl be o ne thot is continuing right up to the tilne
the
written agreement. Where the mistake is uni/ntcml, the threshold conditions
for rectificatio11 are higher than those applicable to common mistakes.
Specifically, ii musl be shown Iha! the non-mistaken part)' has actual
kno wledge (including wilful shutting of o ne's eyes to the o bvious) of the
mistaken party's intentions, the non-mistaken party must have foiled to alert
the- m istaken pal'ty to the mistake, and the mistake must be one that, if
uncorrected. \¥oul<l bene fit the non· n1istaken parly or cause detrilnent to 1hc
mistaken party (see Sl1c11g
S1'pcrnra1·kct Ltd v Cari/la Pte Ltd (2011)).
or
CONCLUSION: Is THERE A D OCTRINE OF M ISTAKE TO B EGIN W1TH?
12.57
II m ay be appropriate, as a concludi11g remark, to consider the argument
made from time to time that there does not exist an independent doctrine
of mistake, and thal, in the final analysis, all the decisions falling under
this topic turned upon the ro11s/ructio11 of the temu of the contract (see,
eg, Slade, "The Myth of Mistake in the English Law of Contract" (1954) 70
lllw Quarterly Review 385: P S Atiyah, "Couturier 11 Hastie and 1hc Sale of
No n· Eicistent Goods" (1957} 73 l.nw Quarterly Review 340). It has also been
argued, for example, that alternative substantive doc1 rines such as offer and
acceptance (as o pposed to an independent doctrine of mistake) are the actual
basis for the court's decision. [t is true, indeed. th:it l'nistake ca.se.s are replete
\Vith re fe re nces to principles of offer and :icccptance. A prornincnt exan1pl1! is
1hc- House of Lords decision in Slrog1111 Pi11a11c:e, 1•here the majority based its
conclusion entirely on an ..offe r
acccpla.nce'' analysis without separate rrgard
for the effects of frnud. lt is also increasingly con11non for textbooks to discuss
mutual and unilater;il mist;ikes as p;irt and parcel of contr;ict formation. It
Is, however, clear that sole regard lo principles of conlracl formallon docs
nol adcquatdy resolve th• many problems in this s ubject, as the powerful
judg1ncnts in Sl10J_rzu1 Fiunuce de1nonstrntc. In Singapore, the
Court of Appeal's resolute decision to retain the equitable doctrine of mistake
in 1he Digi/11ndm111/ case indicates that the doctdne of mistake is not likely to
be displaced br ilr merged with o ther substantive pri nciples.
372
Principles of Singapote Business Law
Chapter 13
Misrepresentation
13.1-13.S
13.6
13.7
13.8
13.9
13.10- 13. 11
13. 12
13.13- 13. 14
13.15-13. 19
13.20- 13.21
13.22
13.23-13.24
13.25 - 13.28
Introduction
Operative Misrepresentation
Elements of Misrepresentation
Statement of Fact
( I) Puffs
(2) Opinions
(3) Intentions
(4) L1w
Representation by Conduct
(I) Express representations
(2) Implied representations
(3) Silence
13.47
13.48
(3) Lapse of time
(4) ' lliird party rights
Section 2(2) of the Misrepresentation Act
13.49
13.50
13.51
13.52- 13.53
( 1)
(2)
(3)
(4)
General
Types of misrepresentation
Where right to rescind is lost
Measure of damages
13.54-13.60
Exclusion of Liability
13.61-13.62
Conclusion
Ambiguity and Falsity
Materiality
lnduce1ncnl
Addressed to the Other Party
13.29
13.30- 13.33
Types of Misrepresentations
Introduction
Fraudulent Misrepresentation
13.34
13.35
13.36
13.37-13.38
13.39
( I) Neg)igence at common law
(2) Section 2( 1) of the Misrepresentation Act
(3) Measure of damages
(4) Burden of proof
Innocent Misrepresentotion
13.40-13.41
Representation as a Term
13.42-13.44
13.45
13.46
Rescission
General
(I) Restitution impossible
(2) Affirmation
Negligent Misrepresentat io n
374
Pri,,c1plts of Smg;iport Busintss Law
Chapter 13 : Misrtprt:Stnration
in both misrepresentation and broach, and s I of the Act makes tt cleor that
a person is not to be deprlvtd of the right to rtscind for misrepresentation
merely bccaU>r the represtntalion has
part
the contract. In
general, thcrt arc some broad >11111laru1cs between the liabilities and rtmcd1es
for misrepresentation and those for breach. For example, in each areo, the
innocent party generally has remedies of termination and damages. I lowcvcr.
ns one goes into the details, there arc significant differences between these
two areas of law.
INTRODUCTION
13.1
The aim of a bwineu is to sell a product or a service and, sometim<s, in a
bid to secure a sale, much mor• is said than should have been said. If an
untrue stat<ment is part of the contract, the mnoc•nt party has his rights
for broach of contrnct. But if the statement
not part of the contnct, the
innocent party may still have rights under the law of mhr<presentation.
13.2
The low of 1nisrcpresentation is found in the con1111on lnw, equity and
statute. O risilinll)'. at common law, there was liability for misrepresentation
only if the misrepresentation was fraudulent or formed part of 1hc contract.
Subsequently, aficr the llousc of Lord> dcchion in //ctlley Byrne & Co Ltd
v //cl/er & P11rtners Ltd ( 1964) (referred to al para 13.31), there was also.
poss1bly, liabili1y for negligent misrepresentation. Non contrnctu:>I statements
which were ntither fraudulent nor negligent did not givt riS4' to a claim
for damagts although the reprtsentee could seek, in oquity, roscission and,
possibl)'. an indemnity.
13.3
OPERATIVE M ISREPRESENTATION
Elements of Misrepresentation
t 3.6
A misrepresentation u a false statement of fact made by onc party to
another party which induced the other party to enter into the contract. The
statement mwt be one of • past or an cxmmg fact, not a commendatory
puff, an opinion, a .s-ta.te1nent of intention or a statement of );iw (stt
Figure 13. 1).
The UK Misrepresentation Act 1967 was made applicable 111 Singapore by
the Applie<111on of English Law Act (Cap 7A, t994 Rev Ed) amd reprinted
locally ns Cnp 390. 1994 Rev Ed. Under this Act, n rcprcsentec could claim
damages for 1>egligent misrepresentation in the same way ns he could claim
hllcl tht• rcprcsc11tatio11 been fraudulent (sec para t 3.35). Compllred to the
common law claim under the Hedley Hymc ca.c, this species of statutory
negligence is easier to mount as a cause
13.4
or
or action.
It should be mentioned thot the law of misrepresentation straddle; the
two broad areas of contract law and tort law. As such. in a situation of
misrepresentauon. the innocent party may h"'" rights undtr both contract
and tort . The concurrent existence of duties 1n contract and ton '"'as
confirmed b)' the Hous• of Lords in Hmd•rso11 v Mrrr<ll Sr11d1tntts Ltd
Statomont rnado during negotiations
!
[
Puff
,/
False
No legal effect
"
As n finol 11ll roductory remark, it may be observed that misrepresentation
sometimes overlaps with breach of cont ract. Indeed, where a representat ion
Is or become& part of the cont ract, the i11noccnt ptirty may hllve remedies
375
..
Represontee can sue rf lhore was:
No problem
• False rel)fesentation or fact
• Made by one contracting party to the
other
· Which induced lhe other to enter Into
tho contract
( 1995).
tJ.5
lJ
Term
Figure 13 .1 Classlllcatlon o r pre-contractual statements and elcmenu ol •n
opcrat lve mbreprescntatlon
376
Principles of Singapote Business law
Chaptet 13: Misrepr-esentation
Statement of Fact
if t he representor d id not hold that opinion or belief of the law, or if the
staten1ent c.arrirs an iln plicatio n of fnct which is untrue. \.Vhl•re the
(1) Puffs
13.7
ll is usual fo r salespersons to use glowing terms to d escribe their product,
such as "best value n1oney can buy': "excellent pro duce' or "very fost car':
In general, such commendatory expressions or puffs arc harm less and arc
regarded as m ere sales talk, to which the law anaches no legal liobility.
Ho,vever, as the statements get n1o re detailed or precise. they are n1ore
likely to be re presentatio ns, for example, going beyond saying a car is fast to
asserting that it has a lop speed of 200 kmh.
involves both fo.i and
law,
the tendenc)' of the coum is
to
regard it ns a
statement of fac t.
13.11
The House of Lords in Kleimvort Br11so11 v Glnsgow City Co1111cil (No 2)
( 1997) allowed a restitutionary claim for money paid under a mistake of
hnv. jetti.soning the traditio nal distinction between µ.ay1nents n1:ide under a
mistake of fac t aiid t hose made under a mistake of law. One can expect
that in t he near fu ture, the distinctio n may also be abandoned as regards
1nisreprcscntation.
(2) Opinions
13.8
In general. • .>tatcmcnt of opinion wh ich turns o ut to be u nfoun ded docs
not give rise to liability. Bm t here arc exceptions. First. a s t.ntemeJlt of
opinion can be a staten1ent o f fnct in that the representor impliedly stated
that he h eld the opinion. If he d id not hold the opinion o r could not, as a
reasonable ma.n having his knowled ge, honestly have held it. there would be
a rnisreprescntntion. The n1isrepresentation here would be o ne: concerning
his state o f m ind, and it ha> been said that t he state of a pcrs<in's m ind is
"as much a fact os the state of his digestion" (see Bowen LI in Edgmgton
v Fitz1P1aurice ( l 885)). Likewise, a staternent of another pers()n's opinion
involves an assertion that the latter holds 1hat opinion. Secondly, a statement
of opinion m<1y carry with it the Implication t hat the represemor had an
object ively re.osonable basis for his opinion, for example, that he h ad th e
handbook which contained t he informa tion.
Representation by Conduct
(1) Express representations
13.1 2
word. But expression can also be thro ugh a picture. a photograph. a drawing,
chart or any o ther visual med ia.
;1
(2) Implied representations
13.13
An express statcn'lent n'ltt)' also contain an in1pli.ed representation. For
example, it was argued in CaS$11 rfi Risparmio rfe/111 Rcpubb/ica di 51111 Mari110
SpA v llnrclays Bank I.Id (20 11 ) that a
that a linancial product
carried
"AAA" rating containcc.l an i1npliel1 representation that the product
wns of low risk. ·n,c test is whether a reasonable person in the p<>sition of
lhe reprcsenlec would have understood that an irnpJied
\YaS
being 1na<le.
13.14
Representation can also be through a person's conduct. For example, a person
who sits <lown in a restaurant and ordert\ a n1eal hn pliedly rcpre.)ents that he
has the abili[y to pay for the meal. Likewise, a nod o f the head may signify
agreement, just as a shake of the head may show disapproval. So long :is it is
intended to induce the other party to believe in a certain State of facts, the
ge£ture o r conduct can amount to a re presentation (see Wn/ie,.,. v Morgan
( 11161)). In the situat ions just
1he conduct is intended to convey a
cerlain ancssagc. So1nelil11es, the conduct n1ny br inlcndcd to conceal certain
fac ts. A very simple example is where a rruit seller deliberately sticks the
label on the part of the fr u it th:it is damaged. In principle, such conduct
(3) Intentions
13.9
A -stnte1nent of intentio n is an expression as 10 lhe future an d does not
involve any past or existing fact. J lowever, as with opinions.. if t.hc intention
was not so held , there would be a false statement of met. l ikewise also. a
person 'vho states his intention to do son'lething 1nay be irnpliedty asserling
that he hos reasonabk grounds for thin king that he has th e capacity to do it.
(4) Law
13.10
The lrnditiona l view is th:ll a staten1en1 ofhnv cannot be a n'lh•representation.
As "'•ith opinions and intentions, a stottn1cnt o f law can bra n1isreprrscnta1 ion
377
The most ob,•ious form of express representatio n is th e spoke n or wrinen
378
Ptu1ctplts of Smg;;iport Busintss Law
Ch.apter 13 . Misrtprf'.Sentait1on
would ;ilro amount to a representation. In the case of the fruit seller, the
implied representauon is that the fruit is undamaged.
Ambiguity and Falsity
13.20
bc amb1guou> and may bear two (or more)
meanings, one of which " true and the other(s) false. Whether such •
staten1t>nt by :i contracting party 11mounts to :i
drptnds
on 1wo thmg>. First, the representce must prove that he understood the
statement in the sense which Is 111 fact folsc. Second ly, die represenlor nm<t
have intended the stnlemcnl to be understood in the sense that is false:
he is not liable if he honestly
ii m the sense that ls true.
1s
so even if the sense in which the representce u nderstood the stnlemenl is
the one '"hich 1 on its true con:.truction, it ought to bear
Akerlriclnr v
(3) Silence
13.15
Sometimes, a statemcnt
Silence in 1tsel f is rarely sufficient to amount to a repre.enlation (sec Brondley
Co11s1ruoio11 Ptt lit/ v Alnrrn11 Design Pte Ltd (2018) at 128)): some acth·e
conduct is required. Under general contract law, one party does not have a
d uty to ,tisclosc 10 the o rher party material fac ts which the forme1· knows
1nuy influ('llCC the
decision w·helhcr or not co t"nter into 1he contract.
Thi> rule is su b1cc1 lo several exceptions.
·n,1;
De Mn re ( 1959)).
13.16
13.17
The fir>t i> where the silence makes whot has been ;aid o half-truth o r
on untruth. Fm example, to s;iy that a pop group currently comprises five
named ind1v1d ual> without going on to say that one of them will bc lea\'ing.
is a m1srcprcs.,ntouon (sce Spice Girls v Aprilia ll'urld Strv1u (2002)). While
contr>cllng party has no duty 10 make >latements, once he begins, he must
make full and frank disclosure.
Sccondl)'• whcrr a sto1cmc111 (which the rcprc;enior knows is false) is
made by the representee or by a third party to the rcpresentce while the
reprcmuor listens In silence. his reticence rnay amount 10 1oci1 confirma1ion
o f the truth of the st<Hcmenl (see Pi/more v Hood ( tA3A)). By keeping silent,
he Is Impliedly representing that the Sllltemcnl is true.
13.18
'!he law regard> a reprc>cnlation as
a continuing effect until the
contract I< concluded. For this reason. if a Matemcnt which though true
when made. to 1hr reprcsenlor's knowlrdgr. ceases 10 be true before the
contract is concluded, 1he rcprcsentor is rcquircd to inform the rcpre.<entce
of the change m circumstances. lhe repre!.<!ntor has a duty to ensure
1hat hi< repre<entation remalllS true up to the t1mc of 1hc con1ract (see. eg.
11'11/1 1• O'Flniragn11 ( 1936) and Spice Girls 1• Aprrlia \\'arid Scn•iu (2002)).
13.19
Finally, Ill certain contracts, the law imposes• duty of utmO•l good fai th.
'(he prinw cx<tmplc of this is thr insurance con1rac1, " 'here 1hc law
o n the proposed insured the duty 10 d isclose lo the h1'11rcr all moterial foci,<
that may inO.,cncc the insurer's decision whether or 1101 to i nsure. Such
11>e
non-disclosure entllles the insurer to avoid the contract of
ratlonnk for th i> is that of1cn the >pcclal fotts anJ rbk> ure k nown to the
Insured but not the ln>11rer.
379
13.21
It would appear from the treatment of commentators (see, eg, I Cortwright.
Misrepresentat10tt (2002) at para 4 18) that ambiguous statcmcnt> can
amount to fraudulent m1srcprcscntat1on but not negligent or mnoccn1
misrepresentation. The logicality of s11ch dichotomi• is not so ev1dtnl.
Tu.. rcprcsentor's intention 11 rclrvant for deternuning thc t)-pe of
misrepresenta\lon: fraudul•lll, ncghgent or mnocent. Whether or not th•rc
is falsity (as opposed to culpability) should be an ob;ective matter. for
cxcunple. whether a hand phone has n partlcular fraturc, ;uch a> voice·
operoted dialing, is an objc(tlvc nu1ncr.
Materiality
13.22
'there is doubt whether the IJw requires a misrepresentation to be moteriol
in the s<ns• that a reasonable mJn would have been influenced by 11 lo
cnrer into the contr.ct. h th<r•
if the reprc,ente• WU
induced by a misstatem<nt which a rcasonable man would han ignored'
Whit• th<rr arc som< iudicial >tatrm•nts which >'llpport • requirement
of materiality, the posnion 1s not $Cl1led. C.rtainly. a rcprcsente< who is
ind uced by an immatcnal 1msrcprtsenwion \\'ill ha\'e d1fficuhy prr>u•dmg
th.- court that he was so Induced. Rut it is anoth<r maner to dcny a
represenrec who was truly induced by the 1msreprescntJl1on. Commen1atOI'$
are divided on thiN issue. 1)·eitel, 71rr Lnw of Co11trnet (14th ed, 2015) at
para 9- 020 confidently asserts 1hat motcriulity is a requirement. 'l he lm1c is
dcbtltcable. For nn nllcrnativc vicwpoinl, see eg, Clillly 011 Co111mcts, Vol I
(32nd ed, 20 t5) at p.ir.1 7- 0·i t.
380
Ptu1ctplts of Smg;;iport Busintss Law
Ch.apter 13. Misrtprf'.Sentait1on
Inducement
13.23
13.24
In order
to be
at mu>t lnduu the reprcsentcc
to enttr into the contract. Stated another way. the rcprcsen1ce must h3\·e
relied on the representation. This requircn1cnt h: an obvious and logical one.
There arc •<veral ;ccnarios where the repn:;entec " not mduccd by the false
stntenlcn1. The fir5"t is where he w·as not e\'cn aware of the representation.
Secondly. Lhe rcprescntce may have been aware of the representation but
kn<'W il was 1111lruc or dad not believe it lo be true. Thi! third sitmuion is
that he simply wns not influenced by It. as where he would have entered
into the controct even if he had known the true facts. In all these situations,
there is no inducement and therefore no operative mbrcpresentation. The
misrepr<sentntion need not be the sole c;iuse th.11 in<luctd the rcpresentee
lo enter into the contract. It is suffici•nl that, in dtctding whether to enter
into lhe contract. he wa. matuially influenced b) the m1srcprr.enta11on. as
whero the representec was induced by a tmsrepresentotton as well as by his
belief (Stt Etlgingto11 v Frt:mmmu (1885). followrd by the
own
Singapore Court of Appeal in Pa11atro11 v Lu Clacow Let (2001)).
Sometimes, the representee has the opportunit)' to verify or ascertain the
11'\llh for himself. Generally. the fact that a reprcscntcc had the opportunity
to discover lhe truth but dad not use the opponunity dots not discntat le him
of relief (•cC fll'rlgmvc v H11rrl ( 1881)). Bui where it is ren.<tmable to expect
the rcprcscntce to avail himself of the opportunil)' lU discover the truth, the
lcgnl position is lc$S clear. In Panatro11 v J,ec Chcow /,re (2001). Yong CJ held
thJl once inducement is proved. it is no defence thal the reprcsenter failed
to take the >tcp; which a prudent man would have taken to verify the truth.
Pdt11llro11 WO> followed by the Court of Appeal in JfC 1• W1s/1mg Star (No 2)
(2005). whero 11 w:1< hrld th31 :1 reprcKntee who choose< "to •et carefully but
fatl•. through negligence or otherwise" to d1>eover the fraud. is nonetheless,
rcgorded •• having been induced (sec Box 13.1) But the Rtdgrtwc pnnople
1s now open to doubt. In Pe.Jmy /11termark Ltd 1• ANZ 8n11ki11g Gro11p Ltd
(2006). the UK Court of Appeal accepted the notion that whore "rcprcscntce
$1gns n written contract anconsjstent with. and s11#1stquc111 to·, earlier oral
he mny have been induced not by the oral rcprcm1tntion but
by "his 01vn n»umption" th:il the subject mnttcr of the contn\Cl cQrrcspondcd
to the dcscl'l11! ion that he hnd previously been t:lvcn. 1l1is a;pect of Pcckny
w.s cited. It would seem with approval. by the Sl11g.1porc Co11r1 <>f App••I in
Oric111 Centre /11v1•st111t/11$ Uil v Socictt Ge11trnlc (2007).
381
Mi1reprcsentlltion 1nd lht reprtientte's own inq uiry
It Is quite often asserted by the representor that the representee was not induced
by the representation but mher by has own inquloy. In /TC v Wishing Slot (No 2)
(2005), ITC was a developer of the Blopohs, a large research complex, and was
assisted by JCPL, its comultant. The tender for
works for the complex was
awarded to WSL. Three months Inter, the contract was terminated for inter olio,
mlsreprcseniation as to the >atlsfactlon of the tender evaluation criteria. The trl31
court found that although there had bttn misrepresentation, ITC had relied not
upon the miirepresenlotlon but on !CPL'> own evaluation.
The Court of Appeal oltomd the
and held that JTC was induced by
the ml!representation even though it partly relied on ICPL's evaluation and expertise.
Woo Bih Li J was of the "'ew th•t • 1>4'rson who has made a lalse representation
cannot escap<: •U consequences 1ust because the innocent party has made hos
own lnquloy or due dlhgence but la1led, whether due to negligence or othe<w1se,
to discover the lr.iud So long as the innocent party does not
ol the
m1srep<esentation
1
misreprt'.sentahon rt-matns operattve:.
The Court ol App<:al's stAnce reonlcmes the poMtoon taken on earlier English and
Singapore caseJ. From the policy s1Andpo1nt. the position makes sense - the
represent cc should not be pc'nallsed tor choosing to make an inquioy; neither should
a contracting party be
to male false statements. It should be noted,
however, that the reprtsentations In Wishing Sror were
Where the
is a negligent one, the case
less compelling. After all, In
principle, contributory negligence Is a partial defence lo a negligence claim.
Addressed to the Oth er Party
13.25
Generally speaking, it is the direct addres>tt or recipient of a representation
who mar bnng an acllon for ml\fepresrntation. It should be noted !hat
a
recipient can bc a person who u a member of a cla$$ of per>ons
to whom th• ropre,,.,ntataon u addrei..sed. such as through • media
announcement. There arc s1tuataons. how·ever, \\'here one \vho is not ii d1rttl
recipienl may have recoursr.
13.26
The first is where the rcpre;onuuon is mode to the reprrsentce's nut horl1td
ngcnt. Here, thrre nre 1\V(> po;s1blc scenarios. In the first scenna·io, the
rec ipient. to the rcprescntor's kno"•lcdgc, Is onl)' an agent for passing 011
the representation 10 his polncapnl. In the second. lhe represenior Intend•
th•tt both the ngcnl and principal will be lnOucnccd by the rcprc;cntnt ion.
382
Ch•picr 13: Misitpt<SMtallon
as m lh< case of panners of a 6m1. In th< 6m, 1he prmc1pal 1s the
lifl".Miji
reprt"'mee, while m th< latt<r, bo1h 1ht principal and 1he agen1 are
rcprc1emcc$.
13.27
13.28
The second >1t11a1ion is where, even 1ho11gh there 1s no agency between
1hc dlrcc1 rcc1pien1 and the indirect recipienl, the rcpresenlor imended
o r rcasollllbly expected the represen1a1io n to be po»cd on to 1he indirecl
recipient. 1hus, where A by a 111isreprcsenlMion Induces B 10 b uy an item
n11d R later induces C by a similar misreprescrnatlo n 10 buy ii fro m B, C
could rely o n Ihe misrepresentation as againsl A if A knew 1hat B inlended
10 resell and was likely to repeal 1he m isrepresen1a1 ion (see Gross v Lewis
11illmn11 ( 197())).
h should be nolcd lhat an indirl'Ct misrepresen1at1on arise• either lhrough
ag<n<)' or through th< mtcntion or knowltdg< of the r<prcscn1or. In
the past two decades. there has been, in 1he conltxt of guarantees and
mortgage. by spou><>. substantial development on the issue of lhe extenl
of a bank'i liability for m isrepresenta1ion (and oth<r misconduct) of the
principal debtor. In essence, the position is that the bank ,. affecled by lhe
principal debt ors m isrepresenlalion 10 the gunrantOr if eilher I he principal
debtor may be regarded as the bank's agen1 or 1he bunk ht1d cons1ructive
nol icc of the m isrepresenlution. For 1he de1ailed rule. M to when a bank
would be put on inquiry and 1hc reasonable >leps It would 1hen hnve 10
lake, see 1hc I lo use of Lords decision in /loyal 8a11k of Srotl1111rl plr ,, Elridge
(No 2) (2002) (<ec also Chapter 14 al par3 14.45 o nward>).
T YPES OF M ISREPRESENTATION
Introduction
13.29
!
Statement made:
knowing it i.s untrue
nol believing it 10 be uue
not caring
If it is true or not
As mentioned .lbo•-c. it is now clear thot 1hcr< can !><' lhrec types of
misrepresentation and lhat they are, on a scale of din11n1>hing culpab1hty,
fraudulent n1breprcsentat1on. negligent n11sreprcs("nlntion and innocent
misreprcscnlalion. Broadly speaking, lhe remcdic• or re>ci»Wn "nd damages
(indemnity. 111 the case of innocenl m lsrcprescnlal ion) arc ovailable for
all lhrec. As we sl111il see. however, !here arc difference. in 1he rcspeclive
k gal posillo ns insofar as the reco ver)' o r domagc. is concerned (sec
l' igu1e 13.2).
383
* 1NM·1*
'
Statomool made·
• wllh no reasonable
ground to believe it
2(1) MA)
Is true r
Mi.1,1.ii I.IF
Statemenl made
· honestly, end
• with reason to
believe It ls true
!
Remedy: Innocent party may rescind or affirm con11ac1
!
Coun may order damages IMtead of
r<sclssion (s 2(2) MA)
+
+
Damages
lrldemn1ty
Figure 13.2 Typu of mlsrepruentations and remedies
fRAUOULENT M ISREPRESENTATION
tJ.JO
Al common law, fra ud is defined qu11c narro1,.ly, as a charge of fr•ud "1;
such a lerrible thing a< 10 bring •g•inst a man 1hat 11 cannot !><' mainta1ntd
unless it is ;hown 1h31 he had a wicked nnnd" (see Lord Eshrr in u uci•rc
v Go11/d (1893) al p 498). In l>erry v Pttk (1889), the House of Lord> held
1h:u a fraudulent statement 1s on< made knowmgly.
bchef of ns truth
(or withou1 "gtnuint b<'hef" of 1ls trulh. accordmg 10 St""'" Chong JA in
Broadlty Comtr11rtio11 Pte Ltd v Alticrim Dt>ig11 Ptc Ltd (2018) al (261). or
recklessly - not caring whether 11 as true or false. A person who dehbera1ely
shuts his eyes lo the focts o r puq>o>dy ab>lain> fro m invrsilgating 1hc facu
doe> no1 have an ho nc;t belier In its truth. Where ther e has been a fraudulent
nlisrcpresenlation, lhe rcprt$Clltee 1nny recover dan'lt11gcs in an action under
1h.- torl of deceit. Da11111ses arc awarded to compens ate the rcprcscntcc fo r
all the losses which ctu1 lll'Opcrlr be said to have been caused by his reliance
o n 1he fraudulent misreprc;c11rn11011 (•s con1ras1ed with 1he contrac1 mca•ure
)84
Chap"r 13; M1srt prestntation
Pnnciplts of Singapore Busint:ss Law
of expectation loss). (Sec the House of Lords decision in Smitlt New Court
Sernrities '' Si-rimg,·or Vickers (Asset /\1m1ngcmt11t) ( 1997)). Further, in such
So for as negligent rnisrepresentation is concerned, the impor•ance o( these
rcfrncments i> largely eclipsed by thr Misrrprcsenlotion Act.
an action, con1rib111ori• negligence is 1101 a de<cnce (see Standard Clrartered
Bank " Pakistan Nntionnl SJ11pp111g (Na 2) (2002)).
13.31
The moli\'e of 1he represcn1or is arrclc\'anl. II is nol ncccssar)' tha1 he had
a bad molive (such as 10 make • sales comnussron for himself) or inttndcd
10 cause loss 10 the reprcscntcc; 1t suffic°' that the false statrmcnt was
made knowingly wnh 1he tnten11on that the rcprescntcc should act upon ii
(sec Standard Cl1nrttred Bank v Pt.Aistar1 National SJ11ppmg (No 2) (2002)).
It is also immaterial that the representor thought the statement irrck,=t or
(2) Sect ion 2(1) o f t he Misrepresentation Act
13.35
Whtre a perM>n has entered into a contract after a misrepresentation has
b«n madr to him by another party ther<to and as a rrsult thrrcof hr
suffered loss. then. 1f th< person making the rnisrepresentallon would
be liable 10 damages in respect thereof had the misreprcsenta1ion been
madr fraudukntly. that person shall br so liable notwithstanding tha1
the rnisrepresent•t1on was not made fraudulently, unless he pro'·°' tha1
he had reasonable ground 10 believe and did believe up to the time 1h<
contract wa. made that thr facts represented were trur.
unin1portant.
13.32
13.33
Where 1he responsibility for a statement is shared between a principal and
an agenl, or between 1wo agenl•. the po>1tion is more complex. If an agent
knowingly makes a false Sl>l<n><nl w11hin the scope of his authority, 1he
principal is linblc for fraud ulent misrepresentation; likewise, if an agon1
knowingly makes n false •lnlcment to anolher agenl intending thal ngen1 10
pas;; the slatement on to o third )lar ty.
If the agenl makes o >lalemenl which he honestl)' believes is true but which
1he principal knows Is untrue, 1hen the posilion depends on the culpability
of the principal. If the principal was aware that the s1a1cnwn1 will be or
had been made and did not intervene, the principal Is liable for fraudulent
misrepresentation. If he wns not awn re 1ha1 1he s1a1emen1 will be or had
been made, he is not liable (sec
v Strain (1952)).
'I he uninitiated reader may find the abo"e paragraph al best awkward and al
wor.1 incomprehensible. Adopting what has been termed a "fiC11on of fra ud",
lh<" provision firs! says indrrecdy 1ho1 a non-fraudulent misrepresen1ation
car ries the same liability a> a fraudulent misrepresenlalion. It then gives 1hc
qut11ifica1ion th,11 the reprcscntor will not be liable if he proves 1ha1 he had
reasonable grounds to believe that his statenlent "''as true. In effect. 'vhal
th<• sect ion docs is lo provide that a negligent misrepresentation (t hat is.
one where the represcntor <loes nol have reasonable grounds 10 believe his
slatcment is Irue) allroels 1hc same liability as a fraudulenl misrepresentat ion.
(3) Measure of da mages
13.36
Negligent Misrepresentation
(1) Negligen ce at co mm on law
13.34
A negligent misrepresentation is one which is made carclcs.sly or wi1hou1
reasonoble grounds for believing ii to be trur. Pnor 10 and apart from
the Misrepre>entation Act. a mi>rcpre;cntation would riot be oonsidercd
neglrgen1 unle<s 1he rcpresentor owed • du1y of enc 10 1hc represent..,. A
"special reb1ionship" must h•"e existed bttwccn the parties
such
duty of care can arl;c (sec llctllcy B)'rllC 6' Co Ltd '' Htllcr 6' Pnrt11m Ltd
(1964)). The lnw on neglrgent mlisu1erncnts was further developed and
qu•lified by subsequent cases (see. grner•ll)'. Chapter 6. para 6.28 onwards).
38S
Scclion 2(1) of lhe Misrepr.sentotion Act provides as follows:
There is much debate as to lhe correct basis for measuring damoges for
neglige111 m1srcprescntalion. One ' 'iew is 1hat 1he contract measure
10 put
the- reprc>cn1ee in10 1hc posilion he would ha\'e been had the representalion
been true - >hould apply. Another view is thal the tort measure i> the
approprrate one. In 1or1, 1he claimant as to be pul in a posiuon he would
have been if Lhe torl (Lhe misrrpresenlalion) had not been commiued. If 1hc
IOrt me3>urr rs tl1e correct one, there is a further complication: should the
dece11 (fraud) rnea<urc or 1hc negligence measure be applred! In cases of
fra ud. lo.ses may be r<coverable even though they were not of a fortsee able
lcind; this o; not the casr for negligence. There are no ea>y answers to this
probl<m. For further d1scuss1on of 1hese issues, sec A Phang, Cl1a/11re, Fifoot
6' J'11rmsto11's Lnw of Corrtrnct (2nd ed, 1998) at pp 488-489 and Tr<ilcl 1l1t
Lt1w of Co111r11ct ( Mth ed. 20 IS) at paras 9-071 to 9-072. It was said that
386
Chapter 13: Misrepresentation
the words of s 2(1), Misrepresentation Act do not necessarily compel the
conclusion that the liability in d:unagcs for nrgHgcnt n1isreprcsen tation under
se,tion 2(1) is to be the same as that for fraud (see Cnmr di Rispnrmio de/la
Repubblicn di Snn Mnrino SpA v Bnrclnys Bnnk Ltd (20t I) at 1223)), and in
RBC Properties Pte Lid v Def" F14rniture Pie Lid (20 15), the Singapore Court
of Appeal suggested that the negligence measure is the appropriate one.
Principles of Singapotc Business Law
REPRESENTATION AS A TERM
13.40
A representation is a statement made before or at the time of the contract,
wh ich induced the representee to enter into the contract. It is conceivable,
perhaps even likely, tJ1at such a statement could be a term of the contract.
Titerc are several guidelines for detennining whether a pre·contractual
slatement is a term. For one, the statement is unlikely to be a term if the
representor asks the representee to verify its truth (see F:cny v Godfrey (1947)).
Another consideration is the relative abilities of the parties: if the rcprcscntcc
is in a better position. fo r instance through special knowledge or experience,
t.o .ascertain the truth, the representation is unlikely to be a ten11 (see Oscar
Clress Ltd v Williams ( 1957)). Finally, the importance of the statement is
relevant. If the statement is so important that the rep1:esentee would not have
entered into the contract had the staternent not been n1ade, the staten1ent is
likely to be a term of the c-0ntracl (sec Bm111er111n11 v Wlrite ( 1861)).
13.41
A representation n1aY> however, be precluded fron1 being a tern1 of contract
by the parol evidence rule (see Chapter I 0, paras I 0.6 onwards). The ruk
(4) Burden of proof
13.37
13.38
At con1n1on la\v, a rcprcscntcc \.\ ho alleges fraudulent misre-prcsentat ion
bears the bu rden of proving fra ud and the onus is a heavy one. Upon
reading s 2( 1), it is clear that for negligent misrepresentation, the burden
is reversed. Once the reprcscntce proves that the
was false. the
burden shifts to the representor to prove that he had reasonable grounds
to believe that the staten1ent 'vas true. In effect. the representor has to
show that his lnisrrprescntation \Vas not ncg1igcntly n1ade. Jn this respect,
negligent misrepresentation is a more favourable option for the representee
than fraudulent n1isreprescntation.
1
Although the use of the words "reasonable grounds" may give rise lo the
argu1ncnt that negligent n1isrepresentation, like negligent n1isstatelnent at
co1nn1on la,v, requires thc.· rcpresentcc to establish a duty of care and a
special relationship. it is clear from the case judgments that this is not so
(see Hownrd Mt1ri11c & Dredging v Ogrle11 & Sons (f:xcnvntions) ( t 978)
and Ng 8U11y Hock v 'fon Keng lirlnl (1997)). On the contrary, it is the
representor's responsibility to show that he was not "negligent''. Whether a
reprcsentee>s claitn for
for negligent n1isrepresentation in principle
should be reduced by the reprcscntee's contributory negligence is more
debateable (see C/1illy 011 Contrncts, Vol I (32nd ed, 2015) al para 7- 071).
basically says that where a contracl is in writing, eimimic (including oral)
evidence cannot be used to add to, vary or contradict the tern1s of the \\l"ritten
agree111cnt. An exception to this is the collateral contrac-t. The argulncnt
here is that there are two agreements: the main (written) agreement and the
co1latcral ora1 contract. A representation 1nay
to a collateral contract
upon which the rcprescntrc n1ay bring an action.
RESCISSION
General
13.42
An operative misrepresentation makes the contract voidable al the option of
the representee. 111e representee is entitled to rescind the contract. that is,
to tlcrn1inate it ab initio, that is, fnnn the beginning, as if the contract never
existed. In contrast, where a conln>ct is rescinded for a breacl1 of contract,
the contract is terminated as regards the fut11re; while the parties are released
fm:m obligations that have not fallen due, they are
liable for obligalions
wh ich had accrued before the repud iation.
13.43
The right to rescind for a nlisrepresentation is one which existed prior to the
Misrepresentation Act. Al common law, a representce had a right to rescind
Innocent M isrepresentation
t3.39
The least culpable type of misrepresentation is innocent misrepresentation.
Here, the false statcn1enl is nlade honestly and \vith care. 'J11e co1nn1on la\.\'
provided no remedies for nn innoccnl rnisreprescn1a1ion but, in equity, 1hc
representee is entitled to rescission and. possibly, an indemnity. The lauer
re1nedy allow:s the representec to be indcrnnified against all obligat ions
necessarily created by the cont ract (see Whi1ti11gto11 v Seal-1-/riyne (1900);
RBC Prope1·tic.< Pie Ltd v Defu Furniture Pie Ltd (20 15)).
387
388
Ptu1ctplts of Smg;;iport Busintss Law
Ch.apter 13 . Misrtprf'.Sentait1on
for (r;iudulcnt misrepresentation '"hile. 1n equny. rt"sc1.ss1on \\'115 a\l;ulablt for
i11noccn1 m1srepre><ntation and, prcsumabl)'. negligent mi>rep re><ntalion.
With > 2( I) or the t\Cl, it is now cenain that
1s a\-i1lablc for
neghgcnl misrepresentation. However, with regard to negligent and innocent
misrepresentation, the right to rescind is sub1cc1 to the court's discretion to
award damages in lieu of rescission under> 2(2) (sec para 13.49).
13.44
If, subsequent 10 the dl