Case
Offer
Gay Choon Ing v Loh Sze Terence
Peter (2009),
Carlill v Carbolic Smoke Ball Co
[1893] 1 QB 256
Legal Principles/ Ratio Decidendi
An offer is a willingness to contract on specified terms (clear,
complete, and certain), made with the intention that it is to
become legally binding as soon as it is accepted
Advertisement can be a unilateral offer to all the world
Harvey v Facey [1893]
Request for Info =/= Offer
Pattridge v Crittenden [1968] 1 WLR
1204
Chwee Kin Keong & Others v
Digilandmall.com Pte Ltd (2004)
Advertisements generally considered an invitation to treat.
Pharmaceutical Society of Great
Britain v. Boots Cash Chemists Ltd
[1953] 1 All ER 482
Warlow v Harrison (1895)
Display of goods with a ticket price is an invitation to treat and
not an offer to sell (Also in Fisher v Bell [1961] 1 QB 394)
Online advertisements are generally invitation to treat
Auction w/o reserve will be an offer (EXCEPTION)
Harvela Investment Ltd v Royal Trust Invitation to tender was an offer not ITT (EXCEPTION)
Co of Canada (1986)
Byrne v Van Tienhoven [1880]
Revocation of offer must be communicated to offeree before
acceptance
Key Facts
Case
Errington v Errington and Woods
[1952] 1 All ER 149
Legal Principles/ Ratio Decidendi
Revocation of offer not allowed after performance has begun
Dickinson v Dodds[1876] 2 ChD 463
Overseas Union insurance Ltd v
Turegum Insurance Co (2001)
Routledge v Grant (1828)
Revocation may be conveyed by a reasonably reliable 3rd party.
Revocation may not be explicit
Mountford v Scott (1975)
Hyde v Wrench (1840)
Stevenson v McLean [1880] 5 QBD
346
No legal obligation to keep offer open even if promised to do so
If consideration provided to keep offer open, legally required to
keep offer open during period (EXCEPTION)
Counter offer rejects initial offer and stands as a new offer
Request for Info =/= Rejection of Offer
Key Facts
Case
Legal Principles/ Ratio Decidendi
Key Facts
Panwell Pte Ltd & Anor v Indian Bank If lapsed offer continues to govern relationship, offer still valid
(2002)
and can be accepted (EXCEPTION)
Ramsgate Victoria Hotal Co v
Montefiore [1866]
Offer can become invalid due to a lapse of reasonable time
(EXCEPTION)
Financing Ltd v Stimson (1962)
Offer may be subjected to conditions. Failure of condition will
make offer invalid
Bradbury v Morgan [1862] 1 H&C
249
Offer may not be terminated upon death if no notice and is not
personal service (EXCEPTION)
Acceptance
Entores v Miles (1955)
e [1984] 1 All ER 504
R v Clarke (1927)
Gibbons v Proctor [1891] 64 LT 594
Tinn v Hoffmann
Felthouse v Bindley [1862] 142 ER
1037
General Receipt Rule- Acceptance
communicated to the offeror
must
be
‘Mirror image rule’: Parties never agreed to the aSprecise and
necessary terms of the contract so there was no contract.
Even where no liability arises through contract, court can still
reverse unjust enrichment
Cannot accept an offer that they have no knowledge of
Generally, person cannot accept an offer which he has no
knowledge of, but courts are prepared to infer claimant’s
knowledge for meritorious claims. (EXCEPTION)
No contract if cross-offer
Silence does not amount to acceptance
- Uncle wanted to buy horse from nephew and wrote “If
I hear no more about him, I consider the horse mine”
- Nephew intended to sell horse to uncle but his
auctioneer accidentally sold it away
- Since there was no communication, contract was not
binding
Case
Midlink Development v The
Stansfield Group
Legal Principles/ Ratio Decidendi
If agreed by both parties in contract, silence can be acceptance
(EXCEPTION)
Key Facts
Brogden v. Metropolitan Railway Co
[1877] 2 app Cas 666
Acceptance can be conveyed by conduct
Entores Ltd v Miles Far East
Corporation (1955)
For instantaneous communication, contract is only effective
when and where received acceptance is received.
- When B returned the amended contractual document
which amounted to a counter-offer, it was regarded as
accepted when MRC ordered coal or when B supplied
Acceptance only effective when office re-opened.
Telex messages sent outside working hours not considered
instantaneous.
Carlill v Carbolic Smokeball Co (1893) Waiver of communication – Offeror dispensed the requirement
of communication of acceptance, usually in unilateral contracts
(EXCEPTION)
Adams v Lindsell (1818)
Postal Acceptance Rule – Acceptance takes place at the time the
letter is posted, provided it was stamped and addressed correctly
& when postal acceptance is expressly or impliedly authorized
Hyde v Wrench [1840] 3 Bea 334
Previous offer is invalid once it is rejected by putting up a
counter-offer
Butler Machine Tool Co v Ex-Cell-O
Corporation Ltd (1979)
Acceptance must be final and unqualified, no battle of
the forms.
- Endless exchange without forming a proper contract
SECTION 5. (1) ETA
SECTION 5. (2) & 3 ETA
SECTION 11 ETA
SECTION 12 ETA
SECTION 14 ETA
Rules of the formation of contract applies to electronic
means of transaction
SECTION 15 ETA
A proposal to conclude a contract electronically that is
made generally accessible to multiple recipients is to be
considered as ITT UNLESS intention to be legally bound
clearly indicated in case of acceptance
Contract is still valid even automated message systems is
used and no natural person reviewed
- W offered estate for £1000; H counter-offered with
£950; W rejected H’s offer; H subsequently offered
£1000, but W refused to sell
- W not bound to sell on the price of previous offer.
Case
Legal Principles/ Ratio Decidendi
SECTION 16. (1) ETA
If natural person made an input error in an exchange with
a AMS, he/she has the right to withdraw that portion of
the electronic communication. Must:
1. Notify the party of the error ASAP.
2. Have not used or received any material benefit or
value from the goods or services
Time of dispatch of electronic communication:
a. When it leaves an info system under control of the
originator
b. If have not left the info system of the originator, it is
when the electronic communication is received
Time of receipt of email etc. is when it becomes available of
being retrieved by the addressee (available and readable to
addressee)
SECTION 13. (1) – PAR ETA (NONINSTANTANEOUS)
SECITION 13. (2) – GRR ETA
(INSTANTANEOUS)
SECTION 13. (3) – GRR ETA
(INSTANTANEOUS)
When not designated to actual addressee, it is deemed as
received when it is capable of being retrieved by actual
addressee and actual addressee is aware of it
SECTION 13. (4) – GRR ETA
(INSTANTANEOUS)
Presumed to be retrieved when it reaches the intended
electronic address
SECTION 13. (5) GRR ETA
(INSTANTANEOUS&NONINSTANTANEOUS)
E-communication is dispatched at the place of business and
received at the place of business, not in personal space
Key Facts
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Consideration
[1915] AC 847
Legal Principles/ Ratio Decidendi
Consideration is something that has value in the eyes of the law
and given in exchange for a promise
Chappell & Co Ltd v Nestle Co Ltd
(1960)
Benefit-Detriment Analysis – Benefit conferred pr a detriment
suffered to constitute consideration
Combe v Combe [1951] 2 KB 215
Exchange - Consideration must be requested by promisor.
Re McArcle, Decd
Pao On v Lau Yiu Long [1980] AC
614
Key Facts
-
- Plaintiff’s ex-husband had promised to pay her
annual maintenance of 100 pounds after their
divorce
- In reliance of the promise, she refrained from
applying to the court for maintenance
- Benefit to husband is that he does not go to court
- However the husband did not request for this but
wife went ahead and refrained on her own
- Therefore there is no consideration as it was not
requested by the husband who is the promisor
Exchange - Past Consideration is no consideration.
- Mother carried out renovation works to house. After
she was done, she got her kids to sign a document
asking them to pay her back. Kids refused and were
sued
- Performance was done before she asked for
payment. Consideration (renovations) was in the past.
Exchange - Past consideration can be valid when: (EXCEPTION)
- P & L got into a share swap deal
(1) the act is done at the promisors’ request
- P agreed not to sell 60% of shares for at least one year
(2) Clearly understood or implied between parties that the and that L would buy the shares at $2.50
promise would be rewarded for the performance of the - P realized they were losing out if share prices rose
- L gave indemnity but later refused to pay
act
(3) Actual promise made, if made before the promisee
provided consideration, must be capable of being
enforced
Mere promise of performing duty owed to a 3rd party is good
consideration
Case
Tweddle v Atkinson [1861] 121 ER
762
Legal Principles/ Ratio Decidendi
Exchange - Consideration must move from the promisee
- Only the one furnishing the consideration (promisee) can
enforce a promise.
Chappell & Co Ltd v Nestle Co Ltd
[1960] AC 87, [1959] 2 All ER 701
Nominal Value - Nominal consideration can be sufficient
consideration, as long as parties freely consent to it
Callisher v Bischoffsheim (1870)
Value: Forbearance to Sue – When a party has a claim against
another, them agreeing not to enforce the claim for a promise
can be good consideration
Wade v Simeon (1846)
Value: Forbearance to Sue (INVALID) - invalid claims are not
good
consideration
Glassbrook Brothers v Glamorgan
County Council [1925] AC 270
Scotson v Pegg (1861)
Hartley v Ponsonby (1857)
Key Facts
- Fathers of the impending bride and groom agreed in
writing to pay money to the groom.
- Bride’s father, Guy, died before paying, and his
executors were sued by Tweddle (groom).
- Claim failed as he had himself not given consideration
for the agreement. (Also failed under rule of privity)
- Nestle wrappers were held to be part of the
consideration, even though they were thrown away
when received
-
- Shows that a promise not to enforce an invalid
claim and knew it was invalid at the time of the
promise is no consideration
Value: Exceeding public duty – When an act or conduct exceeds - During a strike a manager asked for additional police
the requirement of the legal duty, it may constitute good
protection
consideration
- Police stationed more officers on the agreement that
extra would be paid to cover the expenses
- Manager refused to pay extra afterwards
- For anything more, charging extra despite it being a legal
duty Is sufficient consideration
rd
Value: Existing Contractual Duty Owed to 3 Party – Existing
contractual duty owed to third party constitutes good
consideration
Value: Going beyond existing contractual duty owed to
promisor – Constitutes good consideration
Case
Williams v Roffey Bros & Nicholls
(Contractors) Ltd [1991] 1 QB 1
Court of Appeal decision
Legal Principles/ Ratio Decidendi
Value: Practical benefit or detriment considered valid
consideration (as opposed to legal benefit or detriment)
(a) Made sure Williams continued his work
(b) Avoided payment under a damage clause if Williams
was late
(c) Avoided expense of finding another contractor to
perform the job
Key Facts
- Roffey sub-contracted carpentry work to Williams for
the refurbishment of a block of flats
- After the work begun, Williams underestimated cost
and was in financial difficulties
- Roffey agreed to pay Wiliams extra per flat
- However, reneged on the promise after Williams
completed a few more flats
- Court held that Williams entitled to payment since
Roffey had gained a practical benefit (will not be
late on deadline and will receive his payment from
the developer on time)
Whit v Bluett [1853]
INSUFFICIENT Value: Intangibles such as love and affection
and moral obligations are not good conisderation
- Father who was wearied by his son’s frequent
complaint that he had distributed his assets agreed
to release son from his debt under the obligation
that the son would stop complaining
- Court held that the father was not bound by his
promise as the son was doing what he was obliged
to do morally
Ward v. Byham [1956] 1 WLR 496
INSUFFICIENT Value: Intangibles can be sufficient consideration
(EXCEPTION)
- Mother’s promise to keep her illegitimate child “well
looked after and happy” in return for money was good
consideration
Stilk v Myrick [1809] EWHC KB J58
Valid consideration when performance is for more than
pre-existing legal duty by keeping child ‘happy’
INSUFFICIENT Value: Existing Contractual Duty – promisor
derives no benefit and promisee suffers no detriment for doing
what he is already bound to do
Foakes v Beer [1883-4] LR 9 App Cas
605
House of Lords decision
INSUFFICIENT Value: In return for promise for less – Part
payment of existing debt at the deadline is not good
consideration
- 2 out of 11 sailors deserted a ship
- Captain promised to pay remaining crew extra money if
they sailed the ship back, but later refused to pay
- Sailors already bound by contract to sail back and
promising to sail back was not good consideration
- Foakes owed Beer sum of money. Beer agreed that she
would not take any action against Foakes for amount owed if
he signed an agreement to pay with specific conditions
- Foakes with his solicitor drew up an agreement for Beer to
waive any interest to which Beer signed.
- Foakes paid principal but not interest and Beer sued.
- Court affirmed to Pinnels case.
Case
Hughes v Metropolitan Railway Co
(1877)
Central London Property Trust Ltd v
High Trees House Ltd (1947)
The Post Chaser (1982)
Combe v Combe [1951] 2 KB 215
Legal Principles/ Ratio Decidendi
Promissory Estoppel – Promise must be clear and unequivocal
- A promise does not have to be express but can be implied by
words or conduct
- Must be intended to affect the future conduct of the parties’
relationship
Promissory Estoppel – Promisee must have acted on reliance of
the promise
Key Facts
-
-
Promissory Estoppel – It would be inequitable to go back on the - In this case, not inequitable
promise
- Where a promisor makes a promise upon which the promisee
relies and suffers a detriment as a result, these facts would
render it inequitable to allow the promisor to recede on his word
Promissory estoppel can only be used as a shield not a sword to
enforce husband’s promise.
- Mr Combe promised Mrs Combe that he would pay her
an annual maintenance.
- Their marriage eventually fell apart and they were
divorced.
- Mr Combe refused to pay any of the maintenance he
had promised.
Case
Legal Principles/ Ratio Decidendi
Key Facts
Balfour v Balfour [1919]
Intent to Create Legal Relations: Social and Domestic
Agreements
There is a presumption that the parties do not intend the
agreement to be legally binding
- Wife sued husband for failing to pay 30 pounds
monthly while he was overseas
- Court held that promise depended on each other’s
good faith for the performance of promises
- Couple were not estranged, therefore no intent to
create legal relations
Merrit v Merrit [1970]
iCLR: Social and Domestic Agreements
The presumption can be rebutted by clear evidence of the
parties’ intent to create legal relations (EXCEPTION)
- Husband who deserted wife agreed to pay monthly
maintenance and to transfer house to her when she
fully repaid the outstanding mortgage and other
expenses relating to the house
- Written agreement and husband signed it
- Couple was already on bad terms therefore they
were clearly making a serious bargain
Rose & Frank Co v J R Crompton &
Bros Ltd (1925)
ICLR: Business Agreements – Honour Clauses that expressly state not to create ICLR
Kleinwort Benson Ltd v Malaysian
Mining Corporation Bhd (1989(
ICLR: Letters of Comfort – Document that provides assurance
that obligation will be met
- Depends on the intention as evidenced by the surrounding
circumstances and the text of the letter
-
-
Case
Legal Principles/ Ratio Decidendi
Key Facts
-
Terms
Terms V Misrepresentation
Ecay v Godfrey (1947)
Request to verify – There is an opportunity to verify if it is a term - Misrepresentation in this case
Schawel v Reade
Request to verify – There is an opportunity to verify if it is a term - Breach of term in this case
Bannerman v White (1861)
Importance of statement – if statement was so important that
the party would not have contracted without it, it is a term
Routledge v McKay (1954)
Timing of statements – If statement made closer to the contract, - Not a term
it is likelier to be a term
- Breach of term
Case
J Evans & Son Ltd v Andrea
Merzario Ltd (1976)
Legal Principles/ Ratio Decidendi
Key Facts
Oral Statements & Written Contracts – What parties said during pre-contractual negotiations which is not put into writing, is a
representation
Oscar Chess Ltd v Williams (1957)
Special Skill & Knowledge – If made from expert to layman, it is a term, but expert to expert may not be a term
Parole Evidence Rule
S 93
Where the parties have reduced their contract to writing, “no
evidence shall be given in proof of the terms of such
contract…except the document itself or secondary evidence… in
which secondary evidence is admissible under the provisions of
this Act”
-
S 94
No evidence of oral statements or written materials relating to
pre contractual negotiations or post contract behavior shall be
admitted
-
S94(a)
S94(c)
Customs
Collateral Contract
Vitiating Factors (EXCEPTION)
Conditions precedent to satisfy before contract comes to
existence (EXCEPTION)
To demonstrate that a particular custom of trade must be implies
to (EXCEPTION)
Main contract would not have been formed without prior
agreement (EXCEPTION)
Case
Legal Principles/ Ratio Decidendi
Key Facts
Condition, Warranty, and Innominate Term
Poussard v Spiers (1876)
If the term goes to the root of the contract and its absence would - Held that term was a condition
have persuaded the innocent party not to enter a contract, that
term is a condition
Bettini v Gye (1876)
If the term relates to a matte, the non-performance of which will - Held that term was a warranty
not impair the substance of the bargain, the term is a warranty
The Hansa Nord (1974)
Terms that cannot be immediately categorized as conditions and warranties simply by looking at their content because it is
possible to envisage both serious as well as trivial breached of
the term
Must apply Hong Fir approach to determine if it deprives
innocent party substantially of the whole benefit if breached
Implied Term in Fact
Sembcorp Holdings v PPL Marine
(2013)
Shirlaw v Southern Foundries (1926)
The Moorcock (1889)
Implied Term in Law
True Gap Test - If parties did not contemplate the issue at all and
so left a gap, court will consider if it will imply a term into the
contract
Officious Bystander Test – Court will imply the term if it is
satisfied that parties, if they had been asked by a bystander
whether they would have included the term to be implied as an
express term, would both answer “Oh, of course!”
Business Efficacy Test – Court willing to imply a term where the
term would inject business efficacy to the contract
Case
Liverpool City Council v Irwin (1977)
Implied Term in Statute
SOGA
S12(1)
S12(2)
S13(1)
S15(2)
S14(2)
Implied Term in Custom
Hutton v Warren (1836)
Exemption Clauses
Incorporation by Signature
L’Estrange v F Graucob Ltd [1934] 2
KB 394
Saunders v Anglia Building Society
(1971)
Evans & Son Ltd v Andrea Merzario
Legal Principles/ Ratio Decidendi
Key Facts
These terms are implied as they are necessarily incidental to
certain types of contract. Implication does not depend on the
intention of the parties but is determined objectively by the court
( reasonable and necessary to imply the term?)
S12(1): a condition that seller has a right to sell the goods.
S12(2): a warranty that the goods are free from charges or
encumbrances in favor of 3rd parties.
S13(1): a condition that goods sold by description will correspond
with their description.
S15(2): a condition that goods sold by sample will correspond
with their sample.
S14(2): a condition that goods supplied under contract are of
satisfactory quality
Well known and universal practice by people in that trade
Person signing the contract is bound by everything contained in
the document whether he has read it or not.
Doctrine of non est factum is available to vulnerable people like
the blind who sign document under a mistaken belief as to their
nature or effect (EXCEPTION)
A collateral contract may sometimes override a written contract.
Does not violate Parole Evidence Act s94 (EXCEPTION)
Case
Legal Principles/ Ratio Decidendi
Key Facts
Incorporation by Notice
Parker v South Eastern Railway
[1877]
Individual cannot escape liability if he fails to read it
- Parker left a bag in the railway station
- On the back of his ticket it stated that the
railway was excluded from liability for items
worth more than 10 pounds
- Parker failed to read clause
- Admitted he knew there was writing on the back
- Bag was lost and he sued
- Court held that the individual cannot escape the
contractual term by failing to read the contract
- Party wanting to use exclusion clause must take
reasonable steps to bring it to the attention of the
customer
Chapelton v Barry UDC [1940] 1 All
ER 356
Olley v Marlborough Court Hotel
[1949] 1 KB 532
Thompson v London, Midland and
Scottish Railway Co (1930)
Interfoto Picture Library Ltd v
Stiletto Visual Programmes Ltd
[1989] QB 433
Type of Document: An EC will not be part of the contract if it is
contained in an unsigned document where a reasonable person
would not be expected to find contractual term, e.g. a ticket
- C obtained a ticket from the attendant after seeing a
sign for the charges for hiring a deck chair
- C put the ticket into his pocket without reading it
- Ticket printed exemption clause on the back but it was
‘Mere Receipt’ not regarded as contractual document and terms held to be not binding as it was a ‘mere receipt’
indicated on it cannot be enforced
- O registered and paid for hotel stay before seeing
Time of Notice - Not bound to terms that are given without
sufficient reasonable notice before the contract is made
exemption clause for lost or stolen articles
- O’s property subsequently stolen and M was held
Notice of exemption clause came after contract was formed.
liable.
Adequacy of Notice: The person relying on the clause must take reasonable steps to bring the notice to the attention of the other
party. No need to show the injured party had actual notice of it
Effect of Clause: The more onerous or unusual the clause the
- S ordered photographic transparencies from I for the
greater the degree of notice required to incorporate it. Must take first time and was charged a ‘holding fee’ of £5 per
special steps to draw attention to it
transparency per day past the holding period
- S retuned it several weeks after the holding period and
‘Red Hand Rule’: Reasonable notice of ‘unusual and onerous’
invoiced for £3783
terms should be given
- Court substituted a quantum meruit award of £3.50
per transparency per day
When recipient receives document containing terms, he would
‘generally still tend to assume that such conditions are only
concerned with ancillary matters of form and are not of
importance’
Case
Legal Principles/ Ratio Decidendi
Key Facts
Incorporation by Previous Course of Dealings
Spurling v Bradshaw (1956)
Where parties have previously made a series of contracts, and
those contracts contained and EC, that clause may have been
incorporated in a subsequent contract even though neither
party made reference to it at the time
Course of dealing must be well established, unlike in Hollier v
Rambler Motors Ltd (1972)
Construction
Houghton v Trafalgar Insurance Co
[1954] 1 QB 247
White v John Warwick [1953] 1 WLR
1285
Hollier v Rambler Motors (AMC) Ltd
[1972]
Photo Production Ltd v Securicor
Transport Ltd [1980] AC 827
Contra Proferentem Rule: Where there is ambiguity, exemption
clauses interpreted in a manner least favorable to the person
who inserted the clause
Rules in Cases of Negligence Liability:
When the clause does not specifically cover negligence,
exemption is inapplicable
Rules in Cases of Negligence Liability
When the clause does not specifically cover negligence,
exemption is inapplicable. The language should be so plain that
it clearly bears that meaning.
Doctrine of Fundamental breach can be covered by exemption
DEFUNCT: not allowed by House of lords. Clear and
clause if the parties are of equal bargaining power and the clause unambiguous representation.
is clear and comprehensive.
Case
UCTA
S1(3)
Legal Principles/ Ratio Decidendi
S2(1)
If there is negligence resulting in injury or death, EC is not
allowed
S2(2)
If there is negligence resulting in other loss or damage, EC is
allowed if reasonable
S3(1) & (2)
If the contract is with a consumer or parties use a standard form
of contract, EC is allowed if reasonable
S11(1)
If EC excludes contractual or tortious liability, UCTA applies
Test of Reasonableness – requirement is that the term shall have
been a fair and reasonable one having regard to the
circumstances which were, or ought reasonably to have been,
known to or in contemplation of the parties when the contract
was made
- Relative bargaining powers of the parties
- Which party is in a better position to purchase insurance
coverage against losses arising
- Whether it is usual for EC to be utilized in those type of contracts
given the prevailing trade custom and practice
Key Facts
Case
Capacity
S35(1) CIVIL LAW ACT
Legal Principles/ Ratio Decidendi
Key Facts
In SG, the age of majority is 21, but the age for contractual
capacity is 18 for most contracts
-
Steinberg v Scala Ltd (1923)
Minor cannot plead minority to recover goods or money unless
there is total failure of consideration
-
Beneficial Contracts for Necessaries (BINDING CONTRACT ON MINORS)
Nash v Inman (1908)
Minor needs to have an actual need for necessaries before it
can be considered a binding contract
-
Fawcett v Smethurst (1914)
Even for necessaries, contract terms must benefit minor for it
to be considered binding
-
S3(2) SGA
Executory contracts for GOODS do not bind minor
-
Where necessaries are sold and delivered to a minor, he must
pay a reasonable price for them – Minor’s obligations is only
liable when the contract is executed, not executory
Case
Roberts v Gray (1913)
Legal Principles/ Ratio Decidendi
Executory contracts for necessary SERVICES binds the minor
Key Facts
-
Darby v Boucher (1913)
Loans for necessaries are unenforceable
-
Loans can be easily misapplied to other purposes unlike an
actual supply of necessaries
Beneficial Contract of Employment, Apprenticeship or Education (BINDING CONTRACTS ON MINORS)
Clements v L & NW Ry (1894)
These contracts are binding on a minor as they provide him a
means of earning his livelihood
-
Such contracts only bind a minor if the terms are, on balance,
BENEFICIAL to the minor
Doyle v White City Stadium (1935)
Analogous contracts are also binding
Remedies Against a Protected Minor
S3(1) MINORS CONTRACTS ACT
A. A plaintiff enters into a contract with the defendant\
B. The contract is unenforceable against the defendant or he
repudiates it because he was a minor at the time the
contract was made
The Court may, if it is just and equitable to do so, require the
defendant to transfer the plaintiff any property acquired under
the contract, or any property
-
-
Case
Mental Incapacity
Mentally Unsound: Che some bte
Yip and another v Maha Pte Ltd
and another (1989)
Drunk : Gore v Gibson (1843)
S3(3) SGA
Mentally Unsound: Manches v
Trimborn (1946)
Drunk: Matthews v Baxter (1873)
Mistake
Common Mistake
Olivine Capital Pte Ltd v Chia
(2014)
Legal Principles/ Ratio Decidendi
Key Facts
A person may be mentally incapacitated by either mental
retardation or intoxication. Contracts entered by them are
binding unless they choose to avoid or repudiate their
contracts.
-
2 REQUIREMENTS BEFORE LAW OFFERS PROTECTION:
1. The mental incapacity prevents the person under such a
disability from understanding what he is doing.
2. The other knows or should have known about the
incapacity at the time of entering the contract. Burden of
proof is on party seeking to avoid contract
Contracts for necessaries sold and delivered to the mentally
incapacitated are binding (EXCEPTION)
-
Contract will be binding if the mental incapacitated ratifies the
contract after he is cured (EXCEPTION)
-
Doctrine of Common Mistake to apply:
1. Substantially shared by both parties
2. Relates to facts as they existed at the time the contract was
made.
3. Renders the subject matter of the contract essentially and
radically different from the subject matter.
4. The parties must have reasonable grounds for mistaken
belief.
5. Parties must not have allocated the risk to either party.
-
Case
Associated Japanese Bank v Credit
du Nord [1989] 1 W.L.R. 255
Legal Principles/ Ratio Decidendi
Test for common mistake is whether both parties contract on a
false and fundamental assumption going to the root of the
contract. Subject matter is radically different from what both
parties believed.
Common Mistake as to the quality of subject-matter renders
contract void in equity
McRae v Commonwealth Disposals
Commission (1951) 84 CLR 377
Contract may not be invalidated on the ground of mistake if, on
its true construction, one of the parties has agreed to bear the
risk of the non-existence of the subject matter.
Wong Lai Keen v Allgreen
Properties Ltd [2009] 1 SLR 148
A contract would not be avoided for mistake if, on its true
construction, the mistake relates to a risk which one of the
parties had agreed to bear.
Contract is void if subject matter did not exist at formation (Res
Extincta)
Couturier v Hastie (1856) 5 HL Case
673
Cooper v Phibbs [1867] LR 2 HL 149
Bell v Lever Bros Ltd [1932] AC 161
Leaf v International Galleries [1950]
2 K.B. 86
Regulated under Sale of Goods Act 1979, s6 “Where there is a
contract for the sale of specific goods, and the goods w/o the
knowledge of the seller have perished at the time when the
contract is made, the contract is void”
Contract is void if mistake is of ownership of the subject matter
of the contract (Res Sua)
Held void at law.
In order for mistake as to quality to render the contract void, it
has to “relate to something which both must necessarily have
accepted in their minds as an essential and integral element of
the subject matter” ie. false and fundamental assumption going
to root of contract.
Mistake as to substance may not render the contract void if the
mistake is not fundamental enough
Key Facts
- The plaintiff bank entered into an agreement with a
rogue under which he purported to sell and lease back
four specific machines
- Defendant bank agreed to guarantee rogue’s
payments under lease-back agreement
- Machines did not exist and rogue defaulted on
payments.
- Plaintiff tried to claim guarantee
- The defendants invited tenders for the purchase of a
wrecked oil tanker stated to be lying at a named spot,
and the plaintiffs made an offer, which was accepted.
- It was proved that the tanker did not exist and never
had existed. (Both were unaware)
- Plaintiff did not discover this until he had incurred
considerable expense in fitting out a salvage expedition
-Parties agreed that estimated development charge was
$7.6m
-Actual development charge was only $950,894.
- A contract was made for the sale of a cargo of corn,
which the parties believed was being shipped from
Salonica to England.
- The corn had, in fact, before the date of sale,
deteriorated and had been unloaded at Tunis and sold.
- An uncle mistakenly told his nephew that he(uncle)
was entitled to a fishery
- After uncle died, the nephew, acting in reliance on the
uncle’s statement, entered into an agreement to rent
the fishery from the uncle’s daughters
- However, the fishery actually belonged to the nephew
himself
- Lever Bros gave Bell compensation of £30,000
inconsideration of early termination of service contracts.
- Co. subsequently discovered that the contracts of
service had been rendered voidable by Bell’s breach of
fiduciary duties by trading in their own accounts.
Both parties thought the subject matter of the contract
was a Constable, but it was not.
Case
Legal Principles/ Ratio Decidendi
Key Facts
The Great Peace v Tslaviris [2002]
EWCA Civ 1407, [2003] QB 679
No longer any remedy for common mistake in equity.
- Tsalviris’ ship was in distress and needed the closest
commercial vessel to aid them
- Was told that the GP was 3 hrs sailing away but it was
actually 39 hrs away
- Great Peace not so far that Tsalviris’ distressed ship
would not benefit from it standing by since It would
arrive within the 5 days before the rescue tug arrived.
If the party is not deprived ‘substantially for the whole benefit’
that the parties intended it should receive, the contract is still
valid
Case
Legal Principles/ Ratio Decidendi
Unilateral Mistake
Chwee Kin Keong v Digilandmall.com The essence is whether one party is mistaken as to the
fundamental term of the contract and other party is aware or
ought to be aware of the mistake.
Key Facts
Claimant purchased oats believing them to be ‘old’
when they were in fact ‘new’ oats which were useless to
him
Promisor Is not bound to fulfill a promise in a sense in which the
promise knew at the time the promisor did not intend it
Mistake as to Identity
Phillips v Brooks Ltd (1919)
For face-to-face dealings, it is presumed that the seller intends to - Fraudster used a cheque to pay for jewellery in P’s
sell to whoever is in front of him – contract is valid.
shop claiming to be ‘Sir George Bullough’
- Fraudster pledge jewellery to B for £350
- Contract upheld due to inter praesentes rule.
Cundy v Lindsay [1878]
Identity of contracting person must be of fundamental
importance to contract before it can be void for mistake
Shogun Finance Ltd v Hudson [2003] Majority view: Unilateral Mistake as to identity would make no
UKHL 62, [2004]1 AC 919
valid contract where there is a written contract.
Bolton v Jones (1857)
Midland Bank plc v Brown Shipley &
Co. Ltd
King's Norton Metal Co Ltd v
Edridge, Merrett & Co Ltd (1897) 14
T.L.R. 98 BBF 315
Lake v Simmons (1927)
Said v Butt (1920)
Minority view: Presumed to intend to deal with the person in
your presence (Inter Praesentes)
B cannot accept A’s offer where B knows it was not intended to
be made to him.
Reasonable steps should be taken to check the identity of the
other person
Contract only voidable for fraud if A believes B is C who is
non-existent or unidentifiable
Contract may be voided even if C is non-existent if A mistakenly
believes that C exists.
Contract may be voided even where A merely believes that B
was not B so long as there is an implied term that B is not B.
Written order for goods
King sent goods in response to an order from the
fictitious ‘Hallam & Co’
Case
Non-est Factum
Mahidon Nichiar bte Mohd Ali v
Dawood Sultan Kamaldin
Mutual Mistake
Raffles v Wichelhaus (1864) 2 H & C
906
Scriven Brothers & Co. v Hindley &
Co [1913] 3 KB 564
Legal Principles/ Ratio Decidendi
Key Facts
Non est factum requires:
1. a fundamental and radical difference in the nature of the
actual and believed document.
2. Party seeking to rely on this doctrine must not have been
negligent in signing the document.
Mutual Mistake as to terms of contract renders contract void
Mutual Mistake as to subject matter of the contract
-Contract void through Mutual Mistake when a “Reasonable
Man” is unable to ascertain the contract as being on either
party’s terms owing to the ambiguity of the circumstances
-Claimant entered into a contract to sell some bales of
cotton to the defendant, which specified that cotton
would be arriving on the ship Peerless from Bombay
- There were 2 ships called Peerless, and both sailed
from Bombay, but W meant a Peerless which sailed in
October, and R a Peerless which sailed in December.
- Plaintiff thought he was selling tow.
- Defendant thought he was buying hemp.
- Both parties were at fault because the Defendant did
not bring a catalog and the Plaintiff’s markings on the
samples were ambiguous.
Case
Legal Principles/ Ratio Decidendi
Key Facts
Misrepresentation
False Statement of Past or Existing Fact
Bisset v Wilkinson (1927)
Statement of Opinion is not misrepresentation
Esso Petroleum v Mardon (1976)
Statement of Opinion is a misrepresentation if there is
special knowledge or skill – Negligent
Misrepresentation (EXCEPTION)
Edgington v Fitzmaurice [1885]
Statement of Intention can be misrepresentation if the
representor did not have the stated intention when making the
statement (Say one thing but intend to mean or do another)
(EXCEPTION)
Keates v Cadogan [1851]
General rule that silence cannot amount to misrepresentation.
Failure to disclose material information was held not to be a
misrepresentation
Silence can be a misrepresentation if it is a half truth
(EXCEPTION)
Spice Girls v Aprilla World Service
[2002]
Pilmore v Hood (1838)
With v O’Flanagan (1936)
Walters v Morgan (1861)
Silence can be misrepresentation if the representor listens in
silence when a false statement is made by a third party to the
representee (EXCEPTION)
Silence can be misrepresentation if it amounts to a failure to
correct a previous statement that has become incorrect at the
time of making the contract (EXCEPTION)
Conduct – Misrepresentation can be made through a person’s
conduct as long as it is intended to induce the other party to
believe in a certain state of facts or conceal certain facts
- Defendant company sold bonds to raise funds
- It said that money would go to alter their buildings, buy
horses, vans and expand into supplying fish
- Real intention was to pay of debts
- Plaintiff sued for misrepresentation and won
- Aprilla entered into a contract after seeing the group
appear in commercial which had all 5 members
- Prior to the commercial, Geri already informed that she
was leaving the group
- The contract was based on the representation that all 5
members would continue working together
-
-
-
Case
Legal Principles/ Ratio Decidendi
Key Facts
Made by One Contracting Party to Another
Gross v Lewis Hillman (1970)
Agency – the representation is made to the representee’s
authorized agent. 2 scenarios:
1. The recipient is only an agent passing on the representation
to his principal ( ie. Principal can sue for misrepresentation)
2. Representor intends that both the agent and principal will be
influenced by the misrepresentation (ie. Both can sue for
misrepresentation)
No Agency – representor still intended the representation to be
passed on to the indirect recipient
(EXCEPTION)
Statement Induced the Other Party To Enter Into A Contract
Panatron v Lee Cheow Lee (2001)
Misrepresentation even when representee choses to make his
own inquiry
Edgington v Fitzmaurice (1885)
Redgrave v Hurd (1881)
-
Misrepresentation even if it is not the sole cause that induced the representee to enter into the contract, if he is materially
influenced
Misrepresentation even if representee had the chance to
discover the truth
Horsfall v Thomas (1862)
Misrepresentation will not have induced contract if claimant is
unaware of the misrepresentation
Cooper v Tamms (1988)
Misrepresentation will not have induced contract if claimant is
knows that the representation is untrue
Atwood v Small (1838) 6 CI&F 232
Misrepresentation will not have induced contract if he is
unaffected because he relies on other information.
No misrepresentation since purchasers did not RELY on
representation made by vendors
- Buyer of gun did not examine it before purchase
- Held that concealment of the defect of the gun did not
affect his decision to purchase since he was not aware of
it
-
- - Purchasers of a mine were told exaggerated statements
as to its earning capacity by the vendors. -- Purchasers
had these statements checked by their own expert
agents, who in error reported them as correct.
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Fraudulent Misrepresentation
Derry v Peek (1889)
Armstrong v Strain (1952)
Smith New Court Securities v
Scrimgeour Vickers (1997)
Standard Chartered Bank v Pakistan
National Shipping (2002)
Legal Principles/ Ratio Decidendi
Key Facts
Fraudulent Misrepresentation
A statement is fraudulent only if:
1. Knowing it is untrue.
2. Not believing it to be true
3. Reckless, not caring if it is true or not
4. Burden of proof is onerous and lies on the representee.
Overlap with Agency:
If the principal was not aware that the statement will be or had
been made, he is not liable for fraudulent misrepresentation
- Directors issued representation in prospectus that it
had right to run trams by steam.
- Plaintiff bought shares based on statement
- Board of Trade subsequently refused to consent to the
use of steam
Damages for fraudulent misrepresentation includes all loss that
flows directly because of the entry by the plaintiff (in reliance
upon the fraudulent misrepresentation) into the transaction in
question, regardless of whether such loss was foreseeable, and
included all consequential loss as well. It also includes the right
to rescind the contract.
Contributory negligence does not reduce claim for fraud.
-
Case
Negligent Misrepresentation
RBC Properties Pte Ltd v Defu
Furniture Pte Ltd (2014)
Legal Principles/ Ratio Decidendi
S2(1) Misrepresentation Act
Negligent Misrepresentation occurs when the representor
made the statement:
1. Without care
2. With no basis to believe it to be true
Esso Petroleum & Co Ltd v Marden
[1976]
Under S2(1) of MA,
1. A false statement of fact
2. Which induced him into a contract
3. Suffered losses as a result
Failure to disclose the change in circumstances amounted to
negligent misrepresentation.
Esso representative stated that station would sell
200,000 gallons of fuel annually based on its proximity
to a busy road. Marden contract on the basis of that
“If a man who has or professes to have special knowledge of
statement. Local authority moved pumps and entrances
skill, makes a representation by virtue thereof to another… with to the petrol station so that it would only be accessible
the intention of inducing him to enter a contract with him, he is from side streets and unseen by passing trade. Marden
argued that relationship with Esso was special and
under a duty of care to use reasonable care to see that
representation is correct.”
created a duty of care under the Hedley Byrne principle.
“Ifnegligently gives unsound advice or misleading information or
expresses an erroneous opinion, and thereby induces the other
side intro a contract with him, he is liable in negligent
misstatement.
Innocent Misrepresentation
S2(2) MA
Key Facts
Innocent Misrepresentation arises when statement was made:
1. Believing it to be true
2. Had reason to believe it was true.
Damages may be available under S2(2) of MA if:
1. Damages awarded in lieu of rescission.
2. Court thinks it Is equitable to do so in the exercise of its
discretion (Only granted if the court thinks it is fair to do
so in all the circumstances)
Case
Bars to Rescission
White v Garden (1851)
Legal Principles/ Ratio Decidendi
Key Facts
3rd party
No right to rescind when a 3rd party acquires an interest in the
subject of the matter in good faith
Impossibility of mutual restitution When contracts are
wholly or partially executed, rescission is barred if it is
impossible to return the benefits transferred by contract.
Long v Lloyd (1958)
JTC v Wishing Star (2005)
United Shoe Machinery Co. of
Canada v Brunet (1990)
Leaf v International Galleries [1950]
2 K.B. 86
Affirmation:
Upon discovery of misrepresentation, if the representee elects to
affirm the contract, the right to rescission is lost
Affirmation:
Election is conditional upon the representee knowing that the
law gives him a right to rescind, even if he had already known of
the misrepresentation.
Where election is conditional, upon the failure of the condition,
the right to rescind re-emerges
Affirmation
Contract can be affirmed by conduct
Lapse of Time
- Plaintiff only found that painting was not a Constable 5
For innocent and negligent misrepresentation, the lapse of
years later when there was plenty of time to check its
reasonable time may be a bar to rescission even if representee
authenticity.
has not discovered the truth
May be assumed to have affirmed the contract
Case
Legal Principles/ Ratio Decidendi
Exemption clauses WRT Misrepresentation
Government of Zanzibar v British
Wide exemptions of liability for misrepresentation may be
Aerospace (Lancaster House) Ltd
enforceable on the basis that they satisfy statutory
[2000] 1 WLR 2333
requirements of reasonableness under s11, UCTA
Watford Electronics Ltd v Sanderson Entire agreement clause not covered by s3 of Misrep Act
CFL Ltd [2001] EWCA Civ 317,
Clause may give rise to evidential estoppel preventing
[2001] 1 All ER
representee from establishing inducement by a
(Comm) 696, [2002] FSR 19
misrepresentation
Key Facts
- Clause stipulated “that no statement or
representations made by either party have been relied
upon by the other in agreeing to enter into the
Contract”
Case
Duress
Barton v Armstrong (1976)
Occidental Worldwide
Investment Corp v Skibs (1976)
Pao On v Lau Yiu Long [1980]
AC 614 (PC. Hong Kong)
Legal Principles/ Ratio Decidendi
Key Facts
Duress to The Person – threats to physically harm amounts to
duress
Burden of proof on the coercing party to rebut presumption that
the threat induced the contract.
Duress to Property – Threats to damage property amounts to
duress.
For duress to goods/ economic duress, it must have been
‘significant cause’
- Readily inferred by court
Burden of proof on the claimant
Economic Duress: 1. Sufficient Pressure to Coerce
“a coercion of will which vitiates consent.”
- Commercial pressure is insufficient.
-
-
- P & L got into a share swap deal
- P agreed not to sell 60% of shares for at least one year
and that L would buy the shares at $2.50
- P realized they were losing out if share prices rose
- L gave indemnity but later refused to pay
Guidelines for sufficiency of illegitimate pressure exerted:
- Whether the person protested
- Whether he had a practicable alternative
- Whether he was independently advised
- Whether after entering the contract he promptly took
steps to avoid it
Holcim (Singapore) Pte Ltd v Kwan
Yong Construction Pte Ltd [2008]
SGHC 231
Whether the coerced party had acted reasonably in
taking the other party’s threats seriously
Economic Duress – FAILURE (INSUFFICIENT PRESSURE)
Endorsed guidelines of illegitimate pressure in Pao On.
Reasons for failure of economic duress
- Contract affirmed (by placing new orders)
- KY had taken no legal steps to assert its claim b4 trial.
- KY also succeeded in asking for time extension for the
construction and had not been penalized for liquidated
damages (no detriment)
- KY in position to help H to procure the raw materials but
made no effort to do so
Case
Huyton SA v Peter Cremer GmbH
& Co (1999)
Legal Principles/ Ratio Decidendi
Economic Duress: 2. Illegitimate Pressure (BAD FAITH)
1. Nature of Pressure
- Threat of any form of unlawful act is generally considered
illegitimate.
Key Facts
Economic Duress, illegitimate pressure where there
is lawful threat made in bad faith
2. Nature of Demand to Which The Pressure is Applied to
Support
CTN Cash & Carry Ltd v Gallaher
Ltd (1994)
- Threat of a lawful act illegitimate only if applied in an illegitimate
way, e.g., blackmail
Economic Duress: FAILURE (NO Illegitimate Pressure, IN GOOD No economic duress; legitimate pressure from lawful
FAITH)
threat, in absence of bad faith
Lawful threat in commercial settings do not constitute economic
duress.
Sharon Global Solutions v LG
International (2001)
Economic Duress: FAILURE (NO Illegitimate Pressure, IN GOOD
FAITH)
Huyton SA v Peter Cremer GmbH
& Co (1999)
Economic Duress: 3. Did the Duress Cause the Party to Enter
Into New Contract?
But For Test is necessary to determine if act of duress was the
decisive factor
No Economic Duress, legitimate pressure from an
unlawful threat (breaking of contract), in absence of
bad faith
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Undue Influence
Class 1: Actual Undue Influence
Tan Teck Khong v Tan Pian Meng
CIBC Mortgages plc v Pitt [1994] 1
AC 200
Langton v Langton (1995)
Morley v Loughan (1893)
Drew v Daniel (2005)
Legal Principles/ Ratio Decidendi
1. Plaintiff must prove that the
defendant had exercised undue
influence over him and this influence
brought about the impugned
transaction
2. Can show that the guilty party has so
dominated over the victim’s mind
that the latter’s independence of
decision is substantially undermined.
3. Not dependent on presence of any
special relationship
4. No requirement of ‘manifest disadvantage’ for actual undue
influence.
Key Facts
- Husband-Wife mortgaged matrimonial home as
security for bank.
- Bank tried to enforce.
Wife claimed that she was unduly influenced by husband
Threats to abandon qualify as Actual Undue Influence
- Son and daughter-in-law of a man moved in with him
after release from prison for murdering his wife
- Threatened to stop caring for him as his health
deteoriated if he did not transfer his property to them
Excessive control, secrecy and exclusion of others who might
- M joined ‘Exclusive Brethren’ and went to live with L in
dilute the defendant’s influence qualify as Actual Undue
practical seclusion for the last 7 yrs of his life
Influence
- L contolled M’s every aspect including diet and
medicine and forced him to place M’s entire fortune at
L’s disposal.
Bullying, confrontation, and harassment qualify as Actual Undue - Daniel coerced aunt to confer a significant benefit on
Influence
him at the expense of her own son through a long
distressing conversation where he threatened to sue
her.
Case
Legal Principles/ Ratio Decidendi
Class 2A: Presumed Undue Influence (Form of Relationship)
Royal Bank of Scotland plc v Etridge Presumption of undue influence arises automatically by force of
(No 2) [2002] 2 AC 773
law. Calls for explanation
Claimant only needs to prove the existence of the relationship;
no need to prove he has reposed trust and confidence in
defendant (already assumed to have)
Allcard v Skinner (1887)
Class 2A undue influence present, religious leader – disciple
relationship
Lancashire Loans Ltd v. Black [1934]
1 KB 380
Class 2A – Parent-Child
The presumption of undue influence existed in the case of a
married woman living apart from her mother who was,
nevertheless, still greatly influenced by her mother
Lai Kwee Lan & Anor v Ng Yew Lay & Class 2A: FAILURE (SIBLINGS)
Anor [1990] 1 MLJ 211
“The relationship of brother and sister is not one where the
presumption of undue influence arises.”
Hylton v Hylton [1754] 2 Ves Sen
Class 2A – Guardian-Ward
547
Wright v Carter [1903] 1 Ch 27
Class 2A – Solicitor-Client
Radcliffe v Price [1902] 18 TLR 466
Class 2A – Doctor-Patient
Ellis v Barker [1871] 7 Ch App 104
Class 2A – Trustee-Beneficiary
Midland Bank v Shepherd [1988]
CLASS 2A: FAILURE
Husband & wife relationship excluded from class 2A special
relationship
Key Facts
- RBS took charge of Etridge's property as security for a
loan for her husband's business overdraft.
- Etridge signed the charge in the presence of her
husband.
- She had taken advice from a solicitor appointed by the
bank; although she thought the solicitor was instructed
by her husband.
- The bank tried to enforce the charge and the wife
claimed undue influence.
- Etridge’s claim failed
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Legal Principles/ Ratio Decidendi
Class 2B: Presumed Undue Influence (Substance of Relationship)
Lloyds Banks v Bundy (1975)
Claimant must prove that there is a relationship of trust and
confidence and hence undue influence
No presumption of undue influence
Key Facts
Tufton v Sperni (1952)
- T, a Muslim convert with no business experience,
wanted to set up a centre for Muslim culture in London
- S, a Muslim with business experience brought into the
committee to oversee the project
- S sold his house to T at more than twice market value
- Plaintiff and defendant great nephew contributed to
purchase of a house
- Plaintiff will live in house until death , after which it
would belong to the defendant
- Defendant could not keep up with mortgages and
plaintiff brought action against him
Unnecessary to prove ‘blind, unquestioning trust’ or a
‘dominating influence’
Relationship may even arise in a one-off dealing.
Cheese v Thomas [1994] 1 WLR 129
(CA, England)
Contract calls for explanation when it impacts the claimant’s
future autonomy.
Defense of change of position
- Defendant only liable for proportionate share of the shortfall.
- Court concerned with achieving ‘practical justice’ such that
relief would be granted even if parties could not be restored to
their precise original positions
Credit Lyonnais Bank Nederland NV
v Burch [1997] 1 All ER 144 (CA,
England)
Contract calls for explanation when it is inconsistent with the
nature of the parties’ relationships.
Taking independent advice is neither always necessary nor
always sufficient to rebut presumption of Undue Influence
Humphreys v Humphreys (2005)
National Westminister Bank plc v
Morgan (1985)
Contract calls for explanation when it undermines the
claimant’s relationship with other who have claims
NO manifest disadvantage; Class 2B
Class 2B, Bank Client
- Employee of modest financial means guaranteed her
employer’s overdraft for up to £270,000
- Refused 2 suggestions to seek independent advice
- Court held that transaction still voidable even if she
had received advice as the lender “must have known
that no competent solicitor could advise her to enter
into a guarantee in the terms she did.”
- Mother transferred home to her son when she had 6
other children
Case
Legal Principles/ Ratio Decidendi
Undue Influence in Banking
Royal Bank of Scotland v Etridge (No ‘Doctrine of Infection’
2)
Bank is ‘infected’ when:
[2002] 2 AC 773
1. It entrusted the guilty party as its agent with the task of
obtaining the execution of the document it is presently suing
under.
2. It had
a. Actual notice (someone told bank of undue influence)
b. Constructive notice (judge presumes bank is aware of
undue influence)
2 CONDITIONS FOR DOCTRINE TO APPLY:
1. The creditor was put on inquiry.
2. It failed to take reasonable steps to minimize the risk that the
wrong of undue influence may be committed
Royal Bank of Scotland v Etridge (No 1. Creditor put on inquiry
2)
- Whenever a wife/husband offers to stand as guarantor
[2002] 2 AC 773
- Also on inquiry in every case where the r/s between the
guarantor and the debtor is non-commercial
2. Steps creditor needs to take when put on inquiry
- Require the guarantor to obtain her own legal advice
- Inform her that the purpose of the solicitor’s involvement is so
that the creditor may obtain a written confirmation that the wife
had been properly advised, and that these steps are for the
creditor’s own protection
Key Facts
Case
Unconscionability
Boustany v Pigott (1993)
Legal Principles/ Ratio Decidendi
Key Facts
Requirements for relief based on unconscionability:
1. Serious disadvantage through poverty,
ignorance, lack of advice etc.
2. Defendant must have exploited the claimant’s
weakness in a morally repugnant manner.
3. Resulting transaction is not just unfair but
overreaching and oppressive
-Elderly woman, Pigott, leased premises to B for less
than 1/6 of market value
-B invited P for tea and “lavished attention and flattery”
- Subsequently, rushed her to a solicitor to conclude the
transaction
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Legal Principles/ Ratio Decidendi
Key Facts
Case
Restraint of Trade
Nordenfelt v Maxim Nordenfelt
Guns and Ammunition Co Ltd [1894]
AC 535
Man Financial (S) Pte Ltd v Wong
Bark Chuan David
Forster and Sons Ltd v Suggett
(1918)
Fitch v Dewes (1921)
Vancouver Malt and Sake
Brewing Co Ltd v Vancouver
Breweries Ltd (1934)
Thomas Cowan & Co Ltd v Orme
(1961)
Legal Principles/ Ratio Decidendi
Key Facts
All restraints of trade are prima facie void as it is against public
policy.
The validity of the clause hinges on 2 requirements:
1. There must be legitimate interest that the party relying on it
is seeking to protect.
2. The clause must be reasonable, having regard to the interest
of the parties and the public generally.
Legitimate interests may include, but not limited to:
1. Trade secrets
2. Trade connections – in professional services w clients
3. Goodwill
4. Stable, trained workforce
Legitimate interests
Reasonable to restraint employees who have acquired ‘trade
secrets or confidential information belonging to the employers
Restraint the seller from competing with this business
anywhere in the world for 25 years, in view of the
worldwide operation of the business sold and the fact
that its main customers were governments
The extent of coverage of restraint should be no wider an area
than is necessary to protect the employer’s particular interest.
Legitimate interests
Reasonable to restraint employees who have influence over the
employer’s clients and may entice them away.
LACK of Legitimate Interest
Test for Reasonableness
The Courts will assess both the interests of the parties, as well as
the public interest, and are generally stricter when considering a
contract of employment as compared to a contract to sell
goods/businesses.
FRAMEWORK FOR REASONABLENESS
1. Physical Scope
- Must be no more than adequate for the protection of the
plaintiffs. This in effect means the area where the plaintiff’s
customers are situate.
2. Time
- Cannot be indefinite.
- Depends very much on the circumstances
3. Scope of the activities restrained
Glass-making techniques
Solicitor’s managing clerk
Case
Baker v Hedgecock (1888)
Legal Principles/ Ratio Decidendi
Reasonableness
Scope of activity banned must be limited to area of business.
- Blanket bans of ‘any business whatsoever’ deemed
unreasonable
Fitch v Dewes (1921)
Reasonableness
Restraints of unlimited duration may be reasonable if they do
not exceed what is reasonably required for the protection of the
convenantee and is not against the public interest.
Reasonableness
it was in the public interest that someone was free to earn a
living
Herbert Morris Ltd v Saxelby [1916]
Sample of Restraint of Trade Clause
Thomas Cowan & Co Ltd v Orme
(1961)
Man Financial (S) Pte Ltd v Wong
Bark Chuan David
Man Financial (S) Pte Ltd v Wong
Bark Chuan David
Prohibition From Industry
Garden Leave Clause – a lot of money given in order to de-value
the person, usually people of high positions
Non-Solicitation Clause – restrict hiring or poaching
Key Facts
Case
Severance
Goldsoll v Goldman (1915)
Attwood v Lamont (1920)
Bennett v Bennett (1952)
Legal Principles/ Ratio Decidendi
Severance will only be permitted if enforcement of the rest of
the contract would not subvert the policies underlying the
illegality.
Severance will only be allowed if it would not leave a
substantially different contract from that which the parties
agreed
Severance will only be allowed if the illegality does not form one
party’s whole or main consideration for the contract (otherwise
the other party would be compelled to perform for no or virtually
no consideration)
National Aerated Water Co Pte Ltd v ‘Blue Pencil’ Rule:
Monarch Co Inc (200)
Illegal part of contract can be cut out (severed) without distorting
the meaning of the remaining contract
Key Facts
Case
Discharge by Frustration
Taylor v Caldwell (1863)
Legal Principles/ Ratio Decidendi
Key Facts
Subject Matter is Destroyed
Frustration by destruction of subject matter
Total destruction may not be necessary. It is sufficient if:
1. The subject matter is so seriously damaged that for
commercial purposes, it has become something else
2. That destruction of a part of the subject matter defeats the
main purpose of the contract
3. The destruction of something which is not the subject matter
of the contract but it nevertheless necessary for its
performance will also frustrate the contract
Death or Incapacity
Frustration by incapacity
Poussard v Spiers & Pond (1876)
General Rule: Contracts of a personal nature-those where the
promisor has to perform the obligations personally – are
frustrated by the promisor’s death or incapacity e.g. illness,
imprisonment, conscription.
- Frustration depends on the likely duration of the incapacity and
whether the disruption would make a radical change to the
contractual performance.
Failure of Source of Supply
Holcim (SG) Pte Ltd v Kwan Yong
Construction Pte Ltd (2009)
General Rule: Where the contract expressly provided that goods
are to be supplies by a particular source, failure of that source
may frustrate the contract
The position is similar where, though there is no express
provision, but both parties contemplated supply by the particular
source
No frustration as it was not in contemplation of both
Blackburn Bobbin Co Ltd v TW Allen NO FRUSTRATION: Failure of Source of Supply
& Sons Ltd (1918)
parties that goods will come from the same source
No frustration, alternative methods available even though
Tsakiroglou & Co Ltd v Noblee Thorll Method of Performance Is Impossible
General Rule: Where a contract has provided for, or the parties it is not intended by both parties
GmH (1960)
have contemplated, a particular method of performance, and if
that method becomes impossible, the contract becomes
frustrated
Method stipulated must have been intended to be exclusive,
otherwise, alternative methods may have to be resorted to so
long as they are not fundamentally different
NO FRUSTRATION: Increase in Expenses Resulting in
Glahe International Expo AG v ACS
Computer (1999)
Unprofitability
General Rule: There is no frustration even if there has been an
increase in expenses, as long as the performance was not
fundamentally different in a commercial sense
Case
Legal Principles/ Ratio Decidendi
Krell v Henry (1903)
Non – Occurrence of Event/ Frustration of Purpose
General Rule: Contract is frustrated where supervening even has
undermined the purpose or value of the contract that the
recipient should not be required to accept or pay for it
Herne Bay Steamboat Co v Hutton
(1903)
Key Facts
Purpose in question must be common to both parties i.e.
expressly/assumed to be the foundation or basis of the contract.
Failure of purpose alone does not frustrate
NO FRUSTRATION: Non – Occurrence of Event/ Frustration of No frustration
Purpose
Unavailability
General Rule: For a delay to render performance a thing radically
different, the delay must be so abnormal in its effect or expected
duration as to fall outside what was the reasonable
contemplation of the parties at the time of contract
SG Woodcradt Manufacturing v Mok Government Intervention
Under SG law, the doctrine of frustration applies to a lease of
Ah Sai (1979(
land
Government Intervention
Held that the sale and purchase agreement was frustrated
Lim Kim Som v Sheriffa Taibah bte
Abdul Rahman (1994)
The doctrine can also apply to a contract for the sale of land
by the supervening compulsory acquisition of the property
by the government
Limitations
J Lauritzen AS v Wijsmuller BV (2990) Self-Induced Frustration
General Rule: A party to a contract cannot rely on self-induced
frustration (frustration due to his own conduct)
Self-Induced Frustration
Harrington v Kent (1980)
The other party is entitled to rely on it
Foreseeable Events
Glahe International Expo AG v ACS
The more foreseeable a event, the less chance the doctrine will
Computer (1999)
apply
Reasonably foreseeable does not mean frustration
Slightly foreseeable may be frustration
Force Majeure Clause
Bank Line v Arthur Capel (1919)
Express term in the contract providing for what is to happen
between the parties in the event of an Act of God (must be Act of
God)
Cadelfa v SRA
Clause must be full and complete
Case
Legal Principles/ Ratio Decidendi
Key Facts
Effects Of Frustration (Common Law)
From the time when the contract is frustrated, the contract
Fibrosa v Fairbairn (1943)
ceases to exist.
There are no more liabilities or obligations due, and crucially, the
losses lie where they fall
Effect Of Frustration (Statute)
If you have been paid money, you must return the money
S2(2)
However, if you have incurred expenses then the court may allow
S2(3)
you to set off the amount you need to return bases on how much
money you expended
If you receive a valuable benefit, you may be ordered to return it
S2(4)
If there is a force majeure clause covering the situation, it
S3(3)
prevails over section 2
S3(4)
If only part of the contract is frustrated, then you can still carry
on with the contract
Case
Discharge by Agreement
Legal Principles/ Ratio Decidendi
Key Facts
Subsequent Agreement to Terminate
General Rule: Contracting parties may release themselves from
the obligations of the original contract by entering into a
subsequent contract of release.
- For the subsequent agreement to be valid, it must be supported
by consideration
Holcim v Precise Development (2011) Expressly Included Clause
General Rule: If there is a expressly included term to bring the
contract to an end in the term, the contract may be released.
Discharge by Performance
Precise Performance
NO PRECISE PERFORMANCE IN THIS CASE
Cutter v Powell (1795)
General Rule: A party must perform his precise and exact
obligations under a contract before he is entitled to claim
payment or performance from the other party
Precise Performance – Strict
Frost v The Aylesbury Dairy Co Ltd
(1905)
Where there is a contract for the delivery of a specific end result,
performance must be strict. If not, can be regarded as breach
Precise Performance – Reasonable
Thake v Maurice (1986)
If the contract is for professional services, like a doctor or lawyer,
then there is no guaranteed result. As such the requirement is to
do the service with the reasonable skill and care expected
Exceptions to Discharge by Performance
DE MINIMIS RULE
Acros, Ld v E A Roanaasen & Son
(1933)
General Rule: Microscopic deviations in performance will be
ignored and treated as no breach.
FACTORS:
1. Timing
2. Vicarious Performance
3. Manner of Performance
SEVERABLE OBLIGATIONS (FOR NON-MONEY RELATED)
EG. Construction Contracts
General Rule: If the obligations can interpreted to be separate
and independent, complete performance of each divisible
portion is acceptable and payable
SUBSTANTIAL PERFORMANCE
Hoenig v Isaacs (1952)
General Rule: If the obligation is not an entire obligation (there
are multiple different obligations in one contract), and if partial
performance amounts to substantial, then party in breach may
be entitled to claim the full price less the cost to rectify the
situation
Case
Bolton v Mahadeva (1972)
Section 3 Appointment Act
Sumpter v Hedges (1898)
Planche v Colburn (1831)
Discharge by Breach
Actual Breach of Term
Condition: Possard v Spiers (1876)
Warranty: Bettini v Gye (1876)
Innominate: Hong Kong Fir
Legal Principles/ Ratio Decidendi
Key Facts
SUBSTANTIAL PERFORMANCE NOT ALLOWED (EXCEPTION)
Quality and conditions of what was performed must be sufficient
to carry out its purpose. Half-baked job with defects despite
substantial performance is not allowed
SUBSTANTIAL PERFORMANCE: APPORTIONMENT ACT
Precise Performance not needed for work of periodic nature
(ONLY FOR MONEY RELATED PORTIONS LIKE RENT ETC.)
SUBSTANTIAL PERFORMANCE: PARTIAL PERFORMANCE OK
General Rule: A claim may be made for a reasonable sum in
relation to the partial provision of work or services, if the party
who received the alleged benefit of this partial performance had
the option of freely accepting or rejecting the benefit of this
partial performance and indeed accepted it
Innocent party must recompense party in breach if they accepts
the latter’s performance
PREVENTED PERFORMANCE
When party is prevented by the promise from performing all his
obligations, he can recover a reasonable price for what he has
done
General Rule: An aggrieved party may elect to discharge the
contract for breach if the contractual term which has been
breached is a condition, warranty, or innominate term AT THE
TIME THE PERFORMANCE WAS DUE because the other party:
1. Does not perform.
2. Performs poorly/defectively
Anticipatory Repudiatory Breach of Term – Renunciation of Obligations
General Rule: When the party to contract clearly informs the
Horchester Case
other party that he renounces his obligations under the contract
NOT ALLOWED TO RENUNCIATE the contract, as part of a
Karthigesu JA in San International
Pte Ltd v Keppel Engineering Pte Ltd divisible contract
(1998)
GIB Automation Pte Ltd v Deluge Fire NOT ALLOWED TO RENUNCIATE the contract, due to erroneous
Protection (SEA) Pte Ltd (2007)
construction of contract
Case
Legal Principles/ Ratio Decidendi
Key Facts
Anticipatory Repudiatory Breach of Term – Impossibility
Universal Cargo Carriers Corporation General Rule: When one party makes it impossible for the other Breach as performance impossible
v Citati
party to perform.
Innocent party must show that further performance is in fact
impossible. It is not enough to show that a reasonable person
would conclude that further performance is impossible
Right of Election
General Rule In cases of repudiatory breaches, the innocent party
White & Carter v McGregor (1962)
is entitled to the right of election, where they can choose to
affirm or terminate the contract.
Party is entitled to damages either way, but the choice once
made is irrevocable.
Only available in breach of condition of major innominate term.
Termination
1. Liable to perform all unperformed obligations which has
accrued before termination.
2. Both parties released from future obligations
3. Entitled to damages.
Affirmation
1. Both parties bound to perform all the obligations under it
2. Entitled to damages
Conditions for Affirmation:
1. Does not require the co-operation of the party in breach
for fulfilling his obligations
2. Has a legitimate interest in continuing the contract
(things that cannot be claimed in damages)
Case
Remedies for Breach
Limitation Act, S6
Addis v Gramophone (1909)
Unliquidated Damages
Robinson v Harman (1848)
Watts v Morrow (1991)
Hobbs v The London and South
Western Railway Company (1875)
Perry v Sidney Phillips & Son (1982)
Jarvis v Swan Tours Ltd (1973)
Malik v Bank of Credit & Commerce
International SA (1998)
Farley v Skinner (2002)
Farley v Skinner (2002)
Monarch SS Co v Karlshamns
Oljerfabriker
Legal Principles/ Ratio Decidendi
Key Facts
Plaintiff must commence legal action within 6 years from the
time the contract was breached
Monetary compensation paid to the injured party for its loss –
aim is not to punish
Principle: To place the innocent party, so far as money can do it,
in the same position they were in had the contract not been
breached
STEP 1: TYPE OF LOSS RECOVERABLE
General Rule: Only pecuniary losses are recoverable. Nonpecuniary losses are generally not compensable on policy
grounds
If no genuine pre-estimate given for losses in case of breach in
contract, can proceed to follow steps to claim unliquidated
damages, if they apply.
STEP 1: TYPE OF LOSS RECOVERABLE (EXCEPTION)
1. Mental distress because of substantial physical
inconvenience or discomfort because of breach may be
considered valid.
2. Mental Distress due to physical loss caused by breach
3. Where the purpose of the contract was to provide
enjoyment, peace etc.
4. Where loss of reputation caused by grossly defective
performance results in financial loss
5. Cause of inconvenience is a sensory experience.
6. Breach deprived the plaintiff of the very object of the
contract.
STEP 2: CAUSATION
General Rule: Breach must cause the loss suffered
Not an effective cause of the loss
Case
Hadley v Baxendale (1854)
Legal Principles/ Ratio Decidendi
STEP 3: REMOTENESS
General Rule: Losses that are too remote are not compensable.
Victoria Laundry Ltd v Newman
Industries (1949)
Imputed Knowledge: Knowledge that every reasonable person
has or knows.
Actual Knowledge: Knowledge that is exclusive only to the
contracting parties.
Hadley v Baxendale (1854)
TEST FOR REMOTENESS
1st LIMB: Losses that arise naturally from the breach, that can be
foreseen by a reasonable person (imputed or actual knowledge
may apply) can be recovered
2nd LIMB: Losses that arise from matters that were in
contemplation of both parties, such as IP infringement etc. (only
actual knowledge applies) that are foreseeable, can be recovered
Key point is that the damages must have been discussed or been
in contemplation of both parties with their access to actual
knowledge to be considered as foreseeable.
British Westinghouse Electric &
Manufacturing Co Ltd v
Underground Electric Railways
Company of London Ltd
White & Carter v McGregor
STEP 4: MITIGATION
General Rule: Losses which the innocent party could have taken
reasonable steps to avoid, but did not, are not compensable.
NO DUTY TO MITIGATE WHERE:
1. Financially unable to afford the steps needed to be taken
2. Steps will place reputation at risk
3. Steps involve complex litigation
4. Impossible or nothing to do
5. Doing so increases the loss suffered
6. Claim in debt, not claim in damages
Key Facts
Case
Legal Principles/ Ratio Decidendi
Key Facts
STEP 5: ASSESSMENT OF DAMAGES (EXPECTATION LOSS)
Aim: To put the injured party in the position he would be in if the
contract had been performed properly
Expectation Loss
= [Position innocent party should be in] – [Position innocent party
is currently in]
Diminution of Value
- Usually in sale of goods cases.
- 2 forms:
A. Difference between market/resale value of the contract
performance and the stated contractual value
B. The loss of profit which the innocent party would have
earned using what was given in the contract
Radfor v De Froberville (1977)
Ruxley Electronics and Construction
Ltd v Forsyth (1996)
Anglia Television v Reed (1972)
C&P Haulage v Middleton (1983)
Cost of Cure:
Cost of cure was allowed
- Gives the innocent party money to repair any defects,
usually in construction cases
- Reasonable if:
1. Cure was necessary in mitigating loss
2. If plaintiff effected the cure
3. If intention to sell is for profit or not
4. If the cost of cure is proportionate to losses
STEP 5: ASSESSMENT OF DAMAGES (COC – AMENITY LOSS)
When there is a loss of enjoyment rather than monetary loss
Compensation of loss of amenities
STEP 5: ASSESSMENT OF DAMAGES (RELIANCE LOSS)
It is the amount spent in reliance on a party’s promise to perform
his side of the contract.
= [position before contract] – [position after contract]
Reliance loss CAN be claimed in addition to expectation loss
when it does not result in double counting
Reliance loss CAN be claimed where expectation loss is too
speculative
Reliance loss CANNOT be claimed when the party in breach
proves the innocent party made a bad bargain (i.e., Reliance
expenditure exceeds loss in profits)
Case
Chaplin v Hicks (1911)
Legal Principles/ Ratio Decidendi
STEP 5: ASSESSMENT OF DAMAGES (LOSS OF CHANCE)
Liquidated Damages
General Rule: A term of the contract agreed by the parties to
compensate for losses resulting from breach of contract.
Pneumatic Tyre Company Limited v
New Garage and Motor Company
Ltd (1915)
Action for A Fixed Sum
MP-Bilt Pte Ltd v Oey Widarto
Specific Performance
Tay Ah Poon v Chionh Hai Guan
Beswick v Beswick
1. If it is a genuine pre-estimate of the loss which could be
suffered, the court will enforce the sum stated even if it may
be higher or lower than the actual suffered
2. If it is a penalty clause aiming to compel performance or
‘punish’ , court will strike down the clause and claim actual
loss as assessed
Liquidated Damages VS Penalties
1. Labels are not conclusive (Penalty)
2. Amount is extravagant & unconscionable in comparison to th
greatest possible loss resulting from a breach (Penalty)
3. Contract obligation is to pay a fixed sum, but the clause
provides for payment of a larger sum than this (Penalty)
4. If single lump sum is payable on occurrence of serious breach
(Penalty)
5. Even if loss is very difficult to estimate with precision
(Liquidated Damages)
General Rule: Where contractual breach relates solely to an
obligation to pay a fixed sum of money, instead of damages, the
court will order that fixed sum to be paid.
Simply a recovery of what is owed to him
Claim in debt is not a claim in damages
General Rule: A Court Order to perform the obligations under the
contract. It is an equitable remedy, ordered usually in sale of
unique good or land
Specific Performance is ordered only when:
1. Damages do not provide adequate relief
2. It does not force an unwilling defendant (eg. in employment
contracts or personal service)
3. Does not need constant supervision of the court
4. Does not cause severe hardship to the defendant
5. It does not adversely affect 3rd parties’ rights
6. It is not impossible to perform
Key Facts
C deprived of opportunity to compete in beauty contest
Awarded damages for loss of chance to win (1/n x [prize
amount])
Case
Injunction
Legal Principles/ Ratio Decidendi
Key Facts
An order at the discretion of the court, usually before the actual
breach has occurred
“Balance of Convenience” Test – must lie in favor of granting the
injunction
Warner Bros v Nelson (1937)
Lumley v Wagner
Injunction cannot be used to indirectly enforce specific
performance
Prohibitory Injunction
A court order to refrain from doing an act in breach (e.g., not be
employed by competing business in breach of valid ROT)
Mandatory Injunction
A court order to correct an act that should not have been done
Tort of Negligence
General Rule: To sue for tort, there must be a DOC owed, DOC
breached, and causation of harm must be by the DOC
Actionable Damage
Ngiam Kong Seng
Man Mohan Singh
1.
a.
b.
c.
2.
3.
Physical Damage
Broken leg
Damage to property
Consequential economic loss
Pure economic loss (monetary only)
Nervous shock
Establishing DOC
1. FACTUAL FORESEEABILITY
Spandeck Engineering Ptd Ltd v DSTA Before the Spandeck Test can be applied, there is a need to
(2007)
consider if the defendant should have reasonably foreseen that
the act or omission would affect the victim
YES – ECONOMIC LOSS
Spandek v DSTA (2007)
The Sunrise Crane (2004)
Donoghue v Stevenson (1932)
YES –PHYSICAL DAMAGE
YES –PHYSICAL INJURY TO DUE TO NEGLIGENT ACT
Spandek claimed against DSTA for negligence on the basis
that DSTA owed it a DOC to apply professional skill and
judgement in certifying, payment for work carried out by
the appellant without causing it any economic loss.
Spandeck claimed DSTA had breached DOC by negligently
undervaluing and under-certifying the appellant’s works.
Ruled in a majority decision that it was foreseeable that
failing to inform on the dangers will result in the damage
of the vessel
Snail remnants in drink.’Neighbor Principle’ applied.
Case
Pang Koi Fa v Lim Djoe Phing (1993)
Legal Principles/ Ratio Decidendi
YES – PSYCHIATRIC HARM
Spartan Steel & Alloys Ltd v Martin & NO – ECONOMIC LOSS
Co Ltd (1973)
NO –PHYSICAL DAMAGE
Man Mohan Singh
2. PROXIMITY
CHAN CJ IN SPANDEK
Sutherland Shire Council v Heyman
(1985)
Sunrise Crane (2004)
RSP Architect Planners & Engineers v
Ocean Front Pte Ltd (1996)
Anwar Patrick
Anwar Patrick
Williams v Natural Life
Key Facts
Foreseeable by the doctor that a negligent treatment
would cause psychiatric harm to those of close
relationship to the patient
Pure economic loss from loss of steel which might have
been produced is not recoverable.
Not foreseeable that the victims killed would compromise
all the children of appellants and force them to do fertility
treatment to have more kids
General Rule: There must be sufficient legal proximity between
the claimant and the defendant for a DOC to arise – based on the
closeness and directness of the relationship between the parties.
There is prima facie DOC is factual foreseeability and proximity is
established
FACTORS TO CONSIDER:
1. Physical proximity (space and time)
2. Circumstantial proximity (relationship between them)
3. Causal proximity (causal connection between the negligent
act and the loss sustained)
Don’t need to prove all 3.
To determine proximity, compare with previous cases and draw
similarities
YES - CAUSAL PROXIMITY (Physical Damage Due To Negligent
Act)
YES – CAUSAL PROXIMITY (Economic Loss)
YES – CIRCUMSTANTIAL PROXIMITY
YES – VOLUNTARY ASSUMPTION OF RESPONSIBILITY AND
RELIANCE
NO – CAUSAL PROXIMITY (Economic Loss)
3. POLCIY CONSIDERATIONS
General Rule: There is a need to consider if there are any policy
reasons to negate the prima facie duty of care. Must ask if
imposing a DOC on the defendant goes against public interests.
Cardozo CJ in Ultramares Coproration Floodgates Argument
v Touche (1931)
Argues that if DOC not established for all potential users, it could
open floodgates to an overwhelming number of claims from
other consumers who were similarly harmed
Lawyer Client relationship
Case
Legal Principles/ Ratio Decidendi
Key Facts
E.g. Information Dumping by doctors Defensive Behaviour
or professionals to clients and patients Relates to the risk that the courts, in allowing recovery, may
encourage defensive conducts amongst potential defendants and
this may result in detrimental social effects
Bumi, by directly contracting with MSE, chose to seek
Man B&W Diesel SE Asia Pte Ltd v PT Contractual Matrix
Bumi International Tankers (2004)
Refers to the relationship between parties that arises from a
redress from MSE instead of MBS.
contractual agreement and how that relationship may affect the Extending remedy against MBS in tort would be in conflict
duty of care owed by one party to another in the context of a tort with its express contractual relationship with MSE
claim.
Breach of DOC
General Rule: A defendant who owes a DOC will only be negligent
if his conduct fails to reach the standard of care expected of him
(standard of a reasonable person)
The reasonable man is described as “the man in the street”
Hall v Brooklands Auto Club (1933)
Defendant’s Level of Skill
1. Higher level of skill, higher standard of care
2. SOC cannot go lower than reasonable person
Likelihood of Harm
NO BREACH
Bolton v Stone (1951)
1. Higher the likelihood, higher SOC
Seriousness of Harm
BREACH
Paris v Stepney Borough
1. Higher the seriousness, higher the SOC
Cost of Avoiding Risk
The Wagon Mound (1967)
1. High cost, high risk (incurring cost is necessary)
2. High cost, low risk (may not have to incur cost)
Latimer v AEC Ltd
3. Low cost, low risk (may have to incur cost)
NO BREACH
Applies even if the person is inexperienced
Nettleship v Weston (1971)
Yeo Peng Hock Henry v Pai Lily (2001) For professionals, the SOC is that which is reasonably expected of BREACH
a reasonably competent professional wrt a particular field
Bolam v Friern Hospital Management
Committee (1957)
Fong Maun Yee v Yoon Weng Ho
Robert (1997)
However, not needed to have highest level of skill
Professional standards are only a guideline and the real issue is
not the practice but the extent of the legal duty in a given
situation and is a question of law
Wilsher v Essex Area Health Authority For non-professionals, the level of experience is not relevant
(1988)
NO BREACH
BREACH
Case
Scott v London & St Katherine Docks
(1865)
Eassen v London (A)
Ward v Tesco Stores (A)
Legal Principles/ Ratio Decidendi
Key Facts
Res Ipsa Loquitur - The Facts Speak for Themselves
FULFILL ALL REQUIREMENTS
1. If circumstances show that the defendant was most probably
negligent, then the plaintiff does not have to prove breach of
DOC. Defendant has to prove he is not negligent.
2. 3 CONDITIONS:
A. Defendant was in control of the situation which resulted in FAIL REQUIREMENT A
the accident
FUFILL REQUIREMENT A
B. The accident would not have happened, in the ordinary
course of things, if proper care was taken.
FAIL REQUIREMENT B
C. The cause of the accident must be unknown to the plaintiff
George v Eagle Air Services (B)
Causation of Damage
Establishing Liability: Factual Causation
The “But-For” Test
Barnett v Chelsea & Kensington
General Rule:
Hospital (1969)
1. Asks if there was a factual connection between the loss and
the breach of duty
2. If not for the defendant’s actions, damage will not occur.
Must have 50% probability that he caused the damage
(usually in medical negligence)
3. If it is found that the plaintiff would have still have suffered
harm not withstanding that the defendant was not negligent,
we can conclude based on the but-for test that the
defendant’s alleged negligence did not cause the harm
suffered by the plaintiff
Chester v Afshar (2005)
The “But-For” Test (EXCEPTION)
Material Contribution to Damage
General Rule: Questions whether the breach materially
contributed to the damage. It is not necessary for the breach to
be the sole or dominant cause of the plaintiff’s loss or damage
Wilsher v Essex Area Health Authority General Rule: Where there are several potential causes of harm,
(1988)
some of which are tortious and some of which are natural, the
basic rule is that the plaintiff can succeed only if he proves on a
balance of probabilities that the damage in question is
attributable to tort (>50%)
d
Bonnington Castings Ltd v Wardlaw
(1956)
Held that the practitioner would be liable for a negligent
omission to warn of risk to the plaintiff, notwithstanding
that there is insufficient evidence to show that, even if
duly warned, the plaintiff would not have undergone the
surgery
Case
Legal Principles/ Ratio Decidendi
Fairchild v Glenhaven Funeral Services THE FAIRCHILD EXCEPTION
Ltd (2003)
Restricting Liability: Legal Causation (Novus Actus Interveniens)
Refers to an intervening event or act that occurs after the
Lord Wright in The Opresa (1943)
Sunny Metal & Engineering Pte Ltd v defendant's initial wrongful conduct and breaks the chain of
Ng (2007)
causation between the defendant's conduct and the plaintiff's
harm. This intervening event is significant enough to be
considered a new cause of the plaintiff's harm.
An intervening act can be an act of a third party, an act of nature,
or an act of the plaintiff themselves.
For an intervening act to break the chain of causation, it must be
both unforeseeable and independent of the defendant's conduct.
Restricting Liability: Remoteness
General Rule: Is the harm caused too remote for the tortfeasor to
be liable, even though there is a duty, breach and causation?
Foreseeability v Remoteness
Factual Foreseeability: Whether defendant could foresee that an
act will cause the loss
Remoteness: Whether the act will actually cause the loss
Smith v Leech Brain & Co Ltd (1962)
Egg-Shell Skull Rule
General Rule: The defendant has to take the plaintiff as he or she
is, with existing predispositions.
Hence, if the victim’s pre-existing hypersensitivity causes him to
suffer a greater injury, defendant is liable to the full extent of the
injury (ONLY WHAT ARISES FROM ACTION OR INACTION)
No need for the defendant to know about the pre-exisiting
conditions to be liable
Key Facts
Worker had contracted mesothelioma after being exposed
to asbestos dust at different time by more than one
employer or occupier of the premises. Each had materially
increased the risk that the plaintiff would contract the
disease. Defendant’s conduct caused the damage
Case
Defences
ICI v Shatwell
Legal Principles/ Ratio Decidendi
Key Facts
1. Complete Defence
General Rule: The plaintiff cannot complain of injury if he has
voluntarily consented to the risk of injury. The defense applies
where the plaintiff is conscious of the risks and consented to
those risks
2. Ex Terpi Causa
Plaintiff not having a work permit to work in SG does not
Ooi Han Sun v Bee Hua Meng (1991)
General Rule: No action ought to be founded on a wicked act
prevent him from claiming damages against the defendant
(illegal). However, the fact that the plaintiff is involved in some who had negligently caused the plaintiff’s injuries
wrongdoing does not itself provide a good defence to the
defendant
a. If plaintiff performs illegal act, offence must be sufficiently
serious (immoral or socially unacceptable)
Ashton v Turner (1981)
b. Damage must have sufficient connection to the crime
Section 3(1) – Contributory Negligence 3. Contributory Negligence
General Rule: Enunciates that a plaintiff’s negligence will result in
and Personal Injuries Act
a reduction of damages only where it is causally relevant to the
damage which he or she has sustained
PLAINTIFF BEARS THE PROTION OF THE LOSS BASED ON SHARE
OF RESPONSIBILITY FOR RESULTING DAMAGE
Only applicable where:
a. Plaintiff failed to take reasonable steps to guard himself from
foreseeable harm
b. Plaintiff was at fault and caused the injury he suffered (only
relevant where there is more than 2 causes and plaintiff’s
cause is one of them)
4. Exemption Clause
General Rule: If defendant was negligent in business, UCTA
applies.
In general, defendant cannot exclude himself from death or
personal injury
Can exclude from other liability (economic loss) is the clause
passes the test of reasonableness