Complete Business Law Mindmap
Complete Business Law Mindmap
Contract
Terminology
valid contract is an agreement that satisfies all legal requirements.
void contract is treated by law as nullity, never existed at all.
unenforceable contract is one that is valid and legally binding but cannot
be enforced, eg, because of a provision of law.
Oral, by conduct
Offer
Offer must be communicated.
Acceptance
Bilateral
Written
Unilateral
Consideration
Unconditional
agreement to all
terms of the offer.
Unilateral
Silence
Cross offer
No meeting of minds
Invitation To Treat
Postal Acceptance Rule
Acceptance of Offer
Exceptions
Ignorance of Offer
Termination of Offer
Contract
Acceptance
Consideration
Chapter 7
Benefit-Detriment
Promisee confers a benefit on
the promisor in return for the
promisors promise.
Or
Incurs a detriment in return for
promisors promise.
Chappell & Co Ltd v Nestle Co
Ltd
Exchange
Consideration
must be requested
by promisor
Consideration
must not be of
past
Consideration
must move from
promisee
Benefit conferred or
Past consideration is
detriment suffered must no consideration.
by the promisee must
be requested by the
Exception
promisor.
Pao On v
Combe v Combe
4 (+1) Elements
Have existing legal relationship
Clear & Unequivocal promise
Commercial
Agreements
Sufficient
Insufficient
- Nominal value
- Forbearance to sue
Suspensive or Extinctive
Consideration must be
sufficient; need not be
adequate.
Chappell & Co Ltd v
Nestle Co Ltd
Promissory Estoppel
Prevents a person from going back to his promise even if it is
not supported by consideration.
Central London Property Trust v High Tress House Ltd
Value
Periodic Payments
- not possible to recover former payments
- future payment is suspended, and may be revived upon reasonable notice
- justify by fact that promises were given in response to acute & temporary circumstances
- intend to be binding to while extenuating circumstances last
One-Off Payments
- creditor accepts a lesser sum in satisfaction of a larger debt
- ultimately depends on whether the creditors intention is to forgive the debt or merely allow
more time for repayment
5 Guidelines to
Distinguishing Terms from
Representations
Pre-Contractual
Statements
Representations
Puffs
Sales talk, no
legal effect
Normal
exaggeration
&
grandstanding
that is part of
contract
negotiation,
ex. Best beer
in the world.
True
False
Sue for
misrepresentation
Express
(Pg 264) Section 93 & 94 of Evidence Act: When parties have reduced contract to
writing, either party may not attempt to show by extrinsic evidence that the terms in
written contract must be changed, added to or contradicted.
Except:
S94(a): vitiating factors eg misrep,mistake etc
94(b): conditions precedent b4 k comes into existence
94(f): extrinsic evidence to aid in interpretation of written terms
The existence of any separate oral agreement (as a warranty), as to any matter
on which a document is silent and which is not inconsistent with its terms, may
Collateral Contract
be proved; whether or not this provision applies, the court shall have regard to
the degree of formality of the document.
Implied
Usage / Custom
2 Approaches
to Differentiate
Conditions
& Warranties
Special Skill & Knowledge statements made by a person who has special
knowledge, more likely to be term
Terms
Condition
Innominate Term
Warranty
Statue
Implied by Fact
Depends on parties
subjective intention
objectively ascertained.
2 Test:
- Officious-Bystander Test
- Business Efficiency Test
Court
Implied by Law
Objective test: Is it
reasonable to imply such a
term?
Implied to promote certainty
& give effect to important
social policies.
EC
circumstances whether the breach Collateral contract may sometimes override written
not allowed. S2(1)
Cases of Negligence Liability
has deprived innocent party of
contract
standard form contract
substantially entire benefit of
By Notice Type of document, time of notice,
- Other damages EC subject to
EC subject to Test of
contract.
adequacy of notice, and effect of clause (P295)
Test of Reasonableness S2(2)
Reasonableness S3(1)(2)
By Previous Dealings Hollier v Rambler Motors Ltd
(P301)
Step 3: Apply Test of Reasonableness
terminate
the
contract
& sue for
damages
Sue for
damages
only.
Poussard
v Spires
Yes
Serious
Consequence
No
Minor
Consequences
The Second Schedule lists the following as matters that may be relevant:
(a)
The strength of the bargaining positions of the parties relative to each other, taking into
account (among other things) alternative means by which the customers requirements could
have been meet;
(b)
Whether the customer received an inducement to agree to the term, or in accepting it had
an opportunity of entering into a similar contract with other persons, but without having to
accept a similar term;
(c)
Whether the customer knew or ought reasonably to have known of the existence and the
extent of the term (having regard, among other things, to any custom of the trade and any
previous course of dealing between parties);
(d)
Where the term excludes or restricts any relevant liability if some condition is not complied
with, whether it was reasonable at the time of the contract to expect that compliance with
that condition would be practical;
(e)
Whether the goods were manufactured, processed or adapted to the special order of the
customer.
It would be more
reasonable for customer to
have accept the EC if he is
induced to it (given a
benefit to accept the EC).
Applies to conditional EC.
What this means is whether
the conditional EC is
reasonable at the time the
contract was made.
If the customer places a
special order, it would be
more reasonable for the
customer to accept the EC
because of the additional
risk involved in fulfilling
the special order.
Illegality
Misrepresentation
Refer to Chapter 13
Undue Influence
Refer to Chapter 14
Vitiating Factors
Duress
Economic Duress
To Property
2 Tests for Economic
Duress
Restraint of Trade
Legitimate Interest
of business
Reasonable in duration,
area and scope
Employment k
Severance
Entire Clause
Not against
Public Interest
Barton v Armstrong
Illegitimate Pressure
Traditional Approach
1.
To Person
2.
3 factors has to be
satisfied
Illegitimate threat /
pressure
Freedom to trade
does not stifle healthy
competition,
availability of rare skill and
knowledge
Sufficient Pressure
Pao On v Lau Yiu Long
(1980) (P375)
Factors:
- Protest
- Realistic alternatives,
such as adequate legal
remedy
- Independently adviced
- Steps taken to avoid
Another steps added by
other case
-Response of victim;
victim must prove that he
had acted reasonably in
taking the other partys
threat seriously
OR
Illegitimate
Illegitimate all threats to
break a contract
Nature of Threat
- Unlawful act illegitimate
unless it is not acted in bad
faith (SharoncGlobal Solutions
Pte Ltd v LG International
Sinagepore Pte Ltd (2001))
- Lawful act illegitimate if
applied illegitimately
(blackmail)
Nature of Demand
- exploitative (bad faith) or
acting in good faith
Causation
But For test
Whether the illegitimate
threat is the significant
cause inducing the victim
to enter into the contract.
Huyton SA v Peter Cremer
GmbH & Co
Illegality
Duress
Undue Influence
Unconscionability
Unconscientious use of
ones power/authority over
another to acquire a
benefit or achieve a
purpose.
Nature of Relation
3 Requirements
- if plaintiff is poor & ignorant
- sale was considerable undervalue
- vendor had independent advice
Special Relation?
Yes
No
Transaction is
manifestly
disadvantageous
and
No
calls for
explanation
Royal Bank of
Scotland v Etridge
No
Yes
Influence
exercised
wrongfully?
No
Notice
Bank knows of the UI
(actual or constructive)
Constructive Notice of UI
Yes
Yes
Put on inquiry
Induced contract?
Presumed undue
influence
No
Yes
Class 1:
Undue Influence
(voidable)
Rebutted by
seeking
independent
legal advice?
Yes
Agency
Influential position
Valid
Special Relation
No
Class 2A presumes
Class 2:
No Undue
relationships to be of trust and
Influence Undue Influence confidence.
(voidable)
(e.g. parent/child,
guardian/ward, doc/patient,
lawyer/client,
trustee/beneficiary, religious
advisor/disciple)
Class 2B must be proven
(e.g. husband/wife,
employer/employee,
agent/principal, siblings)
Reasonable Steps
- Request to obtain
Husband/Wife:
Whenever Bank
independent advice.
knows that one
- Explain reason for
spouse has offered to
lawyers involvement
stand as surety for the
ie. So that the
debts of the other.
creditor may obtain
Others:
and rely on written
Whenever Banks
confirmation from the
knows that the
relationship of 2
legal advisor that the
parties are nonguarantor has been
commercial
properly advise.
- Explain that these
steps are for the
protection of creditor.
Misrepresentation
Refer to Chapter 14
Illegality
Misrepresentation
Undue Influence
Infection
One contracting
party to another
Duress
Vitiating Factors
Class 1
Presumed
Undue Influence
Creditor's rights
when there is
undue influence by
Debtor on Surety
Class 2
Contract can be
rescinded by victim
of undue influence
even if Creditor
was innocent
Subjective
Parent-child
Guardian-ward
Trustee-beneficiary
Doctor-patient
Lawyer-client
Director-company
Religious advisor-disciple
Relation of Trust
& Confidence
Manifestly
Disadvantageous
Transaction calls for
explanation if it is so
large as not to be
reasonably accounted for
on the ground of
friendship, relationship,
charity, or other ordinary
motives on which ordinary
men act
Agency
Creditor has
entrusted the guilty
party of undue
influence as its
agent
Inquiry
Agent-principle
Husband-wife
Employer-employee
Siblings
Rebutting
Presumption
Show how P acted freely and independently in
entering into contract:
- Seek independent advice from competent and
honest advisor with knowledge of all relevant
circumstances
- Advisor must advice Plaintiff as though acting
solely in the interest of the Plaintiff
Made statement:
Not believing it to be
true
Recklessly, not
caring if it is true or
not
Husband-Wife:
whenever bank
knows one spouse
offered to stand
surety for debts of
other
Other:
Whenever bank
knows relationship is
non-commercial
Negligence
Innocent
Honestly
Notice
Notice of the
wrongdoing
Construction
Class 2B
Fraudulent
Damages
Damages
Indemnity
Limitations
Actual
Burden of proof:
representor
Types of
Misrepresentation
Knowing it is untrue
Objective
Class 2A
Presumed relationship
automatically(relationship
of trust and confidence
does not need to be
proved):
Burden of proof:
representee
and
Reasonable
Reasonable steps:
rd
rd
- request guarantor to obtain legal 3 Party rights arose. Eg, sold goods to 3 Party Court
ordered
damages
instead
of
rescission
advice
- explain reason for lawyers
Exemption Clause
involvement (creditor can obtain
Exemption clause may exclude liability for misrep.
written confirmation that
guarantor is properly advice
S 3 of Misrep Act states clause is not enforceable unless it
- explain steps are for protection
passes test of reasonableness in UCTA
of creditor
Subject to normal rule of construction for exemption clause
Terminology
contingent dependant on
repudiatory breach refusal to perform a contractual obligation
Frustration
Terms of contract
E.g.. Term for termination by
employment by notice
Subsequent/
New Agreement
Must be supported by
consideration for release
All obligations must be fully
and precisely performed
Agreement
Discharge
Refer to Chapter 17
Breach
Actual
Performance
General Rule
4 Exceptions
Others
Performance
must be exact
& precise
Anticipatory
No performance
or defective
performance
when time to
perform arrive
Innominate
Non-Repudiatory
De Minimis Rule Severable Obligations Partial Performance
Accepted
Very hard to invoke,
Obligations separate &
will not be invoked for independent (based on
differences in
intention of parties).
measurement.
Entitled to payment for
obligation performed.
Difference in
performance is
microscopic, then it
will be ignored and
treated like no breach
at all
Substantial
Performance
Quatum meruit
If obligation is NOT
payment on
entire, and party in
contractual basis breach has substantially
expressed in contract performed, he can claim
that payment in return payment less cost to
for performance will be rectify but is still liable to
made in proportion to
damages
amt of work done. Or
Cutter and Powell
Sale of Goods Act
30(1)
Quatum meruit
payment on
restitutionary basis
only if party voluntarily
accepts partial work
Apportionment Act
Renunciation
Intention not to
perform obligation
due in future
Warranty
Non-Repudiatory
Repudiatory
Impossibility
Condition
Repudiatory
Election
Discharge
Affirm
Fixed Sum
No Cooperation
Contract
continues, treated
as no breach
Legitimate Interest
Must have Legitimate Interest
to affirm
White & Carter
If damages are sufficient
compensation, not allowed to
affirm the contract which wil
result in greater detriment to the
defaulting party
MP-Bilt Pte Ltd v Oey Widarto
Quantum Meruit
Refer to Chapter 16
Performance
Discharge
Breach
Frustration
Destruction of
subject matter
Death / Incapacity
Government
acquisition, etc
General
Impossibility
Classification
Limiting Factors
Choice of Contract
Radical Change
Delay, unavailability
Frustration
of Purpose
Negligence
Foreseeability
Impracticability,
increased costs
Method of
Performance
Frustration due to
party own conduct or
the conduct of those
for whom he is
responsible for
Unavailability
Failure of Source
of Supply
Effects
Aspects
Common Law
Future obligations
Released
Released
Accrued
obligations
Remain
Released
Sums paid
Not recoverable
Sums payable
Remain payable
No longer payable
Benefits /
Expenses
Not applicable
Recoverable
Discretionary
Remedies
Remedies
Right of Claim
Common Law
Remedies
Reasons: evidences
destroyed or tampered
with, pple die
Can be postponed if
Plaintiff was ignorant
about breach of
contract.
Construction of Clause:
Terms and words used are
not conclusive
Amount is extravagant
compared with the loss
from breach
Unliquidated
Damages
Quantification
of Loss
Expectation
Difference
in Value
Cost of Cure
Ruxley Electronics and
Construction Ltd v Forsyth
Injunction
Reliance
Can be claimed in addition to
Expectation Loss when there is no
double counting or as an alternative
to Expectation Loss
Other
Non-Pecuniary
Such as Indemnity or
Consequential
Loss
4 Steps
Equitable
Remedies
Specific
Performance
Liquidated
Damages
Test
Restitutionary
Remedies
1. Causation in fact
But for Test
Was the breach an effective
cause of the loss?
First Limb
Naturally arising damages
Based on imputed
knowledge or actual
knowledge of Defendant
2. Causation at law
Remoteness
3. Assessment
Hadley v Baxendale
Intent: Put innocent party in
Post Heron II
a position as though the
contract has been properly
Second Limb
performed
Losses reasonably
contemplated by parties when
k is made
Based on actual knowledge of
Defendant only
Exceptions
4. Mitigation
Chapter 6: Negligence
But-For test
Terminology
Causation
Singapores Stand
Prelim. Req.:
Treshold level of
Factual
Foreseeability
Proximity
Duty of Care
Public Policy
Negligence
Causation of
Damage/Loss
Breach of DOC
Concept of novus
actus interveniens
- if NAI breaks chain
of causation, Ds
breach would not be
regarded as cause
of Ps loss/damage
Material
Contribution test
Balance of probabilities of cause
(Not necessary for breach to be the
sole or dominant cause of
loss/damage)
If factual
Whether it will result in
foreseeability
Reasonable
imposing liability in an
Fail to Reach Standard of Care
Remoteness
and proximity is indeterminate amount for
Foreseeability
NORMALLY,
the
P
has
to
Expected of Him
established, a an indeterminate time to
prove that the D has been
Relates to the type of
prima face duty an indeterminate class of
negligent, i.e breached the
damage or injury which is
Mitigation
of care exists.
persons
NEED TO REFER TO
duty of care expected of
As physical damage is
foreseeable.
ANALOGOUS CASES
him!
foreseeable in (eg such
- D only liable to P in relation to
Eggshell skull rule
Res Ipsa Loquitur
Nervous Shock &
car accidents), it is not
losses suffered that are not
(P156) - Defendant must
readily
avoidable
by
P
necessary
for
P
to
show
Physical Damage/Injury &
Consequential Economic Loss
take victim as he finds
Let
facts
speak
for
themselves
that psychiatric injury is
- P cannot unreasonably inflate
Consequential Economic Loss
him. If victims prealso foreseeable in order
losses
&
seek
to
recover
such
Shift the burden of prove (of
existing weakness / hyperPsychiatric Illness
1) Donoghue v Stevenson (1932)
to recover for psychiatric
losses from D
breach) from plaintiff to defendant
sensitivity causes him to
injuries (P142)
2) TV Media v De Cruz Andrea Heidi
- It is Ds burden to show P
to prove that he is not negligent.
suffer greater injury,
(2004)
ought to have taken reasonable
Defendant is liable to full
Primary Victim
Secondary Victim
1)
Defendant
must
have
been
in
steps to mitigate
Pure Economic Loss due to
extent of injury.
control of the situation or thing
Page v Smith (1996) McCloughlin v OBrien (1983)
Negligent Misstatements
which resulted in the accident; and
Defense
3 Requirements:
1) Hedley Byrne v Heller (1964)
2) The cause of accident must be
Duty is imposed as
unknown
long as some form 1. Class of Persons close
DOC arises where there is a special
relationship taking into account the
of personal injury relationship (parent/child and
following factors:
husband/wife)
was foreseeable
Illegality
Complete Defense
Partial Defense
Limitation Period
flowing from the
Ds Level of Skill
Likelihood of Harm
Level of Skill
Std of care!
Likelihood Std
of care!
(Bolton v Stone(1951)
Seriousness of Harm
Seriousness
Std of
care!
(Paris v Stepney
Borough Council
(1951)