Notes of Commercial Law

Contr comports (C3, pg 58) Nature of decoct - good race consisting of the right and omens constituting an pact amid the parties that give distributively ships company a levelheaded profession to the separate and in any case the right to hear for breach of those duties - Consensus ad idem (meeting of minds) what the parties retard on moldinessiness be give happen and unambiguous and parties mustiness(prenominal) be ad idem. Wellmix Organics (International) Pte Ltd v Lau Yu Man (2006) , T2 Networks Pte Ltd v Nasioncom Sdn Bhd (2008) Types of Contracts Oral veers effect verbally compress provides march of the parties conjureual bargains. drumhead Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd (2006) Parol evidence rein = oral exam evidence non admissible to tote up to, vary, amend or contradict written obligation s 93-94 Evidence Act (refer to Terms) Engelin Teh Practice LLC v Wee Soon Kim Anthony (2004) . Offer (C3, pg 63) As the expression to a nonher(prenominal) of a pull up s deliversingness to be bound by stated cost. Invitation to treat (pg 64) An invitation to others to go along in into a negotiation which may eveningtually lead to the making of an unfold. An ad is view as invitations to treat. Auction without reservations (refer to Barry v Davis (2000) pg 5) (Offer = Bids do by audience, credenza = Auctioneer indicates bids yielded) Display of Goods pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952) the accost held that the presentation of goods with prices constitutes an invitation to treat. The rear is exactly do when a customer selects the item he wants and brings it to the cashier to pay for it. Reaffirmed by capital of Singapore High Court in Chwee Kin Keong & Others v Digilandmall com Pte Ltd (2004) Advertisements An ad is view as invitations to treat. partridge v Crittenden (1968) Provision of Information Harvey v Facey (1893 ) The administration held that thither was no contract because provision of cultivation was non an contri muchovere.Stevenson, Jacques & Co v McLean (1880) seek for more information is neither a forswearion nor have a bun in the ovenance, it was merely an enquiry. * canvass between propose and invitation to treat, must dig up why choose one over the other particularized Offeree An shot is an expression made by one caller to another(prenominal) caller. For an pass to be utile, the beseech must be communicated to the hug drugee. Unilateral Contracts A contract brought into c onception by the act of one society in response to a conditional hope by another. Harvela Investments Ltd v (involving completely one purple Trust Co of Canada (Cl) Ltd & Ors (1984)No transform of promise, save 1 promise (made by suggestor). expression) Offeree makes no promise, only performs conditions prone to base on ballsors promise. Carlill v Carbolic dirty dog en Co. (1892) Where (pg 63) advertisement contains a promise in rejoinder for an act, an bear is mean. (No general rule that an ad cannot be an commotion. Bi-lateral Contracts An organization where one party makes a promise to the other party. (involving on 2 side There argon duties, rights and conditions on both parties. In other words, performance of the conditions is an betrothal of the or both) offer and this bridal should be notified. Termination of Offer (Pg 75) (5 ways) Withdrawal lawfulness Offer can be go bad back or revoked by the offerer at any succession before it is real. (When an offer is withdrawn, the offer is utter to be revoked). oversea Union indemnification Ltd v Turegum Insurance Co (2001) Law Withdrawal must be communicated to offeree (Revocation is only effective when the offeree receives notice of the revocation) Byrne v avant-garde Tienhoven (1880) It was held that the revocation was not effective until it was acquire by the plaintif f. Since the offer was accepted preliminary to the revocation, there was a legitimate contract. Law Revocation of offer can be communicated by a third party (as long as offeree obtains knowledge of the revocation) (must be a reliable and trustworthy source) Dickinson v Dodds (1876) Law tonic Offer (Revocation can also occer if the offer is re hindquartersd by a wise offer) Ban Paribas v Citibank NA (1989) Law Offer is opened for a fixed closure Routledge v Grant (1828) Rationale is that an offeree cannot go for an offerors promise to solemnize his offer open unless there is separate contract support by rumination to do so, such contracts are called options Tay Joo Sing v Ku Yu Sang essentially a promise, supported by precondition, to keep an offer open for a specific geological period of epoch indoors which to decide whether or not to come in into the purchase of agreement. Law Unilateral Contracts Abbot v fling (1860), it was held that the offeror cannot withdraw his offer once the offeree has started to act. Dickson work(s) Pte Ltd v Transmarco Ltd (1989), obiter dictum, the offeror in a unilateral contract has an obligation not to revoke the offer aft(prenominal) the offeree has involved in the performance of the conditions. Lapse of date word meaning after specific period which offeror states that his offer is open = Ineffective If the offer is opened for a condition period, a purported adoption after that period would not be effective since the offer had lapsed. the philander may imply that the offeror has specified the period of offer even if he has not through so expressly. Wee Ah Lian v Teo Siak Weng (1992) - however, if it is clear from the offerors continue and other evidence that the depots of the supposedly lapsed offer continue to govern their kinship after the specified period, consequently it is still valid and acceptable after the deadline. Panwell Pte Ltd & Anor v Indian Bank (No2) (2002) When no specified period of time is expressed, an offer would lapse after a middling amount of time, (depending on the accompaniments of the grimace). Ramsgate Victoria Hotel Co v Montefiore (1866) the court held that Montefiore could refuse to fuck off up the shares because his offer had lapsed after a reasonable time. Failure of Offer automatically interceptd if condition not met Condition An offer may terminate on the occurrence of a specified event if the offer is subjected to the condition that it forget do. e. g. erminate if goods are discredited before credenza, subject to the approval of my lawyer Financings Ltd v Stimson (1962) Death Dickinson v Dodds( if the man who makes an offer dies, the offer cannot be accepted after he is dead. Reynolds v Atherton (1921)( Offeree dies before bridal, this offer cease to be unresolved of acceptance. Bradbury v Morgan (1862)( the court held that the death of an offeror did not terminate the offer unless the offeree had notice of the offerors death. 2. Acceptance (C3, pg 67) Indication by the offeree of his take to the offer and his goal to form a contract base on the exact terms of the offer - Whatever its form, a communication constitutes acceptance only if it is an flavorless expression of assent to the terms of offer.Compaq calculating machine Asia Pte Ltd v Computer Interface(s) Pte Ltd (2004) - Conditional Acceptance is treated as no acceptance. Struttgart Auto Pte Ltd v Ng Shwu Yong (2005) - Accepts sellers offer subject to a written contract drafted Thmoas Plaza (Pte) Ltd v Liquidators of Yaohan departmental Store Singapore Pte Ltd (in liquidation) (2001) - Agreenment shall not be final and ski binding agreement Cendekia Candranegara Tjiang v Yin Kum Choy & Others (2002) Brogden v metropolitan Railway Co. 1877) The Court held that the facts and actual conduct of the parties, established the existence of a contract, and there having a clear breach of it, Brogden must be held liable upon it. Law Acceptance of unilateral contract is when all the terms of the contract are fully performed Carlill v Carbolic warmer Ball Co. (1892) Counter Offeree introduces a new term or varies the terms of an offer (original offeror is free to accept or reject the regaining offer) Hyde v Wrench Offer (1840) The court held that there was no contract because Hydes reply was a counter offer which extinguished the earlier offer.When the response is an doubtfulness or a request of information, it should not be construed as an offer KnowledgeLaw Offeree cannot accept in ignorance of the law of Offer offeree must be aware of the offer Fitch v Snedaker (1868) and R v Clarke (1927) As long as offeree has knowledge of offer, motive is strange. in one case the offeree is aware of the offer, it does not division that he was prompted to act for reasons other than the go for to accept the offer.William v Carwardine (1833) the court held that the plaint iff was entitled to a takings, she had done so with knowledge of the reward even though her motive for giving the information was her cause remorse. Cross-offer Do not constitute to agreement/contract lack of consensus / meeting of minds between parties at the time of making offer. Tinn v Hoffman & Co (1873) Communica oecumenic direct Acceptance must be communicated (Acceptance must rattling be received by the offeror) tion of Acceptance effective when communicated/received by offeror. AcceptancIf in writing, it must be physically received by the offeror, and if orally, perceive by the offeror. Acceptance must be monotonic and absolute. e obiter dictum in Entores Ltd v Miles far-off East corporationoration (1955) and CS Bored Pile organization Pte Ltd v Evan hunt &Co Pte Ltd (2006) Powell v Lee (1908) Held that there was no authorized communication of purpose to contract on part of the automobile trunk accordingly no contract. Silence Silence is only a form of acceptance if both parties agree to it. Silence of the offeree would not constitute a valid acceptance Felthouse v Bindley (1862)held that there was no contract between the two parties. The plaintiff had no right to inspect a condition that a cut-rate sale contract would come into existence if the defendant remained silent. Exemption case Both parties agree that the offeree would have a positive obligation to communication only if he wished to reject the offer. Albeit rare in practice, silence is properly be construed as acceptance Southern Ocean ship building Co Pte Ltd v Deutsche Bank AG (1993) and Midlink Development Pte Ltd v The Stansfield Group Pte Ltd (2004) defendants conduct of paying the reduced rent showed that a contact exists. InstantanTime of acceptance is the time at which the acceptance is communicated to the offeror eous Ithe acceptance will take effect when and where it is received, acceptance must be absolute and unconditional Entores v Miles Far East Corp Communica(1955) tions - if got designated info system reception when e-record entered the designated info system. Emails, Fax, Telex - if got designated info system but sent elsewhere and then is receipt upon retrieval. - if no designated info system receipt upon entering any info system of addressee. ExceptionThe Postal Rule (ONLY FOR LETTERS OF ACCEPTANCE ) s - Quenerduaine v Cole (1883) telegram government agency speedy reply not attracted by placemental rule.Offeror will consider that it is only valid acceptance when physically received. - Agreement cannot be withdrawn once the post is sent out. Henthorn v Fraser (1892) - Acceptance deemed effective as soon as the letter is stick on disregarding as to when it reaches the offeror or whether it reaches him at all. Adams v Lindsell (1818) - the court held that the acceptance was communicated and the contract was formed as soon as the plaintiff posted the acceptance letter. Lee Seng Heng v Gu ardian Assurance CO Ltd (1932) Waiver of Communication facts show that the offeror has waived the need for communiation of acceptance when offer made to whole creative activity (unilateral contract anyone can accept) Calill v Carbolic Smoke Ball. ( the doing of the act by the offeree may itself be constructed as acceptance, without requiring ballock communication to the offeror. Termination of acceptance Once posted, an acceptance cannot be revoked. Wenkheim v Arndt (1873) 3. favor (C4, Pg 85) Two briny Rules on Consideration Must move from promisee but need not move to promiser.Tweedle v Atkinson (1861) carry not be adequate but must be fitting. Chappell & Co Ltd v Nestle Co Ltd (1960) Is what each party gives to the other as the agreed price for the others promise distress to one OR Benefit to another But it need not move to the promisor Malayan Banking Bhd v Lauw Wisanggeni A third party who is a stranger to the contract may returns from the contract alth ough he may not follow through it. Need not be adequate but must be fit Law will not interfere with parties contract so long as good will is of both(prenominal) value in the eyes of the law. In order for a promise to be lend oneselfable in court, attachment must first be given (exchange of promises would be sufficient consideration) Dunlop v Selfridge (1915) aside Consideration is Refers to an act performed prior to and to that extent independent of, the promises being exchanged (act performed without the not valid reciprocal promise in mind). Past consideration is no consideration The court held that the promise was made after the trans put through had already been reason and therefore past consideration.Roscorla v Thomas (1842) and Teo Song Kwang (alias Richard) v Gnau Lye Chan and Another (2006) To become executed consideration Pao On v Lau Yiu Long (1980) and Sim Tony v Ah Ghee (t/a Phil actually Estate &Building Services) (1995) Act done at promisors re quest If the promisor has previously asked the other party to provide goods or services, then a promise made after they are provided will be treated as binding. Contract must otherwise be follow upable make in biz context and it is all the way understood by both sides that it will be gainful for then valid.Re Caseyss Patent v Casey (1892) held the request to Casey to manage the patent carried an implied promise to pay for that service, hence it was compelable. Consideration must moveThe only someone who can fulfil for breach of contract must be the party who has given consideration (promise) Tweedle v Atkinson from the promisee (1861) the court held that Tweedle could not enforce the contract between the two fathers because foremost he is not a party of the contract, and secondly, no consideration flowed from him. Consideration need not move to the promisor 3rd party can may benefit although may not enforce it. Malayan Banking Bhd v Lauw Wisanggeni Suffi cient, - Law will not inquire to the integrity of consideration, as long as the parties agree to it willingly Lam Hong Leong Aluminium Need not be Adequate Pte Ltd v Lian Teck Huat Consruction Pte Ltd and Another (2003) sufficiency of - Law does not measure value (once the subject of exchange is recognized in law as suitable consideration, quantity is irrelevant) Consideration - Swiss Singapore Overseas Enterprise Pte Ltd v Navalmar UK Ltd (No2) (2003) and Chappell & Co Ltd v Nestle Co Ltd (1960) the consideration included the wrappers even though they were of no value to Nestle. Thomas v Thomas (1842) The court held that the nominal rent was sufficient consideration but the husbands wishes were irrelevant motive is not the same thing as consideration. enough of A promise not to enforce a Claim is Good Consideration Promise not to carry out or enforce a valid engage or settlement of juristic act = Consideration sufficient consideration Lam Hong Leong Aluminium Pte Ltd v Lian Teck Huat Consruction Pte Ltd and Another (2003) and Alliance Bank Ltd v ling ko (1864) Normally, banks would not promise to enforce debt but is not done here. For not suing, considerations shown ( binding agreement to provide security. Sufficient Forbearance to sue A promise to forbear from suing or enforcing a valid claim can constitute sufficient or valuable consideration. Alliance Bank Ltd v Broom (1864).K-Rex Finance Ltd v Cheng Chih Cheng (1993) The court radius the words of Cockburn CJ in Callisher v Bischoffsheim (1870). The same applies to a agree of a legal swear out. The req. is that the legal doing must be reasonable and not frivolous, that the claimant has an honest impression that in the chance of success of the claim and that the claimant has not concealed from the other party any fact which, to the claimants knowledge, might affect its validity.Miles v New Zealand Alford Estate Co (1886) proceeding of The Eurymedon (1975) The Privy Council held that even though the defendant was already contractually bound animate contractual to a third party to do so, the defendants act of unloading the ship formed good consideration for the traffic to third party contract with the plaintiff. This was also clarified in Pao On v Lau Yiu Long (1980) by the HOL. This was also accepted in the Singapore High Court in SSAB Oxelosund AB v Xendral Trading Pte Ltd (1992). Moral obligation & Eastwood v Kenyon (1840) The court rejected the plaintiffs view and held that moral obligation is motives insufficient consideration for a fresh promise. Insufficient Vague or insubstantialWhite v Bluett (1853) The court held that Bluetts promise was zip fastener more than a promise not to bore consideration his father. As such it was too vague(fake) and was insufficient consideration for the alleged come off by his father. Performance of Collins v Godefroy (1831) Performance of an exist humanity duty is not valid co nsideration. existing public duty Glassbrook Bros Ltd v Glamorgan City Council (1925)- If the court finds the promisee did something more that required by an existing public duty, then it may be sufficient. Performance of Stilk v Myrick (1809) It was held that there was no consideration for the captains promise because the existing contractual remaining confederacy did what they were contractually required. Two sailors deserting were within the usual duty emergencies prove in such a voyage. However, if it is more than what is contractually required, that may constitute good consideration Hartley v Ponsonby (1857) and Williams v Roffey Bros (1991) The English Court of ingathering held that as long as the extra payment was not given under duress or fraud, the oral promise was enforceable because the defendant obtained practical benefits from the plaintiffs work. The benefit was that they would not be liable under the main contract for late completion. Rule in Pinnels Case Pinnels case is authority for the proposition that payment of a lesser sum without anything extra is not a good consideration. - It would be good consideration provided with a deliver (can be anything, even time) is given as the gift might be more beneficial than the money. -But if the person asks me pay lesser, then cannot sue. If I accepted a smaller amount, after that I decided to sue again, CAN Provided no gift Pinnels Case (1602) The part payment of a debt does not discharge the entire debt unless the part payment was made at the request of the creditor and the payment was made earlier, at a different place, or in alignment with some other valuable consideration.Foakes v Beer (1884) affirmed Pinnels Case the HOL held that Beers promise not to take further action was not supported by consideration. She could claim the money. ( in Euro-Asia Realty Pte Ltd v Mayfair Investment Pte Ltd (2001), District Court in Singapore endorsed th e rule in Foakes v Beer and held favor in creditor. Promissory Estoppel is an equitable doctrine whose origin may be traced to Lord Cairns in Hughes v metropolitan Railway Co (1877). When p. e. is established, the court may enforce a promise despite the fact that there was no consideration. Central London situation Trust v High Trees House Ltd (1947) Elements (Central London Property Trust v High Trees House Ltd (1947) and D&C Builders v Rees (1966)) 1)Parties must have existing legal relationship 2)Clear and unequivocal promise which affects the legal relationship 3)Promisee relied upon promise and altered his position 4)Inequitable for the promisor to go back on his promise. Promissory Estoppel Cause of action (For no consideration) When the promisor gives reasonable notice of his intention to revert to the original legal relationship, the original relationship is restored. The effect of p. e. is to suspend promisors rights temporarily.Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (1995) However, the promise could become final and irrevocable if the promisee cannot resume his position. Ajayi v R T Briscoe (Nigeria) Ltd (1964) A protective tool This means that it can only be raised as a rampart and not a brand, i. e. a defense against a claim and not to commence a suit.Combe v Combe (1951) (people sue you then can use ) Assoland face Pte Ltd v Malayan credit entry Properties Pte Ltd (1993) and Lai Yew Tay Pte Ltd v Pilecon Engineering BHd (2002) 4. aspiration to Create Legal Relations (Pg 17) The discharge is whether a reasonable person viewing all the serving of the case would consider that the promisor intended his promise to have legal consequences. objective test (objectively ascertained) loving and General self-confidence = no legal intention Domestic Balfour v Balfour (1919) and Jones v Padavatton (1969) An agreement is not legally binding unless the parties intend that each will Agreement s accept the lefal consequences for its breach. Choo Tiong Hin v Choo Hock Swee (1959) the plaintiffs promises were not enforceable because the lack of intention to create legal relations. De Cruz Andrea Heidi v Guangzhou Yuzhitang Health Products Co Ltd and Others (2003) -Friend doing a favor even though whodunit profit or commission is earned. However in Merritt v Merritt (1970) and Wakeling v Ripley The English Court of solicitation constitute the necessary intention and held that the wife succeeded in her claim for breach of contract. Commercial General presumption = Legal intention Agreements - There is necessary intention to create legal relations. Edwards v Skyway Ltd (1964) The court held that Skyways was legally bound. Binding but unenforceable Honour Clauses When parties have expressly stated that their agreement is not to be legally binding. Rose &Frank Co v J R Crompton &Bros Ltd (1925) Exceptions (not legally binding) earn of Comfort (pg 17) ( may be binding depending on its terms usually a document supplied by a 3rd party to a creditor indicating a associate to ensure that a debtor meets his obligations to the creditor. Kleinwort Benson Ltd v Malaysian Mining Corporation Berhad (1989) Court only found a moral not legal obligation. refer to pg 17) Letter of Intent (LOI) (pg 17) A device by which one indicates to another of his intention to enter into a contract with him E. g. a main contractor is prearing a tender and he plans to subcontract some of the work. Privity of Contract (Pg 105) The general rule is that no one, other than a person who is a party to the contract may be entitled to enforce or be bound by the terms of the contract. outlay v Easton (1833) court held that Price could not succeed, as he was not a party to the contract between the debtor and the Easton.Management Corporation Strata Title Plan No 2297 v Seasons Park Ltd (2005) Exceptions (Thai Kenaf Co Ltd v Keck Seng (S) Pte Ltd (19 93) Agency relationship Assignment of choses in action consent of 3 parties Letter of Credit Agreement Intention to create legal relations Consideration Is it an offer? Define offer Is there any intention? Is it revocation? Via broadcast? Was the offer efficaciously revoked? Is the agreement legally bind (To place under legalIs Consideration need to be sufficient but not Is it valid acceptance?Communicated obligation by contract)? adequate? Third partys conversation? Is the agreement reached in a business context? Promissory Estoppel? Talk about the elements, sword Postal rude? (eg. Family, friends) or shield? Is there any provision of information? Is it (social and domestic) or moneymaking(prenominal) Is the consideration moved from promisee? Any counter offer? agreement? Is the offeree aware of offer with motive? Is the offer lapse? Notes of Commercial LawContracts (C3, pg 58) Nature of contract - Legal relationship consisting of the right and promises constituting an agreement between the parties that give each party a legal duty to the other and also the right to seek for breach of those duties - Consensus ad idem (meeting of minds) what the parties agree on must be clear and unambiguous and parties must be ad idem. Wellmix Organics (International) Pte Ltd v Lau Yu Man (2006) , T2 Networks Pte Ltd v Nasioncom Sdn Bhd (2008) Types of Contracts Oral contracts Written contract provides evidence of the parties contractual obligations. Forefront Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd (2006) Parol evidence rule = oral evidence not admissible to add to, vary, amend or contradict written contract s 93-94 Evidence Act (refer to Terms) Engelin Teh Practice LLC v Wee Soon Kim Anthony (2004) . Offer (C3, pg 63) As the expression to another of a willingness to be bound by stated terms. Invitation to treat (pg 64) An invitation to others to enter into a negotiation which may eventually lead to the making of an offer. An ad is view as invitations to treat. Auction without reservations (refer to Barry v Davis (2000) pg 5) (Offer = Bids made by audience, Acceptance = Auctioneer indicates bids accepted) Display of Goods Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952) the court held that the display of goods with prices constitutes an invitation to treat. The offer is only made when a customer selects the item he wants and brings it to the cashier to pay for it. Reaffirmed by Singapore High Court in Chwee Kin Keong & Others v Digilandmall com Pte Ltd (2004) Advertisements An ad is view as invitations to treat. Partridge v Crittenden (1968) Provision of Information Harvey v Facey (1893) The court held that there was no contract because provision of information was not an offer.Stevenson, Jacques & Co v McLean (1880) Seeking for more information is neither a rejection nor acceptance, it was merely an enquir y. *compare between offer and invitation to treat, must prove why choose one over the other Specific Offeree An offer is an expression made by one party to another party. For an offer to be effective, the offer must be communicated to the offeree. Unilateral Contracts A contract brought into existence by the act of one party in response to a conditional promise by another. Harvela Investments Ltd v (involving only one Royal Trust Co of Canada (Cl) Ltd & Ors (1984)No exchange of promise, only 1 promise (made by offeror). side) Offeree makes no promise, only performs conditions attached to offerors promise. Carlill v Carbolic Smoke Ball Co. (1892) Where (pg 63) advertisement contains a promise in return for an act, an offer is intended. (No general rule that an ad cannot be an offer. Bi-lateral Contracts An agreement where one party makes a promise to the other party. (involving on 2 side There are duties, rights and considerations on both parties. In other words, performan ce of the conditions is an acceptance of the or both) offer and this acceptance should be notified. Termination of Offer (Pg 75) (5 ways) Withdrawal Law Offer can be withdrawn or revoked by the offeror at any time before it is accepted. (When an offer is withdrawn, the offer is said to be revoked). Overseas Union Insurance Ltd v Turegum Insurance Co (2001) Law Withdrawal must be communicated to offeree (Revocation is only effective when the offeree receives notice of the revocation) Byrne v Van Tienhoven (1880) It was held that the revocation was not effective until it was received by the plaintiff. Since the offer was accepted prior to the revocation, there was a valid contract. Law Revocation of offer can be communicated by a third party (as long as offeree obtains knowledge of the revocation) (must be a reliable and trustworthy source) Dickinson v Dodds (1876) Law Fresh Offer (Revocation can also occer if the offer is replaced by a fresh offer) Ban Paribas v Citib ank NA (1989) Law Offer is opened for a fixed period Routledge v Grant (1828) Rationale is that an offeree cannot enforce an offerors promise to keep his offer open unless there is separate contract supported by consideration to do so, such contracts are called options Tay Joo Sing v Ku Yu Sang essentially a promise, supported by consideration, to keep an offer open for a specific period of time within which to decide whether or not to enter into the purchase of agreement. Law Unilateral Contracts Abbot v Lance (1860), it was held that the offeror cannot withdraw his offer once the offeree has started to act. Dickson Trading(s) Pte Ltd v Transmarco Ltd (1989), obiter dictum, the offeror in a unilateral contract has an obligation not to revoke the offer after the offeree has involved in the performance of the conditions. Lapse of time Acceptance after specific period which offeror states that his offer is open = Ineffective If the offer is opened for a specified p eriod, a purported acceptance after that period would not be effective since the offer had lapsed. the court may imply that the offeror has specified the period of offer even if he has not done so expressly. Wee Ah Lian v Teo Siak Weng (1992) - however, if it is clear from the offerors conduct and other evidence that the terms of the supposedly lapsed offer continue to govern their relationship after the specified period, then it is still valid and acceptable after the deadline. Panwell Pte Ltd & Anor v Indian Bank (No2) (2002) When no specified period of time is expressed, an offer would lapse after a reasonable amount of time, (depending on the facts of the case). Ramsgate Victoria Hotel Co v Montefiore (1866) the court held that Montefiore could refuse to take up the shares because his offer had lapsed after a reasonable time. Failure of Offer automatically end if condition not met Condition An offer may terminate on the occurrence of a specified event if the offer is subjected to the condition that it will do. e. g. erminate if goods are damaged before acceptance, subject to the approval of my lawyer Financings Ltd v Stimson (1962) Death Dickinson v Dodds( if the man who makes an offer dies, the offer cannot be accepted after he is dead. Reynolds v Atherton (1921)( Offeree dies before acceptance, this offer cease to be capable of acceptance. Bradbury v Morgan (1862)( the court held that the death of an offeror did not terminate the offer unless the offeree had notice of the offerors death. 2. Acceptance (C3, pg 67) Indication by the offeree of his consent to the offer and his intention to form a contract based on the exact terms of the offer - Whatever its form, a communication constitutes acceptance only if it is an unconditional expression of assent to the terms of offer.Compaq Computer Asia Pte Ltd v Computer Interface(s) Pte Ltd (2004) - Conditional Acceptance is treated as no acceptance. Struttgart Auto Pte Ltd v Ng Shwu Yo ng (2005) - Accepts sellers offer subject to a written contract drafted Thmoas Plaza (Pte) Ltd v Liquidators of Yaohan Departmental Store Singapore Pte Ltd (in liquidation) (2001) - Agreenment shall not be final and binding agreement Cendekia Candranegara Tjiang v Yin Kum Choy & Others (2002) Brogden v Metropolitan Railway Co. 1877) The Court held that the facts and actual conduct of the parties, established the existence of a contract, and there having a clear breach of it, Brogden must be held liable upon it. Law Acceptance of unilateral contract is when all the terms of the contract are fully performed Carlill v Carbolic Smoke Ball Co. (1892) Counter Offeree introduces a new term or varies the terms of an offer (original offeror is free to accept or reject the counter offer) Hyde v Wrench Offer (1840) The court held that there was no contract because Hydes reply was a counter offer which extinguished the earlier offer.When the response is an inquiry or a request of information, it should not be construed as an offer KnowledgeLaw Offeree cannot accept in ignorance of the law of Offer offeree must be aware of the offer Fitch v Snedaker (1868) and R v Clarke (1927) As long as offeree has knowledge of offer, motive is irrelevant. Once the offeree is aware of the offer, it does not matter that he was prompted to act for reasons other than the desire to accept the offer.William v Carwardine (1833) the court held that the plaintiff was entitled to a reward, she had done so with knowledge of the reward even though her motive for giving the information was her own remorse. Cross-offer Do not constitute to agreement/contract lack of consensus / meeting of minds between parties at the time of making offer. Tinn v Hoffman & Co (1873) CommunicaGeneral Rule Acceptance must be communicated (Acceptance must actually be received by the offeror) tion of Acceptance effective when communicated/received by offeror. AcceptancIf in writing, it mu st be physically received by the offeror, and if orally, heard by the offeror. Acceptance must be unconditional and absolute. e obiter dictum in Entores Ltd v Miles Far East Corporation (1955) and CS Bored Pile System Pte Ltd v Evan Lam &Co Pte Ltd (2006) Powell v Lee (1908) Held that there was no authorized communication of intention to contract on part of the body hence no contract. Silence Silence is only a form of acceptance if both parties agree to it. Silence of the offeree would not constitute a valid acceptance Felthouse v Bindley (1862)held that there was no contract between the two parties. The plaintiff had no right to impose a condition that a sale contract would come into existence if the defendant remained silent. Exemption case Both parties agree that the offeree would have a positive obligation to communication only if he wished to reject the offer. Albeit rare in practice, silence is properly be construed as acceptance Southern Ocean Shipbuilding Co Pte L td v Deutsche Bank AG (1993) and Midlink Development Pte Ltd v The Stansfield Group Pte Ltd (2004) defendants conduct of paying the reduced rent showed that a contact exists. InstantanTime of acceptance is the time at which the acceptance is communicated to the offeror eous Ithe acceptance will take effect when and where it is received, acceptance must be absolute and unconditional Entores v Miles Far East Corp Communica(1955) tions - if got designated info system receipt when e-record entered the designated info system. Emails, Fax, Telex - if got designated info system but sent elsewhere then is receipt upon retrieval. - if no designated info system receipt upon entering any info system of addressee. ExceptionThe Postal Rule (ONLY FOR LETTERS OF ACCEPTANCE ) s - Quenerduaine v Cole (1883) telegram means speedy reply not attracted by postal rule.Offeror will claim that it is only valid acceptance when physically received. - Agreement cannot be withdrawn once the p ost is sent out. Henthorn v Fraser (1892) - Acceptance deemed effective as soon as the letter is posted regardless as to when it reaches the offeror or whether it reaches him at all. Adams v Lindsell (1818) - the court held that the acceptance was communicated and the contract was formed as soon as the plaintiff posted the acceptance letter. Lee Seng Heng v Guardian Assurance CO Ltd (1932) Waiver of Communication facts show that the offeror has waived the need for communiation of acceptance when offer made to whole world (unilateral contract anyone can accept) Calill v Carbolic Smoke Ball. ( the doing of the act by the offeree may itself be constructed as acceptance, without requiring formal communication to the offeror. Termination of acceptance Once posted, an acceptance cannot be revoked. Wenkheim v Arndt (1873) 3. Consideration (C4, Pg 85) Two Main Rules on Consideration Must move from promisee but need not move to promisor.Tweedle v Atkinson (1861) Need not be adequate but must be sufficient. Chappell & Co Ltd v Nestle Co Ltd (1960) Is what each party gives to the other as the agreed price for the others promise Detriment to one OR Benefit to another But it need not move to the promisor Malayan Banking Bhd v Lauw Wisanggeni A third party who is a stranger to the contract may benefit from the contract although he may not enforce it. Need not be adequate but must be sufficient Law will not interfere with parties contract so long as consideration is of some value in the eyes of the law. In order for a promise to be enforceable in court, consideration must first be given (exchange of promises would be sufficient consideration) Dunlop v Selfridge (1915) Past Consideration is Refers to an act performed prior to and to that extent independent of, the promises being exchanged (act performed without the not valid reciprocal promise in mind). Past consideration is no consideration The court held that the promise was made after the tr ansaction had already been concluded and therefore past consideration.Roscorla v Thomas (1842) and Teo Song Kwang (alias Richard) v Gnau Lye Chan and Another (2006) To become executed consideration Pao On v Lau Yiu Long (1980) and Sim Tony v Ah Ghee (t/a Phil Real Estate &Building Services) (1995) Act done at promisors request If the promisor has previously asked the other party to provide goods or services, then a promise made after they are provided will be treated as binding. Contract must otherwise be enforceable Done in biz context and it is clearly understood by both sides that it will be paid for then valid.Re Caseyss Patent v Casey (1892) held the request to Casey to manage the patent carried an implied promise to pay for that service, hence it was enforceable. Consideration must moveThe only person who can sue for breach of contract must be the party who has given consideration (promise) Tweedle v Atkinson from the promisee (1861) the court held that Tw eedle could not enforce the contract between the two fathers because firstly he is not a party of the contract, and secondly, no consideration flowed from him. Consideration need not move to the promisor 3rd party can may benefit although may not enforce it. Malayan Banking Bhd v Lauw Wisanggeni Sufficient, - Law will not inquire to the fairness of consideration, as long as the parties agree to it willingly Lam Hong Leong Aluminium Need not be Adequate Pte Ltd v Lian Teck Huat Consruction Pte Ltd and Another (2003) Adequacy of - Law does not measure value (once the subject of exchange is recognized in law as suitable consideration, quantity is irrelevant) Consideration - Swiss Singapore Overseas Enterprise Pte Ltd v Navalmar UK Ltd (No2) (2003) and Chappell & Co Ltd v Nestle Co Ltd (1960) the consideration included the wrappers even though they were of no value to Nestle. Thomas v Thomas (1842) The court held that the nominal rent was sufficient consideration but t he husbands wishes were irrelevant motive is not the same thing as consideration. Sufficiency of A promise not to enforce a Claim is Good Consideration Promise not to sue or enforce a valid claim or settlement of legal action = Consideration sufficient consideration Lam Hong Leong Aluminium Pte Ltd v Lian Teck Huat Consruction Pte Ltd and Another (2003) and Alliance Bank Ltd v Broom (1864) Normally, banks would not promise to enforce debt but is not done here. For not suing, considerations shown ( binding agreement to provide security. Sufficient Forbearance to sue A promise to forbear from suing or enforcing a valid claim can constitute sufficient or valuable consideration. Alliance Bank Ltd v Broom (1864).K-Rex Finance Ltd v Cheng Chih Cheng (1993) The court spoke the words of Cockburn CJ in Callisher v Bischoffsheim (1870). The same applies to a compromise of a legal action. The req. is that the legal action must be reasonable and not frivolous, that the claima nt has an honest belief that in the chance of success of the claim and that the claimant has not concealed from the other party any fact which, to the claimants knowledge, might affect its validity.Miles v New Zealand Alford Estate Co (1886) Performance of The Eurymedon (1975) The Privy Council held that even though the defendant was already contractually bound existing contractual to a third party to do so, the defendants act of unloading the ship formed good consideration for the duty to third party contract with the plaintiff. This was also clarified in Pao On v Lau Yiu Long (1980) by the HOL. This was also accepted in the Singapore High Court in SSAB Oxelosund AB v Xendral Trading Pte Ltd (1992). Moral obligation & Eastwood v Kenyon (1840) The court rejected the plaintiffs view and held that moral obligation is motives insufficient consideration for a fresh promise. Insufficient Vague or insubstantialWhite v Bluett (1853) The court held that Bluetts promise was nothing more than a promise not to bore consideration his father. As such it was too vague(fake) and was insufficient consideration for the alleged discharge by his father. Performance of Collins v Godefroy (1831) Performance of an existing public duty is not valid consideration. existing public duty Glassbrook Bros Ltd v Glamorgan City Council (1925)- If the court finds the promisee did something more that required by an existing public duty, then it may be sufficient. Performance of Stilk v Myrick (1809) It was held that there was no consideration for the captains promise because the existing contractual remaining crew did what they were contractually required. Two sailors deserting were within the usual duty emergencies found in such a voyage. However, if it is more than what is contractually required, that may constitute good consideration Hartley v Ponsonby (1857) and Williams v Roffey Bros (1991) The English Court of Appeal held that as long as the extra payment was not given under duress or fraud, the oral promise was enforceable because the defendant obtained practical benefits from the plaintiffs work. The benefit was that they would not be liable under the main contract for late completion. Rule in Pinnels Case Pinnels case is authority for the proposition that payment of a lesser sum without anything extra is not a good consideration. - It would be good consideration provided with a gift (can be anything, even time) is given as the gift might be more beneficial than the money. -But if the person asks me pay lesser, then cannot sue. If I accepted a smaller amount, after that I decided to sue again, CAN Provided no gift Pinnels Case (1602) The part payment of a debt does not discharge the entire debt unless the part payment was made at the request of the creditor and the payment was made earlier, at a different place, or in conjunction with some other valuable consideration.Foakes v Beer (1884) affirmed Pinnels Case the HOL held that Beers promise not to take further action was not supported by consideration. She could claim the money. ( in Euro-Asia Realty Pte Ltd v Mayfair Investment Pte Ltd (2001), District Court in Singapore endorsed the rule in Foakes v Beer and held favor in creditor. Promissory Estoppel is an equitable doctrine whose origin may be traced to Lord Cairns in Hughes v Metropolitan Railway Co (1877). When p. e. is established, the court may enforce a promise despite the fact that there was no consideration. Central London Property Trust v High Trees House Ltd (1947) Elements (Central London Property Trust v High Trees House Ltd (1947) and D&C Builders v Rees (1966)) 1)Parties must have existing legal relationship 2)Clear and unequivocal promise which affects the legal relationship 3)Promisee relied upon promise and altered his position 4)Inequitable for the promisor to go back on his promise. Promissory Estoppel Cause of action (For no consideration) When the promisor gives reasonable notice of his intention to revert to the original legal relationship, the original relationship is restored. The effect of p. e. is to suspend promisors rights temporarily.Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (1995) However, the promise could become final and irrevocable if the promisee cannot resume his position. Ajayi v R T Briscoe (Nigeria) Ltd (1964) A defensive tool This means that it can only be raised as a shield and not a sword, i. e. a defense against a claim and not to commence a suit.Combe v Combe (1951) (people sue you then can use ) Assoland Construction Pte Ltd v Malayan Credit Properties Pte Ltd (1993) and Lai Yew Tay Pte Ltd v Pilecon Engineering BHd (2002) 4. Intention to Create Legal Relations (Pg 17) The test is whether a reasonable person viewing all the circumstances of the case would consider that the promisor intended his promise to have legal consequences. obj ective test (objectively ascertained) Social and General presumption = no legal intention Domestic Balfour v Balfour (1919) and Jones v Padavatton (1969) An agreement is not legally binding unless the parties intend that each will Agreements accept the lefal consequences for its breach. Choo Tiong Hin v Choo Hock Swee (1959) the plaintiffs promises were not enforceable because the lack of intention to create legal relations. De Cruz Andrea Heidi v Guangzhou Yuzhitang Health Products Co Ltd and Others (2003) -Friend doing a favor even though secret profit or commission is earned. However in Merritt v Merritt (1970) and Wakeling v Ripley The English Court of Appeal found the necessary intention and held that the wife succeeded in her claim for breach of contract. Commercial General presumption = Legal intention Agreements - There is necessary intention to create legal relations. Edwards v Skyway Ltd (1964) The court held that Skyways was legally bound. Binding but une nforceable Honour Clauses When parties have expressly stated that their agreement is not to be legally binding. Rose &Frank Co v J R Crompton &Bros Ltd (1925) Exceptions (not legally binding) Letter of Comfort (pg 17) ( may be binding depending on its terms usually a document supplied by a 3rd party to a creditor indicating a concern to ensure that a debtor meets his obligations to the creditor. Kleinwort Benson Ltd v Malaysian Mining Corporation Berhad (1989) Court only found a moral not legal obligation. refer to pg 17) Letter of Intent (LOI) (pg 17) A device by which one indicates to another of his intention to enter into a contract with him E. g. a main contractor is prearing a tender and he plans to subcontract some of the work. Privity of Contract (Pg 105) The general rule is that no one, other than a person who is a party to the contract may be entitled to enforce or be bound by the terms of the contract. Price v Easton (1833) court held that Price co uld not succeed, as he was not a party to the contract between the debtor and the Easton.Management Corporation Strata Title Plan No 2297 v Seasons Park Ltd (2005) Exceptions (Thai Kenaf Co Ltd v Keck Seng (S) Pte Ltd (1993) Agency relationship Assignment of choses in action consent of 3 parties Letter of Credit Agreement Intention to create legal relations Consideration Is it an offer? Define offer Is there any intention? Is it revocation? Via broadcast? Was the offer effectively revoked? Is the agreement legally bind (To place under legalIs Consideration need to be sufficient but not Is it valid acceptance?Communicated obligation by contract)? adequate? Third partys conversation? Is the agreement reached in a business context? Promissory Estoppel? Talk about the elements, sword Postal rude? (eg. Family, friends) or shield? Is there any provision of information? Is it (social and domestic) or commercial Is the consideration moved from promisee? Any counter offer? agr eement? Is the offeree aware of offer with motive? Is the offer lapse?