The Council on Foundations Compendium of Legal Resources

FOUNDATION OF LAW

Issue
The issue in the given case study is to determine whether Joe has any legal rights
against the makers of the 'InvestorPlus' software or not. The analysis would be based on the
various provisions of the Contract Law as well as the Unfair Contract Terms Act.
Rules
The rules regarding the above order are mentioned at length hereunder. The contract
law comprises the various provisions that govern the manner of creation, termination and the
administration of the contracts. As per the said provisions, an agreement stating the
respective rights and duties of the parties would be regarded as a contract, on the fulfilment
of certain conditions as elaborated as follows.
The first condition is that the parties must be capable of entering into a contract. This
means the parties intending to be part of the contract must not belong to the following
categories that are the minor, persons possessing unsound mind, or a person under the effect
of the alcohol or other kind of intoxication. Thus, a person that is not in the proper state of
mind to understand the terms of the contract would be barred from entering into contract
(Corporate Guide Singapore, 2020). The second condition for an enforceable contract to be
created is that there must be valid offer and acceptance. Thus one party must offer the terms
and conditions and the other party must accept the same in the absolute manner. In this regard
it must be noted that an advertisement is not an offer but an invitation to treat. When one
party comes across an invitation to treat, he or she must extends an offer to the other party
and when the other party accepts it as it is, the agreement comes into existence. In addition,
the third condition of the presence of the consideration must also be fulfilled (Asia Law
Network, 2017). An agreement without consideration cannot be regarded as a valid contract.
Thus, the parties must exchange something of value with each other in return of the
performance or not performing a certain act. Further condition states that the parties must
intend to be bound in a legal relationship and thus the agreements between the family
members are not considered as a legally enforceable contract in the eyes of the law. By the
virtue of the last condition, it must be ensured that the terms and conditions of the contract
must be certain and not vague or ambiguous, to be construed in a similar manner by both the

parties. Thus, on the fulfilment of all the mentioned conditions, the agreement is regarded as
a validly enforceable contract in the eyes of law.
In addition to the above rules, it must be noted that as per the provisions of the
contract law, the contracting party can be released from the contract when the obligations are
yet to be performed when the same are mutually agreed to by both the parties. However, if
one party is willing to be released and the other party owes no obligation, the former must
provide some form of the consideration for the said release from the contractual terms. The
failure of lawful exist would lead to the breach of the contract (IRB Law LLP, 2020).
In addition to the contract law provisions, the provisions of the Unfair Contract Terms
Act are also worth noting here. As per the Section 3 of the mentioned act, the party dealing
with the consumer of a product or a service cannot by any means restrict, exclude or limit
their liability, related to the part or whole of the obligations of the contract (Singapore
Statutes Online, 2020). Thus, it was reasonable to do so, the parties cannot lead to the
different contractual obligation than the initially decided and expected by the other party.
Application
The application of the above mentioned legal rules are presented as here under. In the
given case study, a valid contract exists between the parties Joe and the makers of the
InvestorPlus Software. This is because the invitation to treat is displayed by the makers in the
form of the advertisement, to which Joe makes an offer which is later on accepted by the
makers of the said software. Both the parties possess legal capacity to enter into the
contractual relationship. The terms are certain as to payment of the refund amount to the tune
of $5000.00 in the event of failure of achievement of 30 per cent profits through the aid of the
mentioned software. The commercial contracts by nature are the legal contracts. The
consideration is the purchase price of the software. Thus, all the necessary conditions for the
contract creation are fulfilled, leading to an observation that a valid contract existed between
the parties.
As Joe sustained losses due to the use of the software, he asks for the compensation
from the makers. The makers have denied the compensation stating that they had cancelled
the contract by placing the advertisement in the same magazine. It must be noted that
advertisement is an invitation to treat and not an offer. Moreover, the said form of
cancellation has not been mutually agreed to by the other party. Thus, applying the provisions

of the Contract Law, it can be stated that the manner of cancellation of the contract is not
valid, as the same was not informed in the earlier terms and conditions, and the modification
is valid only when the same has been notified and agreed by the other party.
On the application of the provisions of the Unfair Contract Terms Act, it must be
noted that there is a breach of the provisions of the Section 3 of the act, as the seller
themselves excluded their liability even before the performance of the contractual obligation,
which was unreasonable to do so.
Conclusion
The above discussions lead to the conclusion that as the valid contract existed
between the parties, and the conditions of the same has been unlawfully breached by the
makers of the InvestorPlus software. This leads to rights on the part of Joe to claim damages
for the same or force the performance of the contract. Thus, he has the right to claim
compensation for losses sustained.

References
Asia Law Network (2017). Contract Essentials for a Business in Singapore. Retrieved from:
https://learn.asialawnetwork.com/2017/10/23/contract-essentials-for-a-business-in-
singapore/
Corporate Guide Singapore (2020). Key Points of Singapore’s Contract Law. Retrieved from:
https://www.corporateguide.sg/key-points-singapores-contract-laws/
IRB Law LLP (2020). Overview: Breach of contract. Retrieved from:
https://irblaw.com.sg/learning-centre/overview-breach-of-contract/
Singapore Law Watch (2020). Ch. 08 The Law of Contract. Retrieved from:
https://www.singaporelawwatch.sg/About-Singapore-Law/Commercial-Law
Singapore Statutes Online (2020). Unfair Contract Terms Act. Retrieved from:
https://sso.agc.gov.sg/Act/UCTA1977