The Element of Variation in Fees - PDF

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Contents
Issues...........................................................................................................................................................2
Law.............................................................................................................................................................2
Application..................................................................................................................................................3
Bibliography................................................................................................................................................6

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Issues
a. Advice to Tommy considering:
i. the element of friendship;
ii. The element of variation in fees.
b. Whether Tommy is entitled to claim for compensation from SIN regarding the loss or
damage of his props by the student volunteers.
c. Whether SIB can rely on the exclusion clause?
Law
A contract is a document which contains terms and conditions which the parties intend to abide
by. A contract can only be made when some prime elements are complying with. (Advice, 2012)
Offer and acceptance
Two of the most important elements to initiate any contract are offer and acceptance.
An offer is the intention of the offeror communicated to the offeree with an expectant of
approval of the terms (Woo Kah Wai v Chew Ai Hua Sandra , 2014). When the offeree approves
of the terms of the offer then it is an acceptance in law (Midlink Development Pte Ltd v The
Stansfield Group Pte Ltd, 2004).
Both offer and acceptance makes a binding contract
Capacity
Both offer and offeree must be major and must not be of unsound mind
Legal intention
This is one of the most important elements in any contract formation the legal intention
requirement submits that both the offeror and the offeree must have legal intent to abide by the
terms of the contract. Thus, if any dispute will arise they are willing to move to the court of law.
In (T2 Networks Pte Ltd v Nasioncom Sdn Bhd, 2008)the basic presumption that lies with
respect to legal intention is that the parties who are in family, social, domestic, friendly
relationship never was to make their contract legally binding and thus there is absence of legal
intention. Also, it is a basic presumption when the parties are in commercial relationship is that
they parties wants to make the contract legally enforceable and thus there is presence of legal
intention.

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But, these general presumptions are rebuttable. The parties even though are friendly relationship
wants to execute a legally binding contract then the contract is enforceable. Likewise, the parties
are in commercial relationship but does not want their contract to be legally binding then there is
no legal intention to make a contract enforceable in law. (Goh, 2014)
Consideration
Consideration is a very important element in contract formation. Consideration is nothing but
something of value that makes the promises amid the offeror and offeree enforceable. It is a gain
or benefit that moves from the promisor to the promisee against the primes that is made by the
promisee to comply with the acts or omissions that are required by the promisor.
In (Chwee Kin Keong and others v Digilandmall.com Pte Ltd , 2004), it was held by the court
that it is necessary that to be a valid consideration the same must be absolute in nature and not
sufficient. A consideration must have some value in law and that need not be sufficient in nature.
Thus, these elements together results in the formation of a valid contract.
Apart from the law of contract, one of the laws that is normally applicable on parties is the law of
negligence.
In (Donoghue v Stevenson, 1932)the law of negligence submits that every defendant is liable for
the loss that is caused to the plaintiff because of his acts or omission. The main requirements to
prove negligence are:
i. That the duty of care is imposed on the defendant to make sure that no loss is caused
to the plaintiff f by his acts. The duty of care is against those plaintiff with whom he
shares the relationship of proximity and those who are reasonable foreseeable;
ii. It is necessary that the duty of care that is imposed on the defendant is not met by not
complying with the adequate level of care;
iii. That because of breach of duty of care loss is caused to the plaintiff which is not
remote and is caused because of the acts of the defendant.
At times, the parties to the contract try to limit their liability by relying on the exclusion clause.
The exclusion clause limits the liability of the party to the contract on the happening of some pre
decided event which is made part of the contract mutually by the parties.
If any party wants to incorporate an exclusion clause independently then reasonable efforts must
be made to bring the clause in the notice of other party.
Application
Now advice is considered to Tommy
Issue a

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i. When both Tommy and Johnson were friends
It is submitted that Tommy was a magician who was engaged by SIN and he has to
perform at the SIN open House. Johnson was the majority shareholder and director of
SIN.
5 years age both of them were full time lecturers in the same university and thus
known each other for about three years. Thus, there is a cordial relationship amid
them. Tommy is willing to help Johnson in SIN Open House considering that they
were friends for such a long time.
Thus, both Tommy and Johnson are in friendly relationship and thus considering
(Balfour v Balfour , 1919) there is no legal intention amid both of them resulting in
no contract formation.
However, a contract was established amid them. It is submitted that Tommy is willing
to help Johnson but the main aim of entering into the contract was not their age old
friendship. Thus, it is submitted that though they are in amicable relationship but their
intention was to make a valid enforceable contract.
ii. When Tommy’s fees of $1,000 as compared to Terry the Juggler’s fees of $2,000
It is submitted that a valid contract was made amid Johnson and Tommy but Tommy was
provided with fees of $1,000 whereas Terry was provided with a fees of $ 2,000. Now, $1000
that is provided to Johnson to Tommy was against the services that is provided by Tommy to
Johnson. Thus, $1000 is exchanged amid the parties in order to hold their promises. Thus, it
is a consideration in law.
There is no requirement that the consideration must be sufficient. The only requirement is
that it must have some relevance in law. Thus, $1000 is sufficient consideration and is valid
in nature.
Issue b
Under the law of negligence, SIN has a duty of care against all his invites to make sure that no
loss is caused to them because of his acts. Now, it is assumed that SIN is responsible for the acts
of the student volunteers. Thus, he must make sure that no volunteer must act in such a manner
so that loss is caused to any person. Tommy was rehearsing and thus is in proximate relationship.
So, no loss must be caused to Tommy.

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But, this duty is violated as the props were damages when the student moved the same. The level
of care while handling the prop was not done adequately resulting in breach.
Because of breach the props of Timmy were damaged.
Thus, SIN must be held liable for the loss that is incurred to Tommy.
Issue c
If the contract amid Johnson and Tommy contains a clause which makes SIN not liable for any
loss or damage that is caused to the property howsoever caused during the rehearsals or actual
open house, then, such clause is an exclusion clause.
Since the exclusion clause is made part of the contract unilaterally by SIN then he must make
sure that the clause must be bring to the knowledge of Tommy by reasonable efforts. Since no
reasonable efforts are made, thus, the clause has no validity.

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Bibliography
Advice, S. (2012, August 14). Requisite elements in the formation of a contract: . Retrieved May 18, 2018,
from Singapore Legal Advice: https://singaporelegaladvice.com/law-articles/requisite-elements-in-the-
formation-of-a-contract/
Balfour v Balfour (1919).
Chwee Kin Keong and others v Digilandmall.com Pte Ltd (2004).
Donoghue v Stevenson (1932).
Goh, L. T. (2014). Contract Law. SAL Ann Rev .
Midlink Development Pte Ltd v The Stansfield Group Pte Ltd (2004).
T2 Networks Pte Ltd v Nasioncom Sdn Bhd (2008).
Woo Kah Wai v Chew Ai Hua Sandra (2014).