Commercial Law Assignment: Contract Law in Singapore

This report analyzes a commercial law case study set in Singapore, focusing on contract law principles. It examines the formation of a contract, the legal positions of involved parties, and the remedies available in case of breaches. The analysis delves into key elements like offer, acceptance, consideration, and capacity, drawing on relevant case law such as Harvey v Facey and Hyde v Wrench. The report also assesses the legal standing of different parties, including a minor, and explores the applicability of remedies like damages. Furthermore, it evaluates alternative dispute resolution (ADR) methods, specifically mediation and arbitration, outlining their pros and cons for resolving contractual disputes. The case study provides a detailed examination of contract law in a commercial context, offering insights into dispute resolution strategies.

Commercial Law
SINGAPORE
[DATE]
[Company name]
[Company address]

1
Introduction
After formation of a contract, the parties have to make sure that they understand its
legal consequences. It binds them into a relationship that is legal in nature and they have the
option to enforce its terms on each other. However, this is only possible if they have formed a
valid contract which must consist of all the relevant elements. In this paper, a case study will
be analysed by using the principles of “contract law” to identify legal position and remedies
available for different parties involved in the case study. This report will also identify
different methods of “alternative dispute resolution” (ADR) which include methods such as
litigation, arbitration and mediation along with evaluation of their pros and cons.
Question 1
Issue
In the given case study, the key issue is relating to availability of a contract. In case a
contract is constructed, then who are the parties?
Rule
Without the availability of specific elements, parties cannot enforce one another on a
legal basis since they did not form a valid contract. They have to guarantee that these
elements should be there in this scenario for making sure that have legal rights in the
contract. The process begins with an offer which must be available in the given scenario. As
given in “Harvey v Facey [1893] UKPC 1”, the entity that has presented the offer must have
the intention to make sure that it is legally enforced once it is accepted. Without this
intention, the validity of the offer cannot be determined. Furthermore, availability of
acceptance is crucial on the offer to make sure that parties creating a binding relationship.
However, in “Entorres v Miles Far East [1955] 2 QB 327”, it was very well-known that
communication is substantial to make sure that acceptance is valid. Moreover, there should
be no contravention or difference between acceptance and the offer which was given by
parties or else it creates a “Counteroffer”. In “Hyde v Wrench (1840) 49 ER 132”, it was
stated that once a “counteroffer” is made, parties lost their option to accept the original offer
(Waddams, 2011). There are different ways through which parties can give their acceptance
one of which include post in that case the principle of “postal rule” applies on the situation. It
implies that when a letter is correctly stamped and addressed and it is inserted into the
mailbox, then the acceptance is to be considered as valid one irrespective of the fact is it

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reaching to the party within reasonable time or not. It is also important for parties to
determine that “consideration” is available which is referred to the bargain that lead to
creation of the contract. Furthermore, parties must have intentions to make sure that they
wanted to form legal relationships. This is not the case with agreements which parties create
in social settings as provided in “Jones v Padavatton [1969] 1 WLR 328”. Furthermore,
another crucial element is ensuring that parties must be capable of creating a valid legal
relationship since a person who is not major, or is insolvent or mentally unsound individual
cannot form a legal relationship. “Nash v Inman [1908] 2 KB 1” is a relevant judgement in
which it was established that minors cannot create a legal relationship (Collins, 2003).
Application
In the given case, an advert was posted by Alan in which he wanted to sell his book.
The price for the book was set at $200. This offer leads to a “counteroffer” which was given
by Bernard for $150 and it was not accepted. Since approval was not given to the
counteroffer, it was not accepted and it also leads to terminating the original offer as made in
the case of “Hyde v Wrench”. But, the decision taken by Alan to accept the money of Bernard
resulted in forming a contractual relationship between parties. The decision of purchasing the
book made by Charleen; however, she is a minor which limits her ability to create a legal
relationship (“Nash v Inman”). She was in a social settings as well which limits her ability to
create a legal relationship. Furthermore, Damien was not a part of the friend circle of Alan;
however, the offer was made on 4th November in relation to the book. As per their discussion,
the money given by Damien was taken on the spot by Alan which led to creating a
contractual relationship between them.
Conclusion
To conclude, in the given case, contract is created between Alan and Bernard.
Charleen cannot enforce her legal rights since she is not in a contract. Lastly, Damien and
Alan are in a relationship as well.
Question 2
Issue
Can there be any relevancy in the remedies provided by Bernard and what is his legal
position?

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Rule
In this regards, provision of counteroffer applies in the case. This rule implies that
parties have to give their acceptance that exactly match with the offer presented to make sure
that it is considered as valid. Thus the rule of counteroffer can be determined as one of the
essential element of the Law of contract. This definition of counteroffer was clarified in the
case of Hyde v Wrench where it was seen that the postal rule will be made applicable to the
situation where the party gives its acceptance via post. This rule was further seen in Adams v
Lindsell (1818) 106 ER 250 case. Where it was determined by the court that the acceptance
will be considered as valid, if an appropriate address along with a stamp is present on a letter
which is been dropped in the mailbox irrespective of the fact whether the letter was received
late by the offeror party or not. Damages, injections, rescission, repudiation as well as the
specific performances are considered as those remedies which could be awarded to the ones
who breaches the terms of the contract (Tan, 2010).
Application
The original as well as the counteroffer which was made latter was rejected by Alan
in the given case scenario. As seen in the case of Hyde v Wrench it was determined that Alan
had no right to accept the money which was sent by Bernard as was decided in the original
offer. Though it was clear that the agreement or a valid contract was made amongst Alan and
Bernard as Alan had given its acceptance by approving the given amount and provided only
with a book to Bernard against that money. Here Bernard can sue and attain remedies against
Alan as he had not fulfilled the contractual terms.
Conclusion
Thus to conclude it can be said that there was a contract which was formed between
the two parties, its terms were breached hence remedies can be claimed against the loss.
Question 3
Issue
Can Charleen be awarded with the legal remedies and what would be his legal
position?
Rule

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In context to the provision of having the ability for creating a valid contract, the
parties must be of sound mind, not insolvent, must be a major and must have ability of enter
the valid contract. Irrespective of the valid assistance of the parents a minor will not be able
to enter into a contract and this point was clarified in Nash v Inman case as the minor are
unable to comply with the terms of the contract. But there are exceptional cases where a
minor can enter into the contract personally such as purchase of necessities i.e. food, clothes
etc. and this was proved in the case of Chapple v Cooper (1844) 153 ER 105 (Lee, 2016).
Application
In this case scenario Charleen was a minor, so she has no right to enter into any
contractual relation unless there arises a necessity this was seen in the case of Nash v Inman.
But book is related to education which derives under the premises of necessity as mentioned
in the case of Chapple v Cooper. As there was no legal relation which was built between the
parties no legal remedies can be claimed either.
Conclusion
Hence to sum up it can be said that no remedies would be made available to Charleen
as no legal contract was formed between the parties.
Question 4
Issue
Can Damien be awarded with the legal remedies and what would be his legal
position?
Rule
In order to form a valid and legal contract there must be certain elements which must
be accomplished such as offer, acceptance, intention, and consideration as well as capacity.
The term offer is used in the case of Harvey v Facey which intends the binding of the parties,
moreover need of acceptance was established in the case of Brogden v. Metropolitan Railway
Co. (1877) 2 App. Cas. 666. Presence of consideration was felt in the case of Chappell v
Nestle [1960] AC 87 and lastly intention is the essential term which must be present in the
contract for forming the contractual relationship (Andrew B. L. Phang, 2012).
Application

5
In the scenario of the case it was seen that the posted offer was not done for Damien
he got to know about it by Bernard. Then he texted Alan for making payments of the book.
Acceptance of money was given by Alan as seen in the case of Brogden v. Metropolitan
Railway Co. Here the remedies for the damages can be claimed by Damien as Alan was seen
to violate the terms of the contract. Though he gave up a new book to Damien.
Conclusion
Hence to conclude it can be said that remedies can be claimed by Damien as the
parties are found to be in a contractual relationship.
Question 5
Mediation is considered as the best option for the parties in this case, though, there are
three alternatives of dispute resolution ADR which may be made available to the parties for
resolving their disputes.
Mediation
This is a procedure where the parties sit and discuss their disputes by taking the help
of a third person who is trained and not partial. In this case the parties must go for this
mediation process for resolving their disputes as here they can sit peacefully and mutually
decide and attain a common good for their dispute. This process is also a non-binding one.
The mediator here, basically belongs to the legal field and has that expertise to assist the
parties to resolves their disputes (Santiago-Rivas, 2015).
Pros
This process is less expensive and time savvy as compared to that of litigation. Here
each party gets appropriate opportunity describe the dispute without any restriction form his
personal viewpoint. Parties also becomes an active participant in resolving the dispute.
Whereas in this scenario it was seen that the parties did not agree to the mediator settlement
and hence needed to come before the court (Ballard A. &., 2016).
Cons
For mediation to get success the acceptance of both the parties is very essential. The
parties cannot get an appropriate result if the mediator is found to be an inexperience one and
in this case the decision reached by the party becomes unenforceable.

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Arbitration
Here the clash can be resolved by the arbitrator and it is done by issuing an award. It
can also be called as that out of court settlement. Here also the agreement of both the parties
is required and this arbitral clause must also be mentioned in the agreement of both the
parties. With mutual understanding both the parties chose their arbitrator which can be one or
more in numbers for providing judgements in their raised disputes (Veasey, 2015).
Pros
This process is a very confidential one and preserves the time and money of both the
parties to the disputes. The decision in face of the award can be made applicable upon both of
the parties and upon the arbitrator can also be chosen by the mutual understanding of the
party (Krivokapich, 2019).
Cons
The judgement becomes applicable even if there is a sign of disagreement between
the parties. The biasness of arbitrator can be the biggest issue in this case. The award given
by the arbitrator is final and cannot be claimed before the court (Kaplan, 2015).
Conciliation
Conciliator is used in this case who makes an attempt to resolve the dispute by
meeting the parties individually and also with each other. This is a flexible and also not very
expensive method as the conciliator is a neutral one. The outcome here is decided on the
basis of circumstances reached through negotiations (Ballard, 2016).
Pros
Here the conciliator is generally considered as a legal official and this method is
conducted privately and both the parties can further visit court is not satisfied with its
decision (Murthy, 2016).
Cons
As compared to mediation this process is less flexible and also this process is not a
legally binding one. Sometimes this process may also not be taken seriously by the parties
(Krivokapich, 2019).

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References
Andrew B. L. Phang, G. Y. (2012). Contract Law in Singapore. Singapore: Kluwer Law
International.
Ballard, A. &. (2016). Alternative) dispute resolution and workplace bullying: Some pros and
cons from the coalface. Alternative Law Journal, 41(2), 105-109.
Ballard, A. &. (2016). Alternative) dispute resolution and workplace bullying: Some pros and
cons from the coalface. Alternative Law Journal, 41(2), 105-109.
Collins, H. (2003). The Law of Contract. Cambridge University Press.
Kaplan, N. &. (2015). A Secret Tool for Winning an Arbitration Case. Asian Dispute
Review,, 17(3), 116-121.
Krivokapich, B. (2019). Conciliation as a Means for the Settlement of International Disputes.
Bull. Kazan L. Inst. MIA Russ., 35, 44.
Lee, E. P. (2016). Building Contract Law in Singapore. Construction contracts.
Murthy, C. S. (2016). A critical overview of pros and cons of post-critical assumptions.
London: The Routledge Handbook of Soft Power.
Santiago-Rivas, M. V. (2015). Mediation analysis of decisional balance, sun avoidance and
sunscreen use in the precontemplation and preparation stages for sun protection.
Psychology & health, 30(12), 1433-1449.
Tan, S. M. (2010). Contract Smart: Understanding Contract Law in Singapore. Singapore:
Marshall Cavendish Business.
Veasey, E. N. (2015). The Conundrum of the Arbitration vs. Litigation Decision. Business
Law Today , 1-5.
Waddams, S. (2011). Principle and Policy in Contract Law: Competing or Complementary
Concepts? Cambridge University Press.

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Cases
Harvey v Facey [1893] UKPC 1
Entorres v Miles Far East [1955] 2 QB 327
Jones v Padavatton [1969] 1 WLR 328
Hyde v Wrench (1840) 49 ER 132
Nash v Inman [1908] 2 KB 1
Adams v Lindsell (1818) 106 ER 250
Chapple v Cooper (1844) 153 ER 105
Brogden v. Metropolitan Railway Co. (1877) 2 App. Cas. 666.
Chappell v Nestle [1960] AC 87