The Contract Law of Singapore

Question: Describe about the Contract Law of Singapore. Answer: The scenario that is provided depicts that there is invitation to treat on the Alan when marked his entry in the liquor shop of Ben. The term invitation to treat refers to the invitation to any other person to indulge in making the offer for entering into contract. The term invitation to offer is used in the law of contract for making the distinction between the merchandise or advertisements display from the offers of contract that are formal. The general rule of contract suggests that for the enforceability of any contract there has to be the presence of the elements such as acceptance, consideration and offer. On the other hand, an invitation to treat or offer is merely considered as an invitation on the part of customers to make the submission of an offer (Puil Weele, 2014). Although the invitation to treat or offer denotes the willingness to make a deal, it is different from an offer in the fact that it lacks the intention that is to be considered as bound. In accordance to the words of Andrew Burrows, an invitation to offer or treat denotes the expression that is related with willingness to enter into negotiation. Any person who is involved in making the invitation to treat does not possess the intention to become bound by the acceptance of the person for whom the statement of invitation to treat was addressed. The scenario depicts that Alan made the walking to the liquor shop that belongs to Ben. The factor that Alan enters into the shop and starts looking at several bottles of vodka depicts the fact of invitation to offer or treat from the shop. In the case of Pharmaceutical Society of Great Britain v Boots Cash Chemicals of 1952, the decision came that the items that are displayed in the shops are for choosing or selection for the customers. The offer would follow from the seller when the customer offers to buy. In this scenario, Ben is regarded as the offeror, who made the counter offer to Alan, who is the offeree, after getting th e insisting from Alan to purchase Russian vodka. In this scenario, the counter offer has nullified the factor of invitation to treat or offer (Hillman, 2012). The strict insistence of Alan to make the purchase of Russian Vodka had granted the offeror, Ben, to adhere to the request of Alan by delivering him the right product. The case of Bannerman v White in the year 1861, depicted that any specific term that is communicated from the offeree to offeror prior to the making of the contract, then it would be regarded as the important aspect that would be considered as binding on the offeror. It can be depicted from the given scenario that there lies an offer that is considered as legitimate for facilitating the intention that is to take place. Alan made the acceptance the offer of Ben by making the purchase of the bottles of vodka that were preferred by Ben. The contract law of Singapore follows similar rules of the English contract law. A contract is an agreement between two parties who come together to fulfill contractual terms and conditions in return of a price that is paid on the fulfillment of certain obligations. However, there are certain essentials that are to be fulfilled for establishment of a valid contract (McKendrick, 2014). Legal capacity means capability of the parties for development of contract. The law of contract imposes restrictions on the capability of the persons who may form contract with one another (McKendrick, 2014). For example, contract with a minor is voidable at the option of the minor. The minor may want to continue with the contract or may cancel the contract with the other party. Likewise, contract with an intoxicated person is considered as void. Such persons do not have the capacity of forming a contractual relationship (Ayres, 2012). Alan and Ben, being major and sound individuals had the contractual capacity of contracting with one another. A contract without consideration is void. Consideration forms the basis of a contract. Consideration is the price paid in return of the fulfillment of contractual obligations (Puil Weele, 2014). For example, A sells his computer to B for $ 20,000. In this case consideration is 20,000 dollars. Consideration may be in cash or in kind. The price that Alan will pay to Ben for the vodka bottles is consideration. Intention to form a contract may be determined by the terms of the contract or sometimes it may depend on the details or circumstances of the case. The Judges of the Court determine the intention based on the facts and circumstances of the case. However, intention to form legal contract becomes one of the most important factor for formation of contract (Hillman, 2012). Based on the facts of the case, it may be concluded that both the parties to the contract had legal intention of forming contract with each other. Therefore, in the present case a valid contract was created between both the parties, that is, Alan and Ben. The important essentials of a valid contract were completed between them and they were bound by the terms and conditions of the contract. The sale and purchase of goods in which the vendor agrees to sell or transfer the rights of goods to the potential buyer for some price or value. This transaction is governed by the rules and regulations that are covered under the Sales of Goods Act in Singapore (Hillman, 2012). The Sales of Goods Act, Singapore, contain a list of transaction pertaining to the sale or purchase of goods. Meaning of the term Goods: Part 1 (h) of the Sales of Goods Act defines the term goods. According to the given section, goods mean and include crops, stocks and timber. The Sales of Goods Act contains many provisions that deal with the warranties that protect the buyer and the seller. The interests of the seller and the buyer are protected by the application of Sales of Goods Act (Amin, 2013). Part 1 of the Sales of Goods Act contains many warranties that provide protection to the buyer from the deceiving activities of the seller. Implied Warranties: Section 15, Part 1 of the Sales of Goods Act deals with implied warranties that provide protection to the buyer from the fraudulent activities of the seller. In the case of Mash v. Murell held that it is the responsibility of the seller to ensure that the potatoes should be of merchantable quality. Similarly, in the case of Rogers v. Parish, it was held by the Court that though the car was in a position that it could be driven breach of section 14 was committed. According to section 15 of the Sales of Goods Act, when the seller provides a particular description to the given buyer of the goods, then the description of the goods should match with the goods that are bought by the buyer from the seller. In case there is any discrepancy between the two then the seller may be held liable for fraudulent activities (Cartwright, 2016). Description should match with the Requirements: Additionally, Section 16 of the Sales of Goods Act imposes no implied warranty on the seller for the description or quality of goods unless the seller explicitly describes the description of the goods and that the buyer relied on the sellers description. Section 53 of the Act allows the person to hold the seller liable for breach of warranty under the given Act (McKendrick, 2014). By applying the rules in the given case scenario, Allan was the buyer and Ben was seller. Allan had stated his requirement of buying vodka that was distilled in Russia. Ben assured Allan that the vodka that he is providing with is distilled in Russia. Allan was satisfied with Bens assurance and he bought the bottle of Vodka relying on Bens assurance. Allan purchased the bottle of Vodka and later he suffered from diarrhea. Hence, it may be concluded that Ben violated sections 15 and 16 of the Sales of Goods Act. Therefore, Allan can file a suit of legal action against Ben. Parties to the contract avoid or limit their liability by including an exclusion clause within their contract. This is the best way in which parties to the agreement try to evade their liability. Exclusionary clauses are provisions as part of the contract that limits or constraints the liability of the other party to the agreement (Ayres, 2012). The responsibility is imposed by the occurrence of certain events or situations. The exclusion clause provides protection to the responsibility of the other person in certain events or situations. However, the law of Singapore provides protection to the formation or inclusion of such exclusionary clauses as part of the Unfair Contract Terms Act. Law of every country makes rules for the protection of imposition of arbitrary exclusionary clauses. Hence, exclusionary clauses are considered as invalid, illegal and opposed to public policy (Loi Low, 2014). The Unfair Contract Terms helps in the regulation of exclusionary clauses by imposing restr ictions on their application. Section 3 of the Unfair Contract Terms Act deals with the liability that arises from a contract containing exclusion clauses and that imposes the liability of the other person. According to section 3 of the Unfair Contract Terms Act a person cannot exclude from the liabilities arising out of the contract by imposing the restrictions of exclusionary clauses (Amin, 2013). Likewise, the parties to the contract are also restricted from imposing a disclaimer clause, which permits performance of contract in a different way than originally expected. The main dispute that arises is in the application of the Unfair Terms and how far the terms are reasonable and applicable. A reasonable term is the one, which is fair and known to both the parties to the contract. Section 5 of the Unfair Contract Terms Act deals with the goods that are used for personal consumption and any liability that arises from the damage or loss caused to the buyer then such a liability cann ot be imposed from the application of exclusion clause (Cartwright, 2016). Thus in the given case, the statement that was printed on the receipt and that was handled to Alan cannot be treated as enforceable as it protected the liability of Ben arising out of the defective goods that was supplied to Alan. Exclusionary clauses are no defense that may provide protection to the defendant by imposing it on the opposite party or it may restrict their liabilities. The duties which vendor owe to their buyer cannot be escaped so easily. According to the general rule of contract, receipt is not a contract it is just an acknowledgement. Ben cannot impose the receipt in his favor as law will not consider that as part of his contract. In the case of Chemical Cleaning Co, the plaintiff took a receipt from the defendant that excluded the defendant from any liability that may arise due to the loss or damage out of the services that were made available to the plaintiff. The court held the defendant liable for breach of contract. In the given case study, Ben was the vendor who worked in a liquor shop and Alan was the buyer who visited Bens shop with the intention to have vodka. Alan stated his requirements that he wanted to have vodka that is distilled in Russia. Ben assures Alan that the vodka which he wanted to purchase is the one that is distilled in Russia. However, after consumption of the same drink Alans friends fell sick and they suffered from diarrhea. It was discovered that the drink that he purchased was an illicit drink. A valid contract existed between Alan and Ben and it was seen that all the requirements of a valid contract was fulfilled between them. However, the question that arises is whether Ben had a legitimate agreement between Alans friends or not. The answer to this question is no. There was no valid contract between Alans friends and Ben as the requisite elements for fulfillment of a valid contract was not completed between them. Hence, Alans friends can file a case against Ben for neg ligence under the law of tort. Negligence means failure to exercise an ordinary sense of care, which is expected out of a man of ordinary prudence. It is expected from a reasonable man to exercise some level of care and failure to exercise the same may make the person liable for negligence (Van Dam, 2013). For establishment of negligence the following elements have to be fulfilled. Firstly, there should be establishment of the fact that there was a duty and that there was a breach of that duty of care which the person owed. Additionally, the plaintiffs also have to prove that there is proximity between the breach of duty and the damage that is caused to the plaintiff. If the plaintiff is able to establish to these required elements then the defendant may be liable for negligence (Deakin et al., 2012). If we apply these requisites in the given case scenario, then Ben may be held liable for breach of duty of care. As a shopkeeper, Ben was supposed to utilize his duty of care and ensur e that the drinks that he is selling were not of illicit quality. He should have taken care of such a thing; however, he failed to use his ordinary sense of prudence and sold the drinks that were illicit in nature thus caused diarrhea to Allans friends. Thus, the distributors have a duty of care towards their consumers for the goods that he sells under the Sales of Goods Act. The duty creates many implied warranties that are related to the quality of the goods that are sold in Singapore (Liang Kee, 2014). Thus, in the given case, Alans friends rightfully have the opportunity of filing a case against Ben for breach of duty of care. Ben was expected to sell drinks having good quality since he failed to exercise his duty of care hence, he may be held liable for negligence. Another important element required for filing a suit of negligence is that the damage caused and the negligent action of the plaintiff should have proximate cause. In this case, the negligent action of Ben and Alans friends suffering from diarrhea is enough cause to hold him liable for negligent action. The present case invokes applicability of the doctrine of contract of privity. The doctrine of privity states that a third party who was not a part of the contract can enjoy the benefit of the terms of the contract in special situations. In this case, Alans friends can make Ben liable by applying this doctrine to their situation. Negligent liability is contained in Section 2 of the UCTA. According to this section a person cannot exclude himself from liability by imposing a clause in the contract that restricts him from the negligent action. Alans friends may hold Ben liable under Section 2 of the UCTA (Chan Lee, 2016). References Amin, N. (2013). Protecting consumers against unfair contract terms in Malaysia: the Consumer Protection (Amendment) Act 2010.Malayan Law Journal,1, 1-11. Ayres, I. (2012).Studies in Contract Law. Foundation Press. 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