BUS201

Examination – January Semester 2018

Contract & Agency Law

Monday, 14 May 2018 10:00 am – 12:00 pm

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Time allowed: 2 hours

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INSTRUCTIONS TO STUDENTS:

1. This examination contains FOUR (4) questions and comprises FOUR (4)
printed pages (including cover page).

2. You must answer ALL questions.

3. All answers must be written in the answer book.

4. This is an open-book examination.

At the end of the examination

Please ensure that you have written your examination number on each answer book
used.

Failure to do so will mean that your work cannot be identified.

If you have used more than one answer book, please tie them together with the string
provided.

THE UNIVERSITY RESERVES THE RIGHT NOT TO MARK YOUR

SCRIPT IF YOU FAIL TO FOLLOW THESE INSTRUCTIONS.

BUS201 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 1 of 4

Examination – January Semester 2018
You must answer ALL the questions. (Total 100 marks)

Note to Students: Remember to support your analysis with reasons, case law and (if
relevant) statutory provisions that are applicable to Singapore.

Question 1

Annie wanted to sell her collection of books and hence, placed the following online
advertisement:

“Are you interested in expanding your book collection? Novels,

textbooks and non-fiction books are available for sale at $10 each.
The entire collection is available at a special price of $200! First
one to call me at 9123-4567 will get a bonus discount. Call me for
more details.”

Bob saw the advertisement and was the first to call Annie. Over the phone, he told
Annie that he wanted to buy the entire collection and could meet her that very day to
pass her the money. However, the call quality was very poor and Annie could only
discern that he wanted to meet. Nonetheless, she agreed to meet and gave details for the
meeting.

Before Annie could meet Bob, she received a call from Charles who stated that he
wanted to meet her and buy all the books available for sale. She agreed to meet with
him, and gave him the same details for the date, time and venue as those which she has
given to Bob.

As Annie was in a rush, she decided to ask David to meet Bob and Charles on her
behalf. She told David that he should meet with Bob and Charles and “just negotiate
and sell to whoever is willing to pay the higher price”.

At the meeting, David told Bob and Charles that the books will be sold to whoever
offered the higher price. Charles immediately offered to pay $400 for the entire
collection. David agreed but Bob was very upset and claimed that David has no right to
change the terms of the offer in the online advertisement.

Explain and discuss whether the agreement entered into by David is valid and binding
on Annie. In your analysis, analyse whether David is empowered to act on Annie’s
behalf at the meeting and whether the four (4) elements of a valid contract are present.

Support your analysis with reasons and relevant case law.

(30 marks)

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Examination – January Semester 2018
Question 2

Johnson purchased a plot of freehold land and decided to build a three-storey bungalow
on it. He engaged HouseProud Pte Ltd (“HouseProud”) as the contractor to lay the
foundations and build the bungalow.

Johnson wanted to move into the house no later than 1 June, as his whole family was
relocating back to Singapore and arriving on 1 June. He stressed the date to Marcus, the
general manager of HouseProud as they were negotiating the contract. Hence, the final
signed contract stated the completion and hand-over date as “1 June”.

By 15 May, it was becoming obvious to Johnson that the bungalow would not be
completed by 1 June. When questioned by Johnson, Marcus from HouseProud
shrugged his shoulders and stated that it was “impossible to finish by 1 June” and that
“it can’t be helped”. Johnson is so angry that he is thinking of terminating the contract
before 1 June.

Analyse the facts above and discuss the most likely basis on which Johnson can
discharge the contract. Conclude with your recommendation on what Johnson could do,
based on your analysis.

Support your analysis with reasons and relevant case law.

(25 marks)

Question 3

Moodz Pte Ltd (“Moodz”) is a Singapore-based company that designs, manufactures

and sells clothing and accessories incorporating wearable technology. Its products are
specifically designed to capture fluctuating stress levels of the wearer and recommend
appropriate stress-relieving activities.

Given its success in the Singapore market, Moodz is considering an expansion of its
business to Malaysia, China and the United States and has already commenced
preliminary discussions with potential distributors in those countries. It is also
proposing to include the following clause in its employment contract with its senior
management such as the Chief Executive Officer, Head of Sales & Marketing, and
Vice-President, Research & Development:

Upon leaving the Company, the Employee will not seek to damage
or injure the Company’s reputation or to canvass, solicit or procure
any of the Company’s customers for himself or any other parties.

In the event that the Employee leaves the Company (whether due to
his resignation or dismissal), the Employee shall not join any
another company or business that is or may be competing with the
Company in the field of wearable technology in Singapore or
elsewhere.

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Examination – January Semester 2018
(a) Identify and state the key issue relating to the above clause. Briefly describe two
(2) types of contracts in which such a clause is typically found.
(6 marks)

(b) Analyse the above clause and state your views on whether it is valid and
enforceable. Support your analysis with reasons and relevant case law.
(19 marks)

Question 4

(a) Describe a real-life situation where parties would enter into a contract that
includes a liquidated damages clause.
(5 marks)

(b) Examine the relevant guidelines and factors which the courts would take into
consideration when assessing whether a liquidated damages clause would be
enforceable. In your answer, you are expected to cite relevant case law.

Based on these guidelines and factors, explain the circumstances in which the
liquidated damages clause described in the situation in (a) above would be
enforceable.
(15 marks)

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Examination – January Semester 2018