BUS201

Examination – July Semester 2018

Contract & Agency Law

Monday, 12 November 2018 10:00 am – 12:00 pm

____________________________________________________________________________________

Time allowed: 2 hours

____________________________________________________________________________________

INSTRUCTIONS TO STUDENTS:

1. This examination contains FOUR (4) questions and comprises FIVE (5)
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 5

Examination – July 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

Seng owns a car repair workshop. One morning, he ran into his neighbour, Danny, who
drives a 30-year old Mercedes S280. Danny complained that his car’s air-conditioning
had not been functioning properly so Seng said, “Come by my workshop and I will
have a look”. The next morning, Danny left his car at Seng’s workshop.

After some inspection, Seng emailed the following quotation to Danny.

Seng’s Repair Workshop

23 Sin Ming Industrial Park #01-18 Singapore 9009

Client : Danny Tan

Vehicle : Mercedes S280 (SBL 1234M)

Quotation
1. Replacement of one air-conditioning $200
cooling coil, inclusive of labour charges

Total : $200

When Danny saw the quotation, he sent the following text to Seng via WhatsApp, “No
need for quotations between neighbours! Save me from this heat  ”.

After reading the message from Danny, Seng proceeded to dismantle the whole
dashboard in order to carry out the repair works which took almost four hours. In the
evening, he drove Danny’s car back to him and handed over an invoice for repair costs
of $200. Danny was surprised and said, “I thought you were going to be a good
neighbour and fix my car’s air-conditioning for free! It only has another 6 months to go
before the COE expires and for me to scrap it!”

Explain whether there is a valid contract formed between Seng and Danny for the
repair of the car. Your answer should identify and discuss the four (4) elements
required to create a contract.
(30 marks)

BUS201 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 2 of 5

Examination – July Semester 2018
Question 2

Betty signed up online for a one-year gym membership with GetFitNow. She provided
her personal particulars and clicked “Sign Up Now” on the webpage shown below:

https://www.getfitnow.com.sg

GetFitNow
Take the first step to get fit now and
become a member by simply providing
your particulars and pay for your
membership fees.

Name :
Mobile Number :
Age :
Gender :

SIGN UP NOW
By clicking the button, you agree with our terms and conditions.

Betty did not see the words at the bottom which read as follows: “By clicking the
button, you agree with our terms and conditions.” The full terms and conditions are set
out via hyperlink on another webpage entitled “Terms and Conditions of Membership”.
They included the following clause:

“GetFitNow shall not be liable for any claims, losses, injuries or death to a
member arising out of or in connection with the use of our equipment or
facilities, however caused.”

On her first visit, Betty was working out on a treadmill when she suddenly slipped and
fell. It turned out that the running belt was not aligned properly during maintenance and
this caused Betty to fall and fracture her right arm as a result.

When Betty demanded compensation for her injury, GetFitNow accepted their
negligence but pointed her to the above clause.

Analyse whether GetFitNow’s exemption clause is valid and enforceable against

Betty’s claim for compensation.
(25 marks)

BUS201 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 3 of 5

Examination – July Semester 2018
Question 3

Bowie approached Heng Builders to design and construct a 38-foot fiberglass boat
complete with an inboard engine and auto-pilot system. Mr Heng, the boss of Heng
Builders, quoted a lump sum price of $100,000 and also promised to deliver the boat by
1 August to enable Bowie to join the Langkawi Race.

Bowie agreed to the price and paid $25,000 as a deposit.

During the last week of July, Bowie visited the workshop. He was surprised to find the
workshop quiet and his boat still not fully completed. A worker told him that Mr Heng
had won the Singapore Sweep lottery and gone on a five-day cruise with his family.
The workshop will only open on 1 August when Mr Heng returned from his holiday.

In order to take part in the race, Bowie had to immediately arrange for his boat to be
towed to another builder. Although the body of the boat had been fully constructed, the
engine and auto-pilot system had to be bought and installed. The new builder charged
Bowie $15,000 for the remaining works.

After his boat race, Bowie received an invoice from Heng Builders for $75,000 being
the balance of the contract sum that is unpaid.

Explain whether Heng Builders are entitled to claim the balance of the contract sum
that is unpaid. In your answer, please discuss the precise performance rule and all of
the exceptions.
(25 marks)

Question 4

Asman decided to rent out his factory and appointed Jayden as his exclusive property
agent. A huge “Property For Rent” banner with Jayden’s name as the agent, and
Jayden’s mobile phone number was put up by Asman at the factory entrance. Although
it is common for land owners in the industry to give tenants rent-free periods of up to
two months to carry out renovations, Asman told Jayden that he was not prepared to
give any rent-free period at all as rentals have been falling. The two parties agreed that
upon signing of the lease agreement, Jayden would be paid commission equivalent to
one month’s rent for the property.

Jayden printed and distributed flyers as well as placed advertisements in the local
newspapers to advertise for tenants. One day, Julie saw the “Property For Rent” banner
and she became keen to lease the factory. She called Jayden to arrange for a viewing.
After seeing the property, Julie offered to lease the factory for two years. As she
intended to carry out extensive renovations, she asked for a four-month rent-free
period. After thinking it over (and without consulting Asman), Jayden said, “Sure.
Let’s close the deal” and they proceeded to sign the contract.

BUS201 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 4 of 5

Examination – July Semester 2018
(a) Analyse whether Jayden had actual and/or apparent authority to carry out the
following acts on behalf of Asman:

(i) incur advertisement expenses; and

(ii) agree to the four-month rent-free period.
(15 marks)

(b) Asman decided to proceed with the lease to Julie. Discuss whether Jayden has
breached any duty as an agent.
(5 marks)

----- END OF PAPER -----

BUS201 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 5 of 5

Examination – July Semester 2018