Contract Law

Formation of Contract

Question 1

1. Explain the meaning of 'consideration' in the context of contract law.
2. Explain whether the following promises made by Justin are legally enforceable:-
   1. After receiving a painting painted by his friend Paul, Justin promises to pay Paul $100 for the painting.
   2. Justin promises to sell his Apple iMac worth $1,600 to Jennifer for $20.
   3. Tommy owes Justin $500. Justin promises to accept payment of $200 from Tommy and forego the balance $300.
   4. Josh owes Justin $500. Justin promises to accept payment of $200 from Josh and to forego the balance $300 provided Josh makes payment of the $200 one week before the debt is due.

Question 2

1. Explain the meaning of 'formalities' in the context of contract law.
2. Are the following agreements legally enforceable? Give reasons for your answer:-
   1. Josh agrees over the telephone to sell Peter his collection of Spiderman comics for $500.
   2. Jennifer verbally agrees over the telephone to sell her house to Simon for $1.6 million.
   3. Blue Ocean Pte Ltd, a company owned by Lenny, borrows $500,000 from Simon. Lenny verbally undertakes to pay Simon the amount due if Blue Ocean is unable to repay the loan.

Question 4

Cornerstone Construction Pte Ltd ("CC") is a Singapore company that carries on the business of building and construction. In December 2018, CC secured a contract from the Housing and Development Board ("HDB") to construct two blocks of public residential buildings ("the Project"). Superfast Scaffolding Pte Ltd ("SS") is a company that carries on the business of renting and leasing out scaffolding for construction works and is an Approved Scaffolding Contractor with the Ministry of Manpower ("MOM").

Recently, CC invited interested parties to submit their tenders for the lease of scaffolding for use at the Project worksite. In the tender notice, CC had stated "Cornerstone Construction Pte Ltd reserves their rights not to accept the lowest or any tender without assigning any reason thereof". There were two tenders submitted. One tender submitted was by Debest Scaffold Pte Ltd ("Debest") and the second tender was by SS. Both Debest and SS had provided competitive rates for their services. CC had previously worked with SS before. As for Debest, CC found out that Debest were certified by MOM as Approved Scaffolding Contractors very recently.

As such, CC communicated to SS on 1 April 2019 that they would accept SS's terms for the lease of scaffolding for use at the Project worksite. However, Debest had in the meantime delivered a letter by hand on 2 April 2019 accepting the tender.

CC had awarded the tender to SS, instead of Debest. Answer the following questions:

(a) CC's management wishes to know whether there is a valid contract formed between Debest and CC such that Debest can successfully take legal action against CC for breach of contract.

(b) Should Debest decide to sue CC, which court is Debest likely to start legal proceedings in?