Jan 2017

Question 3

You were recently hired by Champion Trading Pte Ltd ("CT"), a company which is based in Singapore and well-known in the trading business. Although your office is in Singapore, your responsibilities include business development initiatives in China.

On your first day of work, John (the Head of Department) told you that job titles and the level of seniority are very important aspects in China. Hence, the job title of "General Manager" is assigned to you, so as to facilitate your business development work in China. Your name cards also state your job title as "General Manager".

However, internally, your pay grade and level of seniority is equivalent to that of a senior executive. Hence, John reminded you that you must always seek his approval, including entering into any work-related transactions that are above $5,000.

Your first project in China is to source for a new supplier of engine parts which CT could subsequently import into Singapore for its trading business.

1.(a)Identify and describe the agency relationship in the above scenario. (4 marks)

2.(b)Discuss and analyse two (2) possible authorities which you, as the General Manager, may possess in the above scenario where you have been tasked to source for a new supplier in China. Support your analysis with specific examples, based on the above scenario. (16 marks)

(c) Briefly explain one (1) key duty of an agent, based on the scenario above. Support your discussion with one (1) relevant example. (5 marks)

Question 4

Freddy was keen to borrow some textbooks from Jenny, his university classmate and good friend. When he asked her, Jenny said, "Ok, I will charge you $10 per textbook per month as rental fee." Mark laughed and replied, "So expensive! Cheaper, please!"

Jenny proceeded to ask for a list of titles that Freddy wanted, and wrote down his answers carefully. Besides each title, she wrote a rental cost. When the list was completed, she passed him the piece of paper. He was not certain whether she was serious but decided to nod his head. As he needed the textbooks urgently to study for his examinations, she passed him the textbooks the next day.

After the examinations, Jenny started chasing Freddy for payment of the rental fees and the return of her textbooks. Freddy was shocked, and refused to pay Jenny. He insisted, "I have been sending you to school every week for the past few years and that is payment enough!"

1.Identify and discuss the four (4) elements of a valid contract and conclude whether there was a valid contract between Jenny and Freddy. In your analysis, you should clearly explain whether Freddy's statement in the preceding paragraph is correct in that it can constitute valid consideration.(25 marks)