July 2016

Question 3

Mark has been a daily customer of Aromatic Cafe ever since the cafe was opened eight years ago. One day, when the barista was handing him a hot cup of coffee over the counter, the hot coffee spilt onto Mark, scalded his hand and caused third-degree burns.

Mark demanded compensation from the cafe. However, Aromatic Cafe pointed to the A4-sized notices on its tables and at its entrance doors which stated, "We shall not be liable for any bodily injury to our customers. You are personally responsible for your own safety." These notices were recently put up, after the barista had spilt a hot cup of tea on another customer two weeks ago. The incident was reported in online forums and the post went viral, with many customers complaining that the staff at Aromatic Cafe was careless.

When designing the notices, the management of the cafe tried to be creative and ended up using different colours and cursive fonts. Viewed from a distance, the words on the notice were barely legible. Up close, the words were legible if the customer took time to read the notices.

(a) Analyse the exemption clause and state your view on whether it is valid and enforceable. Support your analysis with case law and the relevant provisions of Unfair Contract Terms Act, Cap. 396 of Singapore. (20 marks)

(b) Demonstrate a real-life situation where an exemption clause is likely to be incorporated by signature. Discuss whether the clause is likely to be valid if the person did not read the contract, even if the person signed it. In your analysis, you should cite relevant case law. (5 marks)

Question 4

Peter intended to sell his apartment as he was relocating overseas for a new job. He was looking for a contractor to do some minor renovations to the apartment, so that he can sell it for a higher price.

He asked Julie to obtain three quotes from contractors who were interested in this renovation work. She felt that it was very troublesome to source for three quotes. Hence, she went to Ben, her relative and told him to provide a written quotation and just start the renovations.

Before providing a written quotation, Ben decided to meet with Peter and Julie to discuss some of the project specifications. Peter was very happy with Julie's efficiency in securing a contractor at such short notice and kept telling Ben that "Julie is the best. I trust all her decisions as she is always so detailed and careful."

On hearing that, Ben was reassured and submitted a written quotation for $50,000 for the works, especially since Julie told him to submit a high quotation so that he can share part of his earnings with her. She jokingly said, "Surely, I deserve some commission from you!" and when Ben nodded, she engaged him as the contractor for Peter.

When the renovation work was completed, Peter was so shocked to see the invoice for $50,000 and refused to pay.

(a) Analyse whether Julie had actual and apparent authority to engage Ben, on behalf of Peter. Conclude whether Peter is liable to pay $50,000 to Ben. Advise Peter on two (2) possible steps that he can take in the future when appointing agents, so as to prevent a similar situation from occurring.(20 marks)

(b) Identify and discuss two (2) duties which Julie, as an agent, is likely to have breached. (5 marks)