July 2017: Tutorial preparation for exam

AD Printers Pte Ltd ("AD" or the "Company") is a company manufacturing and selling 3-D printers. Bernard is the Sales Director of AD and was specifically instructed by the Chief Executive Officer of AD to achieve S$1 million in sales per year. At a recent networking event that he organised to meet potential customers, Bernard spoke with Charrie and Diana who were looking to purchase a 3-D printer.

Charrie had never purchased anything from AD before, and was concerned that the print quality would be poor and that the printer might break down. She was purchasing the printer for her own use, as she was interested in making little figurines for her own personal collection.

Diana was similarly concerned, especially since she was a jewellery designer who sells her creations on her blogshop. She told Bernard about her blogshop, and that she also had an especially important project with a corporate client where the items must be delivered by 1 December.

Bernard assured both of them that the product warranty covers 24/7 technical support, repair services and a replacement printer in the event that they need to send in the purchased printer for repairs. AD did intend to roll out such support, repair and replacement services in the future. However, it has decided to defer offering such services until it has ramped up the number of its support staff and stock of its spare 3-D printers. Hence, AD has instructed all its staff not to offer such a warranty, but this instruction has slipped Bernard's mind at that time.

Hearing Bernard's assurance, Charrie was relieved. She asked Bernard to email her a quotation. When she received the quotation on Monday, she saw that it contained the following terms:

-3-D Printer (Model 3X-111) at S$1,500

-Delivery on Tuesday

-Usual warranty applies

-AD shall not be responsible for any loss or damage suffered arising from the installation and use of the 3-D printer

She was concerned about the price, and immediately emailed Bernard and requested to pay S$1,500 in two instalments. Bernard did not read her email and simply delivered the printer the next day. After a few print jobs, the printer suddenly broke down and caused a short circuit in Charrie's home. An electric fire occurred and caused extensive damage to Charrie's study room. The sparks from the printer caused burns to Charrie's hand as well. When she called AD's technical support, no one answered the phone for a few days. When she finally managed to get through to AD's staff, they insisted that there were no such services as promised by Bernard.

Meanwhile, Diana has also purchased a 3-D printer from AD. Although the delivery date was scheduled for 1 October, the printer was still not delivered by 1 November. Diana was very worried as she had already accepted pre-orders from her blogshop and the deadlines for delivering those orders as well as the order for her corporate client were nearing. In addition, she had already paid for three months' worth of online advertisements. She called AD many times but was told that AD does not have any stock yet for the printer model that she ordered.

Question 1

Advise AD whether there is a valid contract formed between the Company and Charrie. In your answer, you should explain and analyse the four (4) key elements of a valid contract. You are also expected to refer to the relevant provisions of the Electronic Transactions Act, Cap. 88 of Singapore, where appropriate. (25 marks)

Question 2

Assuming that there is a valid contract between AD and Charrie, analyse the exemption clause and state your view on whether it is valid and enforceable. Explain clearly whether Charrie is able to claim for the damage caused to her study room and the burn injury caused to her hand. In your answer, you should identify the exemption clause and support your analysis with case law and the relevant provisions of the Unfair Contract Terms Act, Cap. 396 of Singapore. (25 marks)

Question 3

Assuming that there was a breach of contract by AD, examine the four (4) aspects of damages which Diana must consider if she wishes to claim for damages from AD. Conclude with your view on what are the likely damages for which Diana can claim. (25 marks)

Question 4

Explain and analyse how the agency relationship between Bernard and AD could have arisen. Discuss the two (2) types of authority which he would likely possess and whether he had breached any of his duties as an agent. You should provide relevant examples, based on the facts given in the scenario, to support your analysis. (25 marks)