Question 1

Fukugen Pte Ltd ("Fukugen") is a construction company that specialises in the restoration of old landed houses. Their website states that they are an environmentally friendly company that uses eco-friendly materials from sustainable sources in their restoration work.

Abby has recently inherited an old Peranakan-style terrace house from her deceased grandaunt. She contacted a few construction companies for quotations to restore the terrace house based on its original Peranakan-style design. Fukugen's architect proposed a design which matched Abby's budget and her desire to be environmentally conscious in carrying out the works.

On 1st September of last year, Abby signed a contract with Fukugen to restore the terrace house for $1.5 million. Ten percent (10%) of the contract sum was paid at the signing of the contract, with instalments of the remaining amount to be due and payable upon completion of various stages of construction, and the last instalment to be paid on the completion date of 1st December two years later.

Under a section in the contract which is labelled "Important Warranties", Clause 30 states as follows:

30. For the carpentry works, Fukugen shall use only either reclaimed wood or new wood obtained from sources which have been certified by the Forest Stewardship Council ("FSC").

Where a wood source is described as being "FSC-certified", it means that the wood has been harvested from forests in an environmentally and socially responsible manner. The FSC certification was important to Abby, because of her desire to be environmentally conscious.

Upon the signing of the contract, Fukugen proceeded to start work on restoring the house. However, a few months later, due to a private dispute between Fukugen and their original wood supplier, Fukugen faced a shortage of wood (which is FSC-certified). In order to save on the effort of finding another FSC-certified wood supplier and the higher costs associated with it, Fukugen decided to use an alternative source of new wood which was not FSC-certified, but which was otherwise of the same quality as the FSC-certified wood in all other aspects. With this issue resolved, Fukugen managed to continue their work without further disruption.

Around this time, Abby went to inspect the works on her house and found out that the wood used was not FSC-certified. At this stage, the house is not yet completed but Abby wishes to terminate the contract with Fukugen.

Examine Clause 30 and explain whether it should be treated as a condition, warranty or innominate term using the traditional approach to the classification of terms. Describe the modern Singapore approach in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd & Another Appeal (2007) and apply it to this scenario to conclude whether Abby is entitled to terminate the contract on the basis that Fukugen did not use wood that is FSC-certified. (Please refer to the attached link for the reference - https://drive.google.com/file/d/1QDWgrrG9DGJS6GzMz99A-VyyyBCVMZkt/view?usp=sharing)

Question 2

Indulgence Aesthetics Clinic Pte Ltd ("IAC") is a medical company that specialises in aesthetic medicine, an extensively broad term for medical specialties that focus on improving cosmetic appearance, whether on the hair, face or body. They have a one-stop clinic located at Orchard Road, called "IAC ORCHARD", where customers would visit to receive various medical aesthetic treatments with the aid of medical-grade equipment.

Angela is a dermatologist who has been trained in England, and who has worked and lived there for 10 years. Because of her overseas training and experience, she was employed as an aesthetic doctor at IAC ORCHARD. There are two other aesthetic doctors practising at IAC ORCHARD.

Angela proved to be a very popular aesthetic doctor who enjoyed great rapport with her clients at IAC ORCHARD. Many of these clients trusted Angela implicitly and would procure whatever treatments Angela recommended, so much so that Angela's clients accounted for an average of 60% of IAC ORCHARD's monthly income. After working at IAC ORCHARD for three years, Angela decided to leave IAC ORCHARD and set up a dermatology clinic to practise in dermatology (i.e. the branch of medicine dealing with the skin and its diseases). She chose to set up this clinic in a shopping mall next to IAC ORCHARD, and she managed to accomplish this within 3 months of leaving IAC ORCHARD.

IAC is not happy with Angela and wants to sue Angela for breach of her employment contract.

The provision which is in contention is Clause 14, which is set out below:

"In the event that an employee leaves Indulgence Aesthetics Clinic Pte Ltd (IAC), whether by resignation or dismissal, the employee shall not, for a period of 12 months after such cessation of employment, practise any form of medicine directly or indirectly related to aesthetics within a 5-kilometre radius from IAC ORCHARD, and a 5-kilometre radius from any other new IAC clinic that is set up whether before or after the employee's cessation of employment at IAC."

(a) Discuss whether IAC is able to enforce Clause 14 against Angela, based on the legal rules relating to restraint of trade.

(b) Give two (2) suggestions to IAC on what they should do with their employment contracts (between IAC and their aesthetic doctors) to prevent this problem (relating to the potential non-enforceability of Clause 14 due to the legal rules relating to restraint of trade) from arising, with brief explanations for your suggestions. Your suggestions should be based on contract law principles.