Tim, an enterprising businessman, was looking to rent a warehouse for his expanding storage

business. Prime Co owns a huge warehouse complex which it commercially leases to several

tenants. Tim contacted Prime Co and expressed an interest in one of the units in the complex,

and Prime Co assigned their employee, Alex, to attend to him. Alex turned up with the keys

and access cards and showed Tim the vacant unit in the warehouse and its surroundings. After

some negotiation, Tim and Alex signed the lease agreement. Although Tim insisted that a

director of Prime Co should also co-sign the lease agreement, the glib-tongued Alex assured

him that he had Prime Co's authority to enter into the lease agreement. Allayed by Alex's

assurances, Tim then paid Alex the rental deposit.

Required

Answer all the questions, treating each part as separate and independent (unless otherwise

instructed):

a) When Tim moved in the warehouse a week later, Prime Co informed him that they had

no record of any lease with him and that the warehouse had been leased to another tenant

the day before. Prime Co added that Alex was only a clerical staff with no authority to

enter into any lease agreements. Tim was also dismayed to discover that Alex had quite

abruptly resigned and ran off with his rental deposit.

Advise Tim whether he can enforce the lease agreement against Prime Co and, failing

which, whether he has any remedies against Alex to recover his rental deposit.

(b) Briefly explain whether Tim can enforce his lease agreement against Prime Co in each

of the following separate situations:

Situation 1: Assume that Alex is the Leasing Manager of Prime Co. As a matter

of industry practice in Singapore, leasing managers have the authority to negotiate

and enter into leasing transactions on behalf of their principals.

Situation 2: Assume that Alex is the Leasing Manager of Prime Co, with express

authority to enter into leasing contracts with clients and charge rentals not

exceeding $10,000 a month. Tim is not aware of the monetary restrictions imposed

on Alex's authority. As far as Tim knows from speaking to other tenants in the warehouse, Prime Co has always honoured the lease agreements signed by Alex.

Tim also learnt that Alex had signed a $15,000 a month lease agreement of a

comparable unit with a tenant which Prime Co did not object to. Relying on this,

Tim signed the lease agreement with Alex for $15,000 a month.

(c) Despite Alex's lack of authority to enter into the lease agreement, the General Manager

of Prime Co found out about the unauthorised lease a week later but was delighted with

the transaction and complimented Alex for his resourcefulness, and allowed Tim to

proceed with the lease. On the other hand, Tim regretted his hasty bargain with Alex and

intended to avoid liability when he found out that Alex never had such authority.

Advise Prime Co whether it can hold Tim to the lease agreement.

(d) With reference to the facts in (a), does Prime Co have valid ground to terminate Alex's

contract of employment?

Please help me out on this! I need help on how to answer these questions with reference to agency laws from Singapore Business Law.

Thanks so much!!