Tutorial: You must answer ALL the questions. (Total 100 marks)

Note to Students: Please remember to support your analysis with reasons, case law and/or statutory provisions (where applicable).

Question 1

"Sing Eco-Foods" ("SEF") is a company that operates a chain of eco-conscious cafe outlets in Singapore.

SEF wishes to source for suppliers to provide cups and cutlery made from biodegradable and environmentally-friendly materials. SEF is aware of two potential suppliers in Singapore, which are Earth Materials Co. ("EMC") and Honest-to-Goodness Products ("HTG").

SEF sent the following email to both EMC and HTG on 1st December:

"Hi, we are looking for suppliers for biodegradable and environmentally- friendly cups and cutlery. Could you let us know your product range and your prices please?"

EMC replied to SEF via email on 2nd December as follows:

"We have an 'Eco-brand' range of cups and cutlery sets, which are made from environmentally-friendly materials. The cups are priced at $0.20 each, while our cutlery sets (comprising a fork, a spoon and a knife) are priced at $0.50 each."

SEF replied to EMC on 3rd December with the following email:

"Ok, we would like to order 1000 cups and 1000 cutlery sets. Please deliver them by the end of this month."

EMC provided a short reply to SEF on 4th December via email: "Ok, we will do so." On the other hand, HTG replied on 5th December to SEF's original email as follows:

"We accept your offer to be your supplier. Please contact our representative to place your order."

Explain whether there is a valid contract (i) between SEF and EMC, and (ii) between SEF and HTG. In your answer, you should identify and discuss the four (4) elements of a contract.

(30 marks)

Question 2

Recreation Bikes ("RB") is a business that operates a bicycle rental shop at East Coast Park. There is a notice board (measuring about 1 metre by 1 metre, with an obvious font in bold letters) placed next to the cashier which states as follows:

"1. The management of Recreation Bikes aims to bring you good quality bicycles at a low rental price.

2. While we have done our best to ensure our bicycles are well-maintained, we will not be responsible for any injury, property damage or other losses that arise in connection with the rental of our bicycles."

Tom rented a bicycle from RB, and while he did see the notice board before he made payment, he did not carefully read the words on it as he does not like reading detailed legal terms.

Unfortunately, after Tom had cycled for 30 minutes, the bicycle malfunctioned due to a faulty part that was not fixed as a result of the negligence of RB's maintenance staff. Tom was thrown off the bicycle, and he fractured his ankle. His mobile phone also slipped out of his pocket and the screen cracked.

Identify the exemption clause in this scenario and apply the legal rules under the four (4) points relating to the enforceability of an exemption clause to analyse whether the exemption clause is valid and enforceable against Tom in relation to (i) his ankle injury, and (ii) the damage to his mobile phone. (25 marks)

Question 3

Janice bought a piece of land, and she wanted to build a house on it. She engaged Perfectionist Contractors ("PC") on 1st January to design and construct the house for her.

Under the terms of the contract between Janice and PC, PC has to complete the works by the 30th of June, and the total sum Janice has to pay is $200,000 (with the following breakdown which is specified in the contract: $50,000 for the "design" component and $150,000 for the "construction" component). It is also specified in the contract that the materials used for the floor must be Oak wood with a panel size of 100 millimetres by 300 millimetres.

PC started work soon after, and submitted the design proposal to Janice on 1st February which was subsequently approved by her. The design component of the contract was therefore fully completed by PC.

However, PC experienced a shortage of manpower during the months of March and April. On 30th of June, PC has only completed 90% of the construction component of the contract. Due to a lack of resources, PC could not continue with the works. Nevertheless, PC felt that it had substantially completed the works and wanted full payment from Janice.

Janice measured the panels used in the flooring and found that they deviated from the contract specifications by up to 2 millimetres.

Examine whether the contract has been discharged by performance and conclude whether PC is entitled to any payment for the works it has completed. In your answer, please discuss the precise performance rule and all of the exceptions.

Question 4

(25 marks)

Mary appointed Edwin as her agent to sell a painting on her behalf. Mary gave strict instructions to Edwin not to sell the painting for less than $150,000.

Edwin contacted Howard, an art dealer, to see if he was interested to purchase Mary's painting. As the original painting was kept by Mary, Edwin had to arrange a meeting between Howard and Mary to view the original painting.

Edwin was sick on the day of the meeting, and therefore Howard met with Mary directly. When Howard saw the painting, he was impressed by its quality and wanted to buy it. Seeing Howard's keen interest, Mary told him the following:

"We are exploring multiple offers by interested buyers. If you are interested, Edwin is my agent to handle this transaction, so he will continue to liaise with you."

The next day, Howard contacted Edwin to express his interest to buy the painting. Edwin forgot about Mary's previous instruction not to sell the painting for less than $150,000. Instead, he entered into a contract with Howard to sell the painting for $100,000.

1. (a)Describe and explain two (2) ways in which the agency relationship between Mary and Edwin could have arisen in the above scenario. Support your answer

with specific examples based on the above scenario.

1. (b)Discuss whether Edwin has breached any duty as an agent. You are only required

to discuss one (1) duty that Edwin may have breached.