A contract is a written or an expressed agreement between parties to perform or to provide goods or services. Some of the elements of a contract include an offer, acceptance, consideration, mental and age capability, intent, and legal enforceable terms and conditions Under Singapore Commercial Law Chapter 8. In other words, a contract gets enforced when both the parties promised to do something, supports their promise with the valuable thing; both are of sound mind and intend to perform what they have agreed on under Chapter 8. Commonly, the contract is a written document signed by both parties. Other than that, there are also other forms of contracts that are considered as enforceable. Others are not enforceable and are applicable only if the court determines the responsibility on the part of either party (SingaporeLaw.sg. 2015). Because a contract is an integral part of the business, it therefore important that all parties involved in the contract understand the terms in the contract and the rights and duties of each party under the contract. Therefore, this paper examines the contracts between a seller and three different buyers, remedies of the buyers and legal position that each party has against Alan.
In this case, Alan wanted to sell a Business Law book that he previously used in his higher education to any willing buyer. He posted his offer on Facebook where he said that it is a compulsory book used in Commercial Law in Singapore. He, therefore, posted the book on his Facebook page under a condition that the money for buying the book should reach him by November 5th, 2015. Bernard one of his Facebook friends saw the post and placed his offer to buy it, but because he was to travel to abroad, he sent money that Alan received on 6th November 2015. On the other hand, Alan also got into a contract with Charleen and received payment for the same book. Lastly, Alan entered into a contract with Damien whereby Damien through short message service (SMS) made his offer on 4th November 2015 and then paid for the book when he met Alan the same day. Alan promised Damien that he will pass the book to him on 7th November 2015. However, when Damien and Bernard joined Kaplan Higher School where Alan completed his education, they found that the book was being given free by the school. They got furious.
Contract Between Alan and Robert
It can be said that there was a contract between Alan and Bernard because there was an offer, acceptance, and consideration. When Bernard saw the post, he agreed to buy the book, and because his intention was to buy the book as he promised Alan, he paid for it. Therefore, it was Alan’s time to perform his obligation as per the agreement. Under the Singapore Commercial Law chapter 8.8.8, the basic regulation is that parties involved in a contract must perform as exact as in the agreement, unless: (1) the parties that came into agreement changed terms of the contract, or (2) the acts of the party who has diverted from the contract terms are implicitly ratified by the act or non-act of the other party (SingaporeLaw.sg, 2015). If the one party did not accept the deviation from the contract terms, and the diversion has cost him a valuable thing that makes a bigger difference in the intended outcome of the contract, then the party that has deviated is said to have breached the contract.
Additionally, breach of the contract makes the nonperforming party liable for the damages caused to the injured party under chapter 8.8.9 of the Singapore Commercial Law. Consequently, the injured party gets relieved of his responsibilities under the contract by the breach of the non-performing party. Conversely, for the injured parson to support his claim, he should have performed his obligations as required under the contract until the time when the breach happened and must have done nothing unreasonable to make the other party perform his part (SingaporeLaw.sg, 2015). Moreover, breach of contract may provide the injured party with a right to terminate the contract and seek damages. Further, in some cases, the contract may get terminated because of frustration. In situations where frustration is evident, the court allows the immediate termination of the contract. The courts may not be sympathetic if the actions could have been predictable and so provided for by the parties in their contract.
Some of the remedies that Bernard may have in connection with this case are (1) Suit for Damages for Non-delivery. This remedy provides Bernard with an opportunity to sue Alan because of refusing to deliver the book to him after he had paid for the book. (2) Suit for Price. Under this remedy, Bernard has a right to recover the money because of non-delivery of the book. (3) Suit for Breach of Warranty. When a seller breached a warranty, or where the buyer is bound to treat the breach of a condition as a warranty breach, the buyer cannot refuse to take the goods (Campbell, 2015). Bernard may set up the violation of warranty in extinction or diminution of the cost he paid for the book, or he can sue Alan for damages for breach of warranty.
Contract Between Alan and Charleen
Alan and Charleen had a contract because Charleen realized that Alan was selling the book and his notes and made an oral offer on 2nd November 2015. Her intention was to learn more about Commercial Law and buying the book could have a step ahead of her. On 6th November 2015, she asked Alan if she could pay for the book then Alan nodded without paying attention to her request, thus, showing that there was an acceptance. Charleen after receiving her pocket money on the same day paid for the book, an indication that she performed her obligation as per the contract terms. Therefore, what was remaining was for Alan to complete his obligation by performing as per the terms of the contract where he was to give the book and the notes to Sharleen.
The law requires both parties to perform their obligations fully as per the terms of the contract, and any party that fails to do so breach the Commercial Law. Charleen can decide to sue Alan under failure to perform and seek for damages. The measure of damages when one violates the accord is the sum that will be able to recompense the affected party for a number of losses incurred through the breach. The affected party should get restored back to the position that she would have occupied if the contract would have gone through (SingaporeLaw.sg, 2015). The injured party is also lawfully entitled to the benefit of the bargain, which is the total income that would have accumulated to them under the contract. However, the affected party is not to be put in a better position than the position she would have occupied had the contract would have succeeded.
Remedies Available for Charleen
Some of the remedies available for Charleen include recovering of the damages for the loss she has suffered. Under the Unfair Contract Terms and also under the Unfair Terms in the Consumer Contracts Regulation 1999, the seller is liable for any breach. In this case, if Alan is in breach of his obligations as per the contract, then Charleen is entitled to recover the damages for her loss. Additionally, under section 53 and 54 of the Sales of Goods Act supports the buyer in determining the right measure of damages for breach of warranty, while section 52 empowers the courts to take action in case of breach of a specific performance (Adams &Zierdt, 2016). As observed in the case between Alan and Charleen, Charleen has the right to demand performance and if Alan will fail to perform then she can sue for breach of warranty. On the other hand, Charleen is also entitled to damages under a suit for the price. She has the right to demand her refund if Alan fails to perform his obligation.
Contract Between Alan and Damien
It is also evident that Alan and Damien entered into a contract after Damien heard Alan's offer from Bernard and then forwarded his intent through short message service (SMS). It shows that both parties accepted the offer. Because there was an offer, acceptance, and consideration, Damien proceeded to perform his obligated duty by paying for the book on the same day he accepted the deal. Being that he successfully accomplished his duty under the contract, he was entitled to a performance from Alan.
In case Alan fails to perform his duty as per the agreement, here are some of the remedies available for Damien. First, he is entitled to specific performance. In case Alan fails to perform his obligation, Damien is allowed to sue him for breach of specific performance (Martin, 2011). Second, being that Damien paid for the book together with the notes and Alan accepted payment, if Alan may not do as per the agreement, Damien is entitled to Suit for the price. He is also entitled to Suit for Damages for Repudiation of the contract before Due date (Campbell, 2015). This remedy provides Robert with an opportunity to adopt any of the two courses of action in case Alan repudiates the agreement before delivering the book to him. Damien may treat the contract as rescinded, and sue Alan for damages. Such damages may get assessed according to the prices present at the date of breach. On the other hand, Damien might also treat the contract as subsisting then wait until the delivery date. But, if Alan decided to perform as par the agreement between him and Damien, then, there shall be no damages, or else he may get responsible for the damages evaluated with regard to the prices on the day planned for delivery (Adams &Zierdt, 2016).
Alternative Dispute Resolutions
Alternative Dispute Resolution (ADR) is a term used in referring to different ways of solving a dispute. These ways may include mediation, arbitration, and neutral evaluation. These are the alternative ways of solving a dispute without having to go to court (Man, 2016). Under mediation, a mediator who is an impartial person helps the parties to reach an acceptable resolution of the dispute. A mediator does not make a decision on the dispute but tries to make the parties talk so that they may be able to solve the problem by themselves.
Moreover, arbitration involves a neutral person known as an arbitrator. He or she hears the evidence and arguments of the parties from every side then make a decision on the outcome of the disagreement (Richard Stim, 2017). This form of ADR is less formal, unlike trial. Arbitration may be in form of binding or non-binding. Binding arbitration is where parties waive their rights to trial and agree to accept the decision of the arbitrator as final and nobody has the right to appeal. Conversely, non-binding arbitration allows the parties to ask for a trial if they failed to accept the decision of the arbitrator (Spegel, 1994). Lastly, in the neutral evaluation, every party is given a chance to represent the dispute to an evaluator who is a neutral person. He gives his opinion on the weaknesses and strength of the case and how the disagreement can get resolved, but his opinion is not binding.
Pros and Cons of ADR
ADR are good because they are simple, faster, flexible and more efficient for scheduling litigation. Conversely, if the dispute needs a specialist, the parties can choose an arbitrator who has technical knowledge in that field, unlike in the court where a judge may be unfamiliar with such issues (Richard Stim, 2017). However, they also have the disadvantages. Under binding arbitration, no party is allowed to appeal unlike in the case of the court judgment. The case can only be revisited if a party can prove that the arbitrator was biased in his decision (Teo & Aibinu, 2007). Unlike in the courts, the parties are not allowed to disclose the information about their cases to the other party. It means that there is no automatic discovery unless it is provided in the arbitration clause. Moreover, the cost of ADR is significantly high that in some cases they exceed the litigation costs.
To conclude with, whether a contract is verbal or written it still binds the parties involved in it. Therefore, it is vital for the parties involved in contracts to perform as per the agreement they have entered. On the other hand, it is a significant thing for one know the contents of the contracts they getting into before agreeing to its terms. Moreover, it the right of both the seller and the buyer to terminate the contract for any breach of conditions in the contract and demand for damages as long as there is proof of the breach.
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