Notes for Semester 2 2014 Business Law exam
Notes for Semester 2 2014 Business Law exam
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This 10 page Study Guide was uploaded by Jade Notetaker on Saturday October 10, 2015. The Study Guide belongs to at Nanyang Polytechnic taught by in Fall 2014. Since its upload, it has received 34 views. For similar materials see Business Law in Business at Nanyang Polytechnic.
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Date Created: 10/10/15
BLAW in general 5 sale of goods Relating laws Sale of goods act SGA Unfair contract terms act UCTA Common law The contract for sale of goods is the transfer of ownership of Property legal ownership of goods and Goods tangible items For money consideration price Of course goods don39t mean land houses Implied terms These are conditions if there is a breach of contract where the innocent party can sue Section 12 Implied condition seller has right to sell goods Seller must own it If he does not the buyer is entitled to cancel the contract and get a refund Even if the seller didn39t know he had no right to sell goods rowland car stolen Section 13 Implied condition that goods match description If the goods don39t match the buyer will be able to reject the goods and obtain refund Also he can sue for damages for any loss he got This is all on the basis of the description by the seller For example age quantity speci cation of the goods Like when a buyer orders goods off a catalogue only Even if the buyer gets a chance to inspect Beale car Only when a buyer relies on his own judgement then there39s no sale by description and he likely can39t get refund Hurlington art Section 142 Implied condition that goods are of satisfactory quality commercial quality fit to sell 0 Up to standards a reasonable person thinks is okay Selling goods is only in the course of business and at the time of sale Buyer is entitled to reject goods and get refund Sue for damages too Factors considered to decide satisfactory quality Fitness for all common purposes 0 Goods which can39t perform the functions they39re usually expected to perform Appearance 0 Bad if something has numerous scratches and such Free of minor Defects 0 Important if defects affect enjoyment or cause harm Safety 0 Goods must be safe to use Durability 0 Should remain in good condition for a period of time Rogers MV Finally Losing the right to reject goods a Defect is drawn to buyer s attention before contract is made b Buyer examines goods before buying and it should have revealed the defect Section 143 Implied condition as to fitness for purpose Sells goods in course of business and seller informed by buyer of the purpose of the goods required If they39re not fit buyer can reject goods and obtain a refund And claim damages from seller BUT buyer cannot reject goods if he didn39t rely on seller s judgement in choosing the goods Payment deliverv and acceptance Payment If I pay you you deliver when goods are ready to be delivered you have to pay will happen at the same time Delivery Delivery is usually at seller39s place of business Unless you have agreed to send the goods to your house Acceptance Where the goods are not of satisfactory quality or unfit for purpose or do not correspond with description Buyer is entitled to reject goods and ask for refund However Once a buyer accepts goods he cannot reject them and can only claim damages Such as repair costs It39s taken as accepted when a he expressly indicates he accepts b he does something like selling a part of the goods and therefore can39t return it as a whole c keeps the goods for more than a reasonable time without telling the seller he rejects the goods Exemption clauses It39s a term to exclude the liability of the party breaching the contract Under UCTA Even if there39s stuff stating quotgoods sold can39t be returnedquot The buyer can still return Buyer39s remedies lf seller breaches contract Buyer has following remedies 1 damages for non delivery Seller fails to deliver buyer can sue Buyer normally expected to buy a sub then the amount of damages is between the contract price and market price 2 specific performance Will be told by court if actual damages not good enough to give innocent party 3 rejection of goods Return gt refund gt rescind 6 defects of contract MDUMI From voidable to void Misrep Duress Undue influence Mistake Illegal Faults in the formation of contract When a contract is Void the defect is so bad contract is treated as like it never happened Cannot be enforced Voidable contract is still valid till innocent party doesn39t want contract anymore set aside VOIDABLE first Now Misrepresentation It39s a false statement of fact That caused the innocent party to go into the contract amp relevant When truth is discovered contract can be cancelled and innocent can claim damages Elements of misrep Representee must show that a representor has made a false statement of fact b statement is material 0 it39s so important that it caused the representee to go into the contract c representee relief on statement in deciding to enter the contract 0 And believed in the statement did not check anything else 3 types of misrep 1 innocent 0 Statement is made honestly and there39s no reason to think it39s false 0 Remedy rescission Party misled generally has no right to damages Unless it39s fairer to do so 2 negligent o This statement was made not caring if it39s true or not 0 Remedy rescission amp damages 3 fraudulent 0 Knowing it39s not true 0 Remedy rescission amp damages Limits to ridht of rescission a lapse of time b party misled af rms contract full knowledge of actual truth and chooses to continue c restitution is impossible party wants to rescind must return goods to representor before he can get his money back Duress This is when he is forced into contract under a threat and doesn t give his consentto terms He can choose to set aside contract 3 main types a to the person threats of physical violence to cause bodily harm or loss of life to the person or an immediate family member Armstrong b to the goods Threats to the party39s goods c economy duress When one party uses commercial pressure to get other to agree to terms The innocent party may be able to set aside contract if he can prove There39s a threat to carry out civil wrong breach the contract He had no choice but to agree Atlas Christmas time Undue influence Entered the contract not out of his own will and was due to pressure or threat Now the 2 types are 1 Actual undue influence The party that wants to set aside the contract has to prove he was under the influence 2 presumed In some cases the law thinks there is influence W hence the name So the innocent party doesn39t do anything However The wrong doer has to prove there39s no influence by showing innocent party exercised his own will Where39s this usually in Doctor patient Parent child Relationships which are usually based on trust and confidence amp transaction isn39t explainable on relationship alone Lastly undue influence and third parties indirect undue influence o This affects their rights too Husband made his wife do something like mortgaging and another party like the bank could be called to see if they got her consent 7 defects in contract ll Now we have the VOID contracts Mistake Just because a contract is made under a mistake it doesn39t make it void initially It39s on the hope contracts should always be upheld However there are mistakes that allow contracts to be void These 3 are fundamental mistakes super important 1 common mistake It39s when both parties enter the contract on the same mistake that the important fact exists when it doesn39t The parties wouldn39t have even contracted if there wasn39t such a thing For a common mistake to be serious enough it has to relate to either a subject matter of contract Hastie corn b whether they want to form the contract 0 Both parties think the contract is able to be performed when it can39t sheikh sisal 2 mutual mistake One party wanted to deal with one thing and the other is another thing Due to this mistakemisunderstanding the two did not agree at all Raffles quotPeerlessquot 3 unilateral mistake One party makes the mistake and the other is aware of it The mistake can fall under a important term of contract eg price Contract will be void One party knows that price is wrong Digitallandmall printer b identity of person contracted with There is a difference between the mistake of someone else altogetheridentity and someone39s appearance characteristics beauty money Eg a man wanting to marry a woman Woman is a man Or Woman had plastic surgery c signed document 0 The general rule is beyond misrep and all a person is bound when he signs a contract However If it39s signed under mistaken belief and the document is different from what he innocent party thought lt39s void Under nonest factum this is not my deed Innocent party must show a he was induced to sign by trick fraud b nature of contract and c he wasn39t careless in signing the document So he won39t be bound if he can show these 3 thinas Omar Illegal contracts Law sometimes won39t allow parties to contract if it39s illegal And it39s by either common law or statute At common law They39re either against public policy or involve something illegal Examples 1 commit a crime 2 defy tax authorities 3 interfere with justice By statute Gaming or wagering contracts Though in Singapore it39s legal for the casino 4D Also loan sharks These are unlicensed monevlenders and the law won39t help them take legal action to recover debt of borrower Effects of illegality General rule it39ll be void and cannot be enforced One party can39t sue the other for failing to perform Also Any money or property under the contract can39t be recovered Restraint of trade It39s when a person restricts another in carrying out his business trade It39s generally void and unenforceable cause it39s against public policy Usually found in a employment b sale of business c solus trading agreement a Employer employee An employee may agree that after he leaves he won39t set up a competing biz or work for competition blah blah This is technically still against his rights and against public policy 0 However 0 Court will grant employer the ROT if he can show that thumb and 4 finger rule He39s got any one of legitimate interest that needs protecting trade secrets customer connection good rep he already built with them trained workforce effort has been put in should not allow evil other guy to poach them AND for this ROT of legit interest to be reasonable Court will decide upon allthese factors being present area restriction shouldn39t be too wide If it39s Singapore based leave it to Singapore duration period of restraint not too long 20 vs 1 year of not competing position if he employee held a high enough position he knows things like CEO or secretary same industry restriction to cover only the activities threatening old company eg You make beer the ROT doesn39t make sense for it to cover soft drinks of other companies Forster glass bottles b businesssssyyyyy This is the ROT where seller of biz agrees not to set up a similar one for some time in the same area When someone buys a biz usually the price also includes goodwill rep the biz had before Courts are more willing to uphold this than employment 39Course buyer must still show area and period are reasonable c Solus trading agreement lt39s when a person sells only products of one manufacturer like coca cola in return of bene ts The restraint by the manufacturer must be reasonable still Esso petrol 8 discharge of contract When a contract comes to an end Discharged by 1 agreement neither did the contract but both agree to excuse each other 2 performance Everything has to be done When each party finished what they promised in a precise and exact manner Problems with it How to get money Apportionment Act periodical payment fixed intervals eg salary rent Substantial performance done almost all can claim minus defects Prevention of perf other party stops you from performing You can claim on quantum meruit basis paid amt on how much work you did Accept Partial perf you do partial perf and other party accepts also quantum Divisible contract separate smaller transactions 3 breach Anticipatory breach you indicate to other party you don39t want to perform contract before date of performance Injured otherhe party can Take it and accept breach Contract discharged and will claim compensation Or Leave it and let contract go on But there may be problems like frustration You see he must carry out his part too Otherwise he will breach the contract If there39s fthen he has no remedy Avery 4 frustration The unforeseen event beyond control of parties making contract impossible to perform 4 Examples Destruction subject matter of contract destroyed Illness incapacity contract for personal services person is ill or incapacitated Government acquire gov acquires subject matter so contract is gone Law so contract Illegal change in law making activities illegal However these are when contracts are not frustrated or discharged but there39s a change in circumstance 1 it becomes difficult expensive 2 selfinduced frustration you made the error Effects of frustration Under Frustrated Contracts Act for 1 paid can get back 2 no need to pay after 3 expenses can get back 4 got benefit during must return an amount to other party It doesn39t apply to 1 carriage of goods by sea 2 insurance 3 sale of specific goods where they perished before risk passed to buyer Force majeure clause States what39s to happen if certain events occur It typically deals in events that aren39t the fault of either party RDC Eg war natural disasters They39re important as they allow party to treat contract as discharoed when they othenivise could not frustrate the contract 9 remedies When a party fails without an excuse to get out of performing he39ll be in breach of contract Remedies now has two main groups Common law and equitable CL remedies are awarded as of right so as long as the person can show there was a breach he39s entitled to remedies court has no choice E remedies are up to the court to decide Even if there39s a breach lt decides based on stuff like behaviour of parties potential hardships etc Common law remedies 1 damages and 2 quantum meruit 1 Damages are monetary compensation warded to the injured party when there39s a breach of contract They39ll be compensated the right amount and the courts will put the injured party back to the situation as if the contract has never been breached Divided into 3 categories a damages for pecuniary loss Compensation for monetary loss Eg Loss of profit cost of rectifying defects Generally can be recovered if it can be proven b nonpecuniary Not a direct monetary loss and you can39t claim back damages Eg of these losses are mental distress disappointment reputation However there39s an exception If the main point of the contract was to provide enjoyment Eg a holiday package Assessment of damages there39s a limit on the amount the court can award They won39t order the contract breaker to compensate for every loss suffered So the 2 important limitations they39ll consider are 1 remoteness of damage 2 mitigation 1 the injured party can claim losses if for those that are directly resulted of the breach of contract So it states that the contract breaker will be liable for any natural losses you get from the breach of contract unusual losses are only allowed if it was told to the contract breaker Then the innocent party could retrieve damages Difference is shown in case Victoria laundry and buying a boiler 2 it39s to take reasonable steps to minimise your losses Eg If a seller fails to deliver goods the buyer does have to try and find a substitute Liauidated damaaes It39s a clause The preagreemenf of the genuine preesfimate amount of damages just in case the contract is breached Common in quotconstructionquot contracts Then there39s penalty clause In the contract the amount of damages is much greater than the genuine preestimate 0 it39s like to punish the other party if they do breach the contract Bears no relation to what the breach could be it39ll be totally excessive And usually the court will not rule for this penalty cause the injured party could be overcompensated Dunlop Quantum Meruit lt39s when a party claims a reasonable value for the work he s done This is an alternative remedy to claim for damages up to the courts Likehe was contracted for a book he did half before publishers cancelled he can39t completely perform So he can claim the half sum Equitable remedies x solutions 1 soecific performance It39s for rare items sale of a house items with rarity amp limited supply The innocent part will not be adequately compensated by money And the other party is compelled to carry out the contract 0 it39s SP if the monetary damages aren39t good enough to actually compensate the innocent one Court won39t order SP for contracts Personal service employment Requiring constant supervision by court 2 iniunctions It39s a semiremedy Stops the contract breaker from doing something he39s not supposed to Prohibitory injunction is to stop the person from doing something he promised not to do court ordered gt even not being employed by another employee Or copyright stuff MandatOIy injunction is when the court orders you have to do something to restore the situation before the breach 3 rescission Court will make it as if the contract was never made in the first place
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