Among all the doctrines of contract law, perhaps the most academic ink has been spilt on the doctrine of consideration. Broadly, consideration is a benefit (or detriment) provided or suffered by one party, in exchange for the other party entering into the contract.
In line with the principle of freedom to contract, the courts will give effect to the intention of the parties in creating their contract, and also hold them to their duty to perform their primary obligations under such contract. However, where the contracting parties agree to vest certain decision-making powers to a specific (non-judicial) entity, to what extent may a court review the exercise of powers by such entity?
Can an agreement which is formed purely through the operation of algorithms be considered a binding contract? If so, can such a contract be unilaterally cancelled because of a mistake, where such mistake resulted in trades being concluded at 250 times the market rate?
Business negotiations can be lengthy. In the course of negotiations, parties might make a verbal promise to do or not do something. There might also be emails recording the promise or showing that there were verbal negotiations. But if the promise does not end up in a written contract, can you hold the other party to it?
Written by: Nicole S Ng* I. Introduction When good employees leave, there is often a risk that they will join a competitor or set up a competing business. If you are the employer, the employment contract might protect your interests through a confidentiality clause preventing the employee from using or disclosing confidential information. It might … Continue reading When Employees Leave: Confidentiality and Non-Compete Clauses
Contractors may still be liable for latent defects found years after completion, as they are by definition defects which are not readily apparent or discoverable. However, what if the defect was the fault of a supplier or subcontractor? This article will focus on a contractor’s liability in negligence and the defences he can use to escape such liability.
Liquidated damages (“LD”) clauses are a common measure for an employer to mitigate against delays caused by the main contractor. This same clause is often featured in subcontracts – they minimize the main contractor’s exposure to liability for delays caused by the subcontractor, and pass down the liability for LDs to the subcontractor. Unsurprisingly, LD clauses are one of the most common causes of disputes between main contractors and subcontractors as the payable amount can be quite substantial. This commentary will seek to explain the potential liability of a subcontractor for LDs arising from delays, and consider possible defences to be raised.
Where a contract is illegal, the contract is void and the courts will not enforce the contract. Despite the simplicity of the foregoing logic, the concept of illegality in contract law – often used as a defence mechanism in lawsuits – has long vexed students and practitioners alike. As Lady Justice Gloster in Patel v Mirza (“Patel”) remarked, it is “almost impossible to ascertain or articulate principled rules from the authorities relating to the recovery of money or other assets paid or transferred under illegal contracts”. In Singapore, the Court of Appeal (“CA”) in Ting Siew May v Boon Lay Choo (“Ting Siew May”) sought to overcome this difficulty by establishing a two-stage approach to the application of the principles of statutory illegality, common law illegality and restitutionary recovery. In the later case of Ochroid Trading Ltd v Chua Siok Lui (“Ochroid”), the CA affirmed the Ting Siew May framework and the principles encapsulated within. In coming to its decision, the CA in Ochroid also considered and rejected the approach adopted by the UK Supreme Court in Patel, which, essentially, determines whether a contract should be struck down for illegality based on a range of factors.
The recent UK Supreme Court’s decision in Rock Advertising Limited v MWB Business Exchange Centres Limited was highly anticipated. Modern litigation rarely raises new fundamental issues in the law of contract; this case, however, dealt with two. The first issue was whether a contractual term providing that an agreement can only be modified in writing and must be signed by both parties was effective. Such terms are commonly referred to as “No Oral Modification” clauses. The second issue was whether an agreement to vary a payment obligation was supported by consideration.