Law

• Representations


  Statements made during negotiations which do not become part of the contract
• Terms


  Statements which become part of the contract
• Factors important in deciding if a statement amounts to a term or representation


  • Parole evidence rule
  • Relative expertise of the parties
  • Importance of the statement
  • Time
• Parole evidence rule


  Only statements included in written document are terms
• Conditions


  • Of primary importance and enables injured party to repudiate & claim damages (Poussard v Spiers [1876])
• Warranties


  • Less important terms and allows the injured party to seek only damages (Bettini v Gye)
• Innominate, intermediate or indeterminate terms


  • Looks to the effect of the breach (Hong Kong Fir Shipping v Kawasaki Kisen Kaisha). Used when its not clear what the effect of breach of the term was intended to be.
• Exclusion clauses (Unfair /Exemption terms)


  Used by parties to restrict liability for breach of contract or negligence
• Contra proferentum rule


  Interpreted against the party at fault and is seeking to rely on it
• Fundamental breach


  How far can exclusion clauses exclude liability for failure to perform (Photo Production v Securicor)
• Incorporation of exclusion clauses


  • Must be contained in a contractual documents and brought to the attention of the other party before or at the time of contracting (Olley v Malborough Court)
  • A party is bound where they sign a contract irrespective of whether they were aware of the terms or not (L'Estrange v Graucob)
  • Reasonable notice of unfair terms (Thompson v LMS Railway), if unusual, take further steps (Interfoto Picture Library v Stilletto)
  • Incorporation through previous dealings
  • Incorporation through trade custom
• Misrepresentation


  Untrue representations which induce one party to contract
• Misrepresentation - Elements

  • It must be a statement of fact not opinion or intent
  • Must induce the other party to contract
  • Statement must be addressed to the party mislead
  • Statement must be untrue
• Types of misrepresentation

  • Fraudulent: untrue statement made knowingly (rescission and damages [under tort of deceit, not contractual])
  • Negligent: false statement made carelessly (damages [Under Misreprestation Act, Cap 69] and rescission given at the courts discretion)
  • Innocent: has reasonable grounds for belief in the truth of the statement (rescission)
• Mistake

  The erroneous belief at contracting that certain facts are true; renders contracts void or voidable
• Illegality

  Void by public policy, morality, criminal, statute
• Duress

  Lack of consent (voidable)
• Undue Influence

  Overbearing over another (voidable)
• Discharge by performance

  • Both parties have fully performed their obligations; must be complete and exact (Cutter v Powell)
  • Substantial performance (Bolton v Mahadeva and Hoeing v Isaacs)
  • Partial performance (quantun meruit)
  • Prevention of performance (Planche v Colburn)
  • Severable/divisible contracts
  • Time of performance – not an issue unless specified) Charles Rickards v Oppenheim; unless when stated; otherwise, within reasonable time
• Discharge by agreement

  • Depends on type (bilateral or unilateral)
  • Accord (agreement) and satisfaction (consideration)
• Discharge by breach


  • Actual/repudiatory (depends on type of term breached i.e. condition or warranty)
  • Anticipatory (Hochster v De la Tour)
• Discharge by frustration

  • Change in circumstances making performance impossible or depriving a contract its commercial purpose (Taylor v Caldwell, Krell v Henry, Herne Bay Steam Boat v Hutton)
  • Not the fault of either party
  • Not foreseeable
• Exceptions to frustration

  • It is more difficult or expensive to perform (Davis Contractors v Fareham UDC)
  • Alternative mode of performance is possible (Tsakiroglou & Co Ltd v Noblee Thorl GmbH)
  • Impossibility of performance is the fault of either of the parties (Maritime National Fish v Ocean Trawlers)
  • Where there is a force majeure clause: it applies instead of the law of frustration
  • Where the frustrating event could be foreseen (Peter Cassidy Seed Co Ltd v Osuustukkuk-Auppa)
• Damages

  • Award of money to compensate injured party
  • Put injured party in position they would have been had the contract been performed
  • Given for financial loss, damage to property, personal injury, distress/disappointment (Jarvis v Swan Tours 1973)
  • Assessed based on two tests: remoteness of damage – cause & effect; loss caused by breach' chain of causation – irrecoverable if too remote; nominal damages (Hadley v Baxendale 1854 – natural consequence and contemplated). (Victoria Laundry v Newman Industries 1949) and measure of damages - actual loss not speculative (Anglia Television v Reed and Thompson v Robinson)
  • Liquidated (Dunlop v New Garage), unliquidated (actual loss) damages or penalties – extravagant; excessive (designed to threaten performance, not genuine pre- estimate of loss)
• Equitable remedies

  • Given if damages are inadequate; depending on type of contract (both must have capacity –mutuality, supervision)– not personal service, equity)
  • Specific performance
  • Injunctions
  • Rectification
  • Rescission
  • Restitution – not remedy for breach but vitiating factors
  • Put parties in pre-contractual place
  • Voidable
• Relative expertise of the parties


  If one party has more knowledge or expertise in a particular area than the other, their statements may be more likely to be considered a term of the contract
• Importance of the statement


  The more important the statement is to the overall agreement, the more likely it is to be considered a term of the contract
• Time


  The timing of the statement can also be a factor in determining if it is a term or representation. Statements made during negotiations or before the contract is signed may be more likely to be considered terms, while statements made after the contract is signed may be considered representations
• Substantial performance


  Refers to a situation where one party has fulfilled the essential terms of the contract, but there are minor defects or omissions in their performance. It is enough to discharge the party's obligations, as long as the other party has received the benefit of the essential part of the contract (Bolton v Mahadeva and Hoeing v Isaacs).
• Partial performance


  Occurs when one party has only partially fulfilled their obligations under the contract. In this case, the other party may be able to recover payment for the value of the work done, based on the legal doctrine of quantum meruit.
• Severable/divisible contracts


  These are contracts that can be divided into separate parts or obligations. Each part can be treated as a separate contract, and performance of one part does not depend on performance of the other parts (e.g., if you agree to mow my lawn every week for a year, each mowing is a separate obligation).
• Time of performance


  Unless specified in the contract, the time of performance is not usually an issue. As long as the parties perform within a reasonable time, they will have fulfilled their obligations (Charles Rickards v Oppenheim). However, if the contract specifies a particular time for performance, then that time must be met.
• Discharge by performance


  Occurs when both parties have completely fulfilled their obligations under the contract. It is the perfect fulfillment of the terms of the agreement (Cutter v Powell).
• Prevention of performance


  Occurs when one party prevents the other party from performing their obligations under the contract. If this happens, the party who was prevented from performing may be able to sue for damages (Planche v Colburn).
• Members' Voluntary Winding Up

  When a Declaration of Solvency is made and filed with the Registrar, the winding up is then known as a 'Members' Voluntary Winding Up'
• Creditors' Voluntary Winding Up

  If no Declaration of Solvency is made, the liquidation is known as a 'Creditors' Voluntary Winding Up'
• There are concerns about declarations of solvency being made recklessly
• Appointment of a liquidator

  • It is necessary to appoint a liquidator to wind up a company and distribute its assets
  • The meeting of the company and the meeting of the creditors may nominate different persons to be liquidator
  • If no person is nominated by the creditors, then the person chosen by the company will be liquidator
  • If different persons are nominated, any director, member or creditor of the company may within seven days of the nomination appeal to the court against the choice made
• Powers of a liquidator

  • The CI Act governs and prescribes the powers and duties of a liquidator
  • The liquidator is empowered to carry on the business of the company as far as it is necessary for the beneficial winding up of the company
  • The main objective of the liquidator is to wind up all the affairs of the company and pay all the creditors in full according to the class ranking of creditors as provided by the CI Act
  • The liquidator must take control of or custody of, all property of the company
  • The liquidator has broad powers to do 'all that is necessary for winding-up the affairs of the company and distributing its assets to the creditors'
  • The liquidator is expected to perform his functions honestly and investigate and report any fraud, suppression, concealment or reckless/dishonest actions by the company's officers
• If there should be a vacancy in the office of liquidator, the creditors may fill the vacancy except where the appointment was made by the court, then the court will do so