Commercial Law Case Study Questions
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Case Study 1
Alfred who is 16 years old, surfs the web and finds an offer for the sale of Macbook Air lap tops at an incredibly low price of $200 each. He is fully aware that the current retail price was about $2000 and he knows that the low price must have been a mistake.
He decides to purchase five of them since it was quoted at such an unbelievable price He enters the credit card number of the supplementary card given to him by his father. The purchase goes through and the system responds with a confirmation of a sale of five lap tops at the total price of $1000. The shop that offered the sale now refuse to deliver the lap tops to Alfred.
They argue that the online price information was a mere invitation to treat and also that Alfred has no capacity to enter into a contract. They also insist that $200 is not a sufficient price for a laptop that costs $2000.
In addition they insist that their employee had made a genuine mistake and hence even if there was a contract it would be void.
Qus 1.) Discuss whether there was a binding contract between Alfred and the shop, considering all the five essentials of a valid contract.
Qus 2.) Discuss whether the contract above would be valid or void on the basis of mistake.
Case Study 2
Mr. and Mrs. Brandon check in into East Coast Budget Hotel (ECB). They plan to spend their holidays in Singapore and this is their first visit to Singapore. They sign the guest card and make the payment. The guest card has the following exclusion clause printed in small print. “The hotel shall not be liable for any loss or damage to property and any injury to guests”
Mr. Brandon leaves his expensive camera on the bed without keeping it in the hotel safe. While having their morning breakfast at the restaurant they forget to lock the hotel room door. Mrs. Brandon slips on a pool of drink that was accidentally spilt by the restaurant staff. She breaks her hip as a result of the fall and is now suffering in pain. Mr. Brandon is shocked to realize that his camera is missing and probably stolen.
Mr. and Mrs. Brandon intend to sue the East Coast Budget Hotel for their breach of contract and negligence.
The hotel intends to argue that they are not liable for the loss of the camera and the injury to Mrs. Brandon since they signed an exclusion clause which protects the hotel.
Qus ) Discuss whether the exclusion clause would be valid and effective in protecting the Hotel from the claims.
The law of the contract is a very important concept in Singapore. In order to formulate a contract, it is necessary that there must be the presence of all contract essentials. However, a valid contract can be still be rescinded if based on a mistake by the parties. The present answer has undertaken both these features in a contract law.
As per given scenario, there are two important issues that are raised:
- Whether there was a binding contract between Alfred and the shop, considering all the five essentials of a valid contract?
- Whether the contract above would be valid or void on the basis of mistake?
Every contract in Singapore is governed by its contract law. The contact is said to be an agreement which is legally binding and is carried out normally amid two parties to the contract. In order to formulate a valid contract, there are few essential which must be fulfilled that is: (SLA, 2012)
- The meeting of minds of the parties, that is, offer and acceptance –
Offer is the willingness of the offeror which is communicated to the offeree with the intent that the offeree will approve the same and is then binding upon them. The concept of the offer was analysed in Projection Pte Ltd v The Tai Ping Insurance Co Ltd (2001)). An offer can be made to an individual or to the world at large and is held in Carill v Carbolic Smoke Ball Company (1892)). (Lawonline, 2011)
There are various terms that are entered into by the parties whenever a valid contract is formulated amid them. Some are express and some are implied in nature. However, there is yet another term that is made part of the contract that is, an exclusion term. The same is analysed in the present answer.
As per given scenario, the main important issues that are raised are:
- Whether Mr. Brandon can sue the Hotel for the loss of their cameras?
- Whether Mrs. Brandon can sue the hotel for her injury?
- Whether the hotel can protect itself from the liabilities by relying on the exclusion clause?
Application of law
As per given facts, Mr. and Mrs. Brandon check in into East Coast Budget Hotel (ECB) (Singapore). They sign the guest card and make the payment. The guest card consists of an exclusion clause in small print. “The hotel shall not be liable for any loss or damage to property and any injury to guests”. However, Mr. Brandon leaves his expensive camera on the bed without keeping it in the hotel safe and they also forget to lock the hotel room door.
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