SECTION A (Total 65 marks)

Question 1
Soto Pte Ltd (“Soto”) was the caterer engaged by Land-O Pte Ltd (“Land-O”) to provide
catering services for 6 of Land-O’s monthly management meetings. The first 2 meetings were
scheduled on 5 March and 20 April. Soto provided the main course and contracted to
purchase fruit sorbet desserts from D-light Pte Ltd (“D-light”). The contract with D-light is
for 6 months at a special discounted price per order subject to a minimum order of S$500.00
per month. The contract between Soto and D-light does not have a termination clause.
Soto ordered:

(a) S$500.00 worth of desserts from D-light for the meeting on 5 March; and
(b) $600.00 worth of desserts for the meeting on 20 April.
Soon after the meeting on 5 March, Land-O complained to Soto about the unacceptable quality of the desserts supplied by D-light. The desserts tasted like ice cream, instead of sorbet. Land-O staff also complained that there was no difference between the different fruit flavours indicated on the packaging. Soto gave feedback to D-light but D-light’s manager simply shrugged his shoulders and said that the fruit sorbet desserts were based on their usual recipes and “this is our standard”.

Soto was not satisfied with the response from D-light’s manager and told the D-light’s
manager not to deliver the order scheduled for 20 April. Soto decided to purchase fruit sorbet
desserts from another supplier at higher cost for the meeting on 20 April. Land-O staff were
satisfied with the desserts and in fact, complimented Soto for taking action to change the
supplier.

The second supplier charged Soto S$800 (i.e., S$200 higher than what D-light had charged for the 20 April order). Hence, Soto decided to claim the additional S$200 from D-light.

On 22 April, D-light issued an invoice, stating a sum of S$500 for the 5th March order and another sum of S$600 for the 20th April order.

On 23 April, Soto paid D-light S$300 (being S$500 for the 5 March order minus the S$200 claim).

Soto refused to pay the full invoice of S$1,100. D-light was unhappy with the non-payment of the full sum and informed Soto that it would not supply the fruit sorbet desserts to Soto for the remaining months unless it received the balance payment of S$800.
On 26 April, Soto notifies D-light that it is terminating the contract and will not be placing any further orders of fruit sorbet desserts.






(a) Advise Soto on whether it has any basis for making the S$200 deduction from the 5th
March order. Analyse and evaluate the legal principles and examine reasons for your
advice. You should also briefly describe Soto’s possible remedies for the 5th March
order.
(16 marks)
(b) Advise Soto on whether it is entitled to terminate the entire contract on 26 April and
refuse to place any further orders with D-light, given the alleged breach by D-Light. In your advice, you should also briefly examine whether there are other possible remedies which Soto may have against D-light. Demonstrate well developed written proficiency.
(9 marks)


Question 2
Born-Free Pte Ltd (“Born-Free”) is a construction company that specialises in
environmentally friendly residential projects. It is struggling to survive in a competitive
market. One of its cost-cutting measures was to retrench staff. Benny has been working with
Born-Free for one year. Born-Free’s management decided to terminate the services of Benny.
The following agreement was reached between Born-Free Pte Ltd and Benny during a
meeting:

(a) Benny would vacate his position as a sales and marketing manager at a specified date;
(b) Benny would not enter into competition, directly or indirectly, with Born-Free for a
period of 6 months from the date of termination; and
(c) Benny shall not join any construction company, including construction companies
that specialise in environmentally friendly residential projects, in Singapore or anywhere else during this 6-month period.
After leaving Born-Free, Benny incorporated a company, Live-Again Pte Ltd, which successfully tendered for various contracts in competition with Born-Free. When approached by Born-Free about his actions, Benny denied that statement (b) above constituted a legally binding promise not to compete with Born-Free.

Born-Free has come to you for advice. It wants Benny, through Live-Again Pte Ltd, to immediately stop tendering for contracts that are in competition with Born-Free.

Explain whether the terms of the agreement are enforceable and if yes, to what extent. Apply case law and legislations to identify the remedies available to Born-Free in the event that the courts held that there was a breach by Benny. Demonstrate well developed written proficiency.
(20 marks)


Question 3

John is the owner of First Class Education Pte Ltd (“FCE”). FCE is the exclusive licensee of an education programme “Score Well” and has opened 3 “Score Well” centers in different parts of Singapore.

John’s son, Derrick, is 22 years old. Derrick wanted to learn the business model of FCE, in particular, the marketing strategies and hence, volunteered to work in one of the centers.

John agreed to Derrick’s suggestion to work in the “Score Well” center in Jurong and offered
him the position of an “Executive Manager”. John ordered the printing of name cards for
Derrick.

During the first week of work, Derrick took the public transport to work from their home in Pasir Ris. The trains and buses were often crowded. Derrick felt that it would be more comfortable to ride a motor-cycle to work. However, his parents were against him owning a motor-cycle.

John specifically told Derrick that he was to take public transport and had to work his way
up. He further told Derrick that his role was in sales and marketing of “Score Well”
programme to schools and he was not authorised to sign any agreement on behalf of FCE.

Meanwhile, Derrick visited a showroom, Free-Rider Pte Ltd, with his best friend, Frank, to look at the latest motor-cycle models.

Derrick was interested in one of the motor-cycles and started checking the details. The sales manager, Harvey, attended to Derrick and gave him the brochure with all the necessary information.

Frank told Harvey that Derrick was the “Executive Manager” of “Score Well”. Derrick handed his name card to Harvey. Harvey was pleasantly surprised and replied that his son went to the “Score Well” center in Jurong which was always packed with students.

Derrick mentioned that he was buying a company vehicle to enable him to move around easily during work. Derrick agreed to buy the model recommended by Harvey, paid the deposit of S$2,000.00 and signed the contract on behalf of FCE.
(a) Analyse and discuss whether the contract between FCE and Free-Rider Pte Ltd is
valid and binding. In your analysis, discuss whether Derrick had breached any duties and if yes, give examples of duties that have been breached.
(16 marks)

(b) Advise John on the approaches that a principal could adopt to limit an agent’s
authority. Discuss which is the most pragmatic approach for John and explain it to
John. Demonstrate well developed written proficiency.
(4 marks)