Contract Law

• Date: 01 December 2002
• Author: ANDREW PHANG LLB (NUS), LLM, SJD (Harvard), Advocate & Solicitor (Singapore), Professor of Law, Singapore Management University
• Published date: 01 December 2002

Introduction

9.1 As expected, the number of Singapore cases during the year under review impacting the law of contract is enormous. As I have mentioned in previous reviews, this is due to the fact that the law of contract permeates virtually all areas of the law of obligations — and, on occasion, beyond as well. I will therefore adopt the approach which has been adopted during previous years: which is to focus, in the main, on general principles. There have — as we shall see — been a few cases that are of especial significance. Not surprisingly, given the fact that the foundation of Singapore law is English law, there are one or two significant English decisions as well — which will be referred to, albeit briefly.

9.2 Given the enormous number of cases, I will — as in the past — only consider decisions that have had an impact on the general principles of contract law. Decisions which are somewhat beyond the mainstream of these general principles will not be considered. These lastmentioned decisions pertain, in the main, to more specialised areas of law. These include those relating to:

(a) agency (see eg, Banque Nationale de Paris v Tan Nancy[2002] 1 SLR 29 (focusing on the concepts of both actual as well as apparent authority); Rapiscan Asia Pte Ltd v Global Container Freight Pte Ltd[2002] 2 SLR 325 (also referred to infra, with regard to shipping and infra, paras 9.24, 9.28 and 9.91, with regard to “Implied terms”, “Exception clauses” and “Remedies” respectively); Tapematic SpA v Wirana Pte Ltd[2002] 4 SLR 953 (also referred to infra, at para 9.46 with regard to “Misrepresentation”); and Trigen Industries Ltd v Sinko Technologies Pte Ltd[2003] 1 SLR 183 (also referred to infra, at paras 9.5 and 9.85, with regard to “The objective approach” and “Damages” respectively));

(b) arbitration (see eg, PT Garuda Indonesia v Birgen Air[2002] 1 SLR 393 (also referred to infra, with regard to the conflict of laws); Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd[2002] 2 SLR 164; Mae Engineering Ltd v Dragages Singapore Pte Ltd[2002] 3 SLR 45 (also discussed infra, para 9.42, with regard to “Discharge by performance and breach”); Asia-Pacific Ventures II Ltd v PT Intimutiara Gasindo[2002] 3 SLR 326 (also referred to infra, with

regard to the conflict of laws); WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka[2002] 3 SLR 603 (see also at 637 for a succinct analysis of the general policy underlying the International Arbitration Act (Cap 143A, 1995 Ed)); and Koh Brothers Building and Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd[2002] 4 SLR 748; and on arbitration generally, see supra, Chapter 3);

(c) conflict of laws (see eg, PT Garuda Indonesia v Birgen Air[2002] 1 SLR 393 (also referred to supra, with regard to arbitration); Star City Pty Ltd v Tan Hong Woon[2002] 2 SLR 22 (considered in more detail infra, at paras 9.79 to 9.81, under “Illegality”); Hong Pian Tee v Les Placements Germain Gauthier Inc[2002] 2 SLR 81 (also referred to at paras 9.51 and 9.82, infra, with regard to “Misrepresentation” and “Illegality” respectively); The Neptra Premier[2002] 2 SLR 124 (also referred to infra, with regard to shipping and infra, para 9.76, with regard to “Illegality”); Yugiantoro v Budiono Widodo[2002] 2 SLR 275; Yuninshing v Mondong Edward[2002] 2 SLR 506 (also referred to infra, at paras 9.74 and 9.76, in relation to “Illegality”); Asia-Pacific Ventures II Ltd v PT Intimutiara Gasindo[2002] 3 SLR 326 (also referred to supra, with regard to arbitration); Baridhi Shipping Lines Ltd v Sea Consortium Pte Ltd[2002] 3 SLR 587; Bayerische Landesbank Girozentrale v Kong Kok Keong[2002] 4 SLR 283; Praptono Honggopati Tjitrohupojo v His Royal Highness Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj[2002] 4 SLR 667; and Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd[2002] 4 SLR 877 (also referred to infra, under civil procedure and infra, para 9.82, with regard to “Illegality”); and on conflict of laws generally, see supra, Chapter 8);

(d) insurance (see eg, Hartford Insurance Co (Singapore) Ltd v Chiu Teng Construction Pte Ltd[2002] 1 SLR 278 and Overseas Union Insurance Ltd v Home and Overseas Insurance Co Ltd (No 2)[2002] 4 SLR 104 (also referred to infra, at paras 9.7 and 9.33, in relation to “Offer and acceptance” and “Privity of contract” respectively; see also at [91], where a clear and express term with regard to which party bears the burden of proof with regard to any specific matter must be given effect to and this constitutes an important practical point which has therefore been noted in the briefest of fashions here); and on insurance generally, see infra, Chapter 15);

(e) banking (see eg, Bok Chee Seng Construction Pte Ltd v Development Bank of Singapore Ltd[2002] 2 SLR 61; Beam Technology (Mfg) Pte Ltd v Standard Chartered Bank[2002] 2 SLR 155; PSA Corp Ltd v Korea Exchange Bank[2002] 3 SLR 37 (also referred to infra, with regard to civil procedure; and note the interesting suggestion for

reform at [29] to [31]); PT Adaro Indonesia v Rabobank[2002] 3 SLR 258; and Oversea-Chinese Banking Corp Ltd v Measurex Corp Bhd[2002] 4 SLR 578 (also referred to infra, with regard to civil procedure); and on banking generally, see supra, Chapter 4);

(f) shipping (see eg, The Antares V[2002] 1 SLR 443 (also referred to infra, with regard to civil procedure); The Neptra Premier[2002] 2 SLR 124 (also referred to supra, with regard to conflict of laws and infra, para 9.76, with regard to “Illegality”); The Feng Hang[2002] 2 SLR 205 (also referred to at infra, para 9.85, with regard to “Damages”); Rapiscan Asia Pte Ltd v Global Container Freight Pte Ltd[2002] 2 SLR 325 (also referred to supra, with regard to agency and infra, paras 9.24, 9.28 and 9.91, with regard to “Implied terms”, “Exception clauses” and “Remedies” respectively); Voss Peer v APL Co Pte Ltd[2002] 3 SLR 176; The Patraikos 2[2002] 4 SLR 232 (also referred to at infra, para 9.30, with regard to “Exception clauses”); APL Co Pte Ltd v Voss Peer[2002] 4 SLR 481 (which considered the status of a “straight bill of lading”); and Faith Maritime Co Ltd v Feoso (Singapore) Pte Ltd[2002] 4 SLR 716; and on shipping generally, see supra, Chapter 2);

(g) employment (see eg, Lee Keng Hiong v Ramlan bin Haron[2002] 2 SLR 52 (dealing with liability under the Workmen”s Compensation Act (Cap 354, 1998 Ed) as well as the relevance of the distinction between an employee and an independent contractor); Joseph Clement Louis Arokiasamy v Singapore Airlines Ltd[2002] 4 SLR 794 (which also dealt with administrative law (as to which see supra, Chapter 1), s 14 of the Employment Act (Cap 91, 1996 Ed) and is also considered infra at para 9.93, in relation to “Equitable remedies”); and Chua Ah Beng v Commissioner for Labour[2002] 4 SLR 854 (which considered the important issue of linkage between the common law and the Workmen”s Compensation Act (Cap 354, 1998 Ed)); and

(h) civil procedure (see eg, The Antares V[2002] 1 SLR 443 (also referred to supra, with regard to shipping); Tan Chiang Brother”s Marble (S) Pte Ltd v Permasteelisa Pacific Holdings Ltd[2002] 2 SLR 225; Lam Soon Oil and Soap Manufacturing Sdn Bhd v Whang Tar Choung[2002] 2 SLR 395; PSA Corp Ltd v Korea Exchange Bank[2002] 3 SLR 37 (also referred to supra, with regard to banking); Barang Barang Pte Ltd v Boey Ng San[2002] 3 SLR 158; Drolia Mineral Industries Pte Ltd v Natural Resources Pte Ltd[2002] 3 SLR 163; CSR South East Asia Pte Ltd v Sunrise Insulation Pte Ltd[2002] 3 SLR 281 (and on the issue centring on whether time is of the essence, see infra, para 9.38); Info-communications Development Authority of Singapore v Singapore Telecommunications Ltd

[2002] 3 SLR 289 (on related proceedings in the law relating to offer and acceptance, consideration as well as mistake, see infra, paras 9.5, 9.16 and 9.61—9.66 respectively); Tan Chin Seng v Raffles Town Club Pte Ltd[2002] 3 SLR 345, reversing (in part) the High Court”s decision reported at [2002] 3 SLR 403 (and on related proceedings relating to “Misrepresentation”, see infra, para 9.48); Ooi Ching Ling Shirley v Just Gems Inc[2002] 3 SLR 538; Lau Liat Meng & Co v Lum Kai Keng[2002] 4 SLR 400 (see also, infra, at para 9.19, with regard to “The terms of the contract”); Oversea-Chinese Banking Corp Ltd v Measurex Corp Bhd[2002] 4 SLR 578 (also referred to supra, with regard to banking); and Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd[2002] 4 SLR 877 (also referred to supra, under conflict of laws and infra, para 9.82, with regard to “Illegality”); and on civil procedure generally, see Chapter 6).

9.3 Although the primary focus is on general principles, the context will be sketched in, wherever relevant. It should also be noted that all references to cases are — in the absence of any indication to the contrary — to Singapore cases.

9.4 Before proceeding to examine the various decisions, a couple of recent — and very helpful — texts might be noted: RA Buckley”s Illegality and Public Policy (2002) and John Cartwright”s Misrepresentation (2002).

Formation of contract

The objective approach

9.5 Not surprisingly, for literally a third year in a row, we find judicial endorsement of the objective test in the ascertainment of contractual intention. Although dealing with the issue of construction or interpretation instead of formation, the Singapore High Court decision of United Lifestyle Holdings Pte Ltd v Oakwell Engineering Ltd[2002] 2 SLR 308 endorsed the importance of this general principle which applies equally to both formation and interpretation alike. Lee Seiu Kin JC (as he then was) emphasised, in particular, the crucial importance of the context (including the surrounding circumstances) of the case. Reference may also be made to the (also) Singapore High Court decisions of Trigen Industries Ltd v Sinko Technologies Pte Ltd[2003] 1 SLR 183, especially at [39] (this...