BUS201: You Have been Newly Hired as an Executive in a commercial Printing Business called Printers Express: Contract and Agency Law Assignment, SUSS, Singapore

Question 1
You have been newly hired as an executive in a commercial printing business called Printers Express Pte Ltd (the “Company”). Your supervisor, Mariam, needs your help to source for suppliers to provide ten new commercial printers for the Company which will cost the company millions of dollars, and she wishes to do so via a tender process with a view to obtaining the best value for the Company.

Mariam knows that to conduct a tender process, the company would need to take out advertisements in the newspapers and appropriate industry publications, as “Call formTenders”, to invite interested suppliers to submit a tender. However, Mariam is unsure about the Company’s obligations once the tender documents by interested suppliers have been submitted to and received by the Company. Mariam wishes to select the best supplier and form a contract with them, and reject the rest, but she is concerned that she may need to obtain more information from the selected supplier before she can decide to form a contract with them. Mariam is also wondering whether she can call up a selected supplier who has submitted a tender, discuss the points (in the tender documents) with them verbally, and form a contract verbally with the selected supplier if the talks turn out well.

She is aware that you have taken a course on Contract Law, and she is seeking your advice on the contractual aspects of this process.

Explain how and when the contract will be formed in this scenario between Print Express Pte Ltd and the selected supplier for the commercial printers. In particular, you should explain the legal significance (if any) of the advertisements to be taken out by the Company and the tender documents submitted by the interested suppliers. You should also, make recommendations to Mariam so that her concerns would be addressed. In your answer, you are expected to discuss the elements of offer and acceptance and identify how they would be satisfied in this process, but you are not required to discuss the elements of consideration and intention to create legal relations.

For this question, you may assume that Mariam has the authority to act on behalf of the Company and therefore you do not need to discuss any agency law issue.

Question 2
Jennifer has recently signed a contract with a renovation contractor called Beautiful Homes (“BH”), to renovate her existing apartment for a total sum of $30,000, which is payable on completion. As Jennifer wanted to make sure that BH would carry out the renovation works in a timely manner, she included a clause in the contract that states as follows:

“Clause 23: The renovation works must be completed within two years from the date of this contract. If Beautiful Homes (“BH”) fails to do so, BH shall pay Jennifer a penalty lump sum of $10,000.”

(a) Analyse Clause 23 with reference to the common law guidelines relating to liquidated damages, and conclude whether Clause 23 is likely to be enforceable by Jennifer in the event that BH fails to complete the renovation works on time.

(b) Assume that Jennifer has not yet signed the contract, and has come to you for advice on Clause 23. Give two (2) suggestions to Jennifer on changes that you would propose to Clause 23 to make it more likely to be enforceable, and provide brief reasons for your suggestions. (Your suggestions should be based on contract law principles.)

Question 3
Mobile Mania (“MM”) operates a shop that sells mobile phone accessories. MM entered into a contract with ACME Precision Manufacturing (“APM”) for APM to design a new mobile phone case and to manufacture 10,000 pieces of this new mobile phone case. Under this contract, MM will pay APM a sum of $2,000 for the design of the new mobile phone case (the “design” component of the contract), and another sum of $10,000 for the manufacture of 10,000 pieces of the new mobile phone case (the “manufacture” component of the contract). The deadline for the design component is 1st January while the delivery date for the 10,000 mobile phone cases under the manufacture component is 1st June. It was clearly specified in the contract that the mobile phone case must be exactly 120 millimeters by 60 millimeters. This precision was necessary so that the mobile phone cases would fit well with a recently launched and popular mobile phone model.

APM managed to complete the design of the new mobile phone case by 1st January, and this was approved by MM. In the month of May and ahead of schedule, APM completed the manufacture of the 10,000 mobile phone cases and delivered them to MM. When MM measured the mobile phone cases, MM found out that all of the mobile phone cases deviated from the contract specifications by 2 millimeters in their length. Therefore, they did not fit the intended mobile phone well. It is possible to rectify this defect in the mobile phone cases through a special process that can only be carried out by another workshop, but it will cost MM another $3,000 to do so.

Examine whether the contract between MM and APM has been discharged by performance and conclude whether APM is entitled to any payment for the work it has completed. In your answer, please discuss the precise performance rule and all of the exceptions.

Question 4
Nina owns a number of private residential properties, which she leases out to tenants in order to earn rental income. To assist her on these matters, she issued an appointment letter to James, to appoint James as her exclusive property agent to conduct negotiations with prospective tenants. Nina told James not to sign any contracts on behalf of her, as she will do so personally.

Jessie is a nurse and essential worker who was recently kicked out of her former residence as her previous landlord became prejudiced against her after finding out about her occupation. As a result, Jessie has to look for a new place to rent. Jessie contacted James after seeing an advertisement put up by James for the rental of the properties. Jessie requested for a meeting with James, and James took a cab to a café to meet with Jessie.

After some discussion, during which James explained that he did not own the properties and was only acting as an agent for Nina, Jessie managed to identify a property to her liking. Jessie wanted to sign the lease contract immediately, with the lease to commence at the beginning of the next month. James was sympathetic towards Jessie as she was an essential worker who has contributed much to society, so James immediately signed a lease contract with Jessie for that property, thinking that he could explain the matter to Nina later. A day later, after hearing James’ explanation, Nina was agreeable to ratify the lease contract with Jessie.

(a) Describe and explain two (2) ways in which the agency relationship between Nina and James could have arisen in the above scenario. Support your answer with specific examples based on the above scenario.

(b) Discuss whether James has breached any duty as an agent. You are only required to discuss one (1) duty that James may have breached.