LAW0115 CA2 Business Law Case Study (Individual Assignment) Sample SIM Singapore
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TheCA2 LAW0115 Business Law Case Study is an important assessment component for students pursuing business law courses in Singapore. This individual assignment requires students to analyze and apply legal principles and concepts to a real-world business scenario. It aims to assess students’ understanding of various legal aspects related to business operations, contracts, intellectual property, employment law, and other relevant areas.
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Mr. Max Ang engaged Water Plumbing Pte Ltd (“WP”) to supply and install the following items in his master bedroom:
(i) A storage heater,
(ii) A toilet bowl,
(iii) A basin,
(iv) A shower set, a bidet spray and bathroom accessories.
The total fee was $10,000. Payment was to be made “net cash as the work proceeds and the balance on completion.”
Mr. Max Ang made two payments totaling $6,000.
One month later, WP had completed all the works and requested for payment of the balance of $4,000.
Mr. Max Ang complained that WP’s work was deficient as the heating system did not heat adequately and gave out fumes.
WP explained that the cost of rectifying the defect would only cost $1,000. WP was unable to rectify the defect as the company was undergoing restructuring. The company no longer supply and install storage heaters. A new team of workers have been engaged to install solar water heaters and do not have the skill to rectify defects in storage heaters.
Nevertheless, Mr. Max Ang paid WP $1,000 and refused to pay the balance sum of $3,000. Mr. Max Ang was unsatisfied with WP’s explanation and sought a non-obligation consultation from Leaky Plumbing Pte Ltd (“LP”). LP investigated the defect and quoted a total fee of $800 to rectify the defect.
Advise WP on the following:
Assignment Task 1: Explain the 4 ways in which a contract may come to an end.
- Performance: A contract can come to an end through performance when both parties fulfill their obligations as stated in the contract. Once the agreed-upon tasks or services are completed, the contract is considered fulfilled, and both parties are discharged from further obligations.
- Agreement: A contract may be terminated by mutual agreement between the parties. If both parties consent to end the contract before its completion, they can enter into a new agreement to terminate it. The terms of the termination agreement should be clearly defined and agreed upon by both parties.
- Breach: A contract can be terminated due to a breach by one of the parties. If either party fails to fulfill their contractual obligations without a legal excuse, it is considered a breach of contract. The non-breaching party may choose to terminate the contract and seek legal remedies for damages caused by the breach.
- Frustration: Frustration occurs when circumstances arise after the contract is formed that make it impossible or radically different to fulfill the contract’s purpose. If the contract becomes impossible to perform or its performance is radically changed due to an unforeseen event or circumstance, the contract may be terminated on the grounds of frustration. In such cases, both parties are released from their obligations under the contract.
Assignment Task 2: Discuss the LEGAL PRINCIPLES concerning discharge of the contract, APPLY the legal principles, and CONCLUDE on Mr. Max Ang’s obligation to pay the balance sum of $3,000.
In this scenario, Mr. Max Ang engaged Water Plumbing Pte Ltd (WP) to supply and install various plumbing items in his master bedroom. The agreed-upon fee was $10,000, to be paid as work proceeds with the balance on completion. Mr. Max Ang made two payments totaling $6,000 but refused to pay the remaining $3,000, claiming deficiencies in WP’s work.
To determine Mr. Max Ang’s obligation to pay the balance sum, we need to consider the legal principles concerning the discharge of the contract:
- Performance: WP has completed all the works agreed upon, including the supply and installation of the requested plumbing items. However, Mr. Max Ang alleges deficiencies in the heating system. If the deficiency is substantial and affects the overall performance of the storage heater, it could be considered a breach of contract by WP.
- Breach: Mr. Max Ang’s complaint regarding the deficient heating system and the release of fumes suggests a breach of contract by WP. WP has acknowledged the defect and stated that rectifying it would cost $1,000, but they are unable to do so due to their restructuring and change in the type of systems they install.
- Agreement: It appears that both parties have not reached a mutual agreement to terminate the contract. Mr. Max Ang has sought a consultation from Leaky Plumbing Pte Ltd (LP) to rectify the defect, indicating his intention to continue with the contract.
Applying the legal principles, it seems that WP’s breach of contract, as evidenced by the deficient heating system, justifies Mr. Max Ang’s refusal to pay the balance sum of $3,000. WP’s inability to rectify the defect due to their restructuring and the involvement of a different team lacking the necessary skills also contributes to the breach.
Considering LP’s quotation of $800 to rectify the defect, it appears that the cost of rectification is significantly less than the balance sum of $3,000 demanded by WP. This supports Mr. Max Ang’s position that WP’s demand for the remaining payment is excessive.
In conclusion, based on the legal principles of breach of contract and the circumstances of this case, Mr. Max Ang is justified in withholding the balance sum of $3,000 until the defect is rectified or an appropriate adjustment is made to reflect the cost of rectification. However, it is advisable for both parties to engage in negotiations or consider alternative dispute resolution methods to reach a fair resolution.
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