principles of english contract law - trent global · principles of english contract law discharge...

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Principles of English

Contract Law

Anand ANTHONY 安杰褔<[email protected]> [M: 9693 0407]

CHARTERED BUILDING ENGINEER (UK), Adjudicator (Malaysia), Mediator (UK)

EXPERT in FORENSIC PLANNING (Delay/Disruption/Production/Acceleration)

EXPERT in COST ENGINEERING (Quantum of Costs/Loss/Expense/Damages)

EXPERT in PRODUCTIVITY ANALYSIS (Production capacity, Optimum manpower)

Education

• Master of Laws (Commercial & Corporate) LL.M London

• Master of Science (International construction Management) M.Sc. NTU S’pore

• Bachelor of Laws LL.B (Hons) London

• Bachelor of Engineering B.Eng. (Civil) NU S’pore

Working Experience

• 27 years of leadership and management in the construction industry

• 19 years as Construction Contracts Commercial Consultant

• 19 years lecturing in the areas of law, management, business, finance & insurance

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Contract Law

Learning Outcomes

Understanding the principles of contract law and

construction contract law

Assess importance of procurement strategy to

compete in the international market

Review strengths and weaknesses of international

construction companies

Completion of Module Assignment to reinforce

understanding

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Contract Law

Law of Contract

Four Basic

Elements of Contract

Offer Acceptance ConsiderationIntention to create

legal relations

Duress/

Undue InfluenceIncapacity Mistake Misrepresentation Illegality

Terms /

Conditions

Incorporation

Of Terms

Exemption

Clauses

Contents of a Contract

Vitiating Factors

Remedies

DamagesEquitable Remedies

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Contract Law

Contract

Simple Contracts Special Contracts

Oral WrittenWritten(“Deed”)

Four Basic


Offer Acceptance Consideration

Intention

to create

legal relations

5


Contract Law


legal relations

Made to specific

offeree

Made to a group

or the whole world

(unilateral contract)

Offer must be

communicated

Offer terminated

WithdrawalRejection

(counter-offer)

Lapse

of Time

Failure of

ConditionDeath

Four Basic


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Contract Law

Made to specific

offeree

Made to a group

or the whole world

(unilateral contract)

Offer must be

communicated

Offer terminated

WithdrawalRejection

(counter-offer)

Lapse

of Time

Failure of

ConditionDeath

General Rule:

Acceptance

must be

communicated

Offer accepted ExceptionsParties agree

that offeree’s silence

is acceptance

Offeror waives

communication

of acceptance

Acceptance

properly made

under the postal rule

Four Basic



legal relations

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Contract Law

Four Basic


ConsiderationIntention to create

legal relations

Promissory

estoppelExecuted

consideration

Executory

consideration

Past

consideration

Inequitable for the

promisor to go back on

his promise

Promisee relied upon

promise and altered

his position

Clear & unequivocal

promise which affects

the legal relationship

Parties have existing

legal relationshipInvalid

consideration

Pao On’s three requirements:

Exception:

Act done at promisor’s request

Parties understood act is to be remunerated

Contract must otherwise be enforceable

Need not be

adequate but must

be sufficient

Must move from

promisee but

need not move

to promisor

Sufficient Insufficient

Performance of existing contractual duty

Performance of existing public duty

Vague & insubstantial consideration

Moral obligations & motives

Performance of existing contractual duty

to a third party

Forbearance to sue

Goods, services, money, property

Offer Acceptance

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Contract Law

Intention to create

legal relations

Social & Domestic

Agreements

Presumption of

no intention

Commercial

Agreements

Presumption of

intention

Four Basic


ConsiderationOffer Acceptance

9


Contract Law

Puffs

No legal effect

Representations

Not part of contract

Pre-Contractual

Statements

True

No issue

False

Misrepresentation

Exemption Clauses

IncorporationIs e.c

incorporated?

Unusual FactorsAny special facts

limiting the e.c?

UCTADoes e.c

contravene

UCTA?

Express Terms

Implied Terms

Implied by the court

Custom & usage Business efficacy

Terms

Part of Contract

Implied by statute

Condition

Essential term

Warranty

Less important term

Innominate TermUnclassifiable –

Treated like a condition

or warranty, depending

on seriousness of

breach & consequences

Guidelines for distinguishing terms

from representation

VerificationInvitation to verify

suggests a representation

Written FormIf reduced

into writing

more likely a term

TimingCloser to contract,

more likely a term

EmphasisGreater emphasis

suggests a term

Special KnowledgeIf maker has special

knowledge, more

likely a term

Construction

Does e.c cover

the loss/damage

in question?

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Contract Law

Vitiating Factors

Incapacity Illegality Misrepresentation Mistake

Common Mistake

Both parties make

same mistake

Mutual Mistake

Each party makes

different mistake

Unilateral Mistake

One party makes

mistake

Non est factum

“It is not my deed.”

Valid Contracts

Binds both minor &

other party

Ratifiable Contracts

Binds other party &

binds minor only if

minor ratifies

Minors

Mentally unsound

or

intoxicated persons

False statement

of fact

Induced therepresenteeinto contract

Fraudulent

misrepresentationDishonesty

Innocent

misrepresentationError without fault

Illegal Contracts

Gaming &

wagering

contracts

Contracts

contrary to

public policy

Contracts

illegal in

performance

Contracts

in restraint

of trade

Effect of Illegality

Contract illegal

by performance

Contract illegal

generallyVoid

SeveranceSevered part void;

remaining parts valid

Defaulting party

cannot enforce contract

Innocent party can recover

goods or damages

To be valid

Must protect

proprietary or legitimate

interest of covenantee

Must be reasonable in

duration, scope and

subject matter

Must not be

contrary to

public interest

Negligent

misrepresentationLack of care

Voidable Contracts

Binds other party &

binds minor unless

minor repudiates

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Contract Law

Discharge of Contract

Performance Breach Frustration

Exceptions to

Precise

Performance Rule

De minimis

rule

Divisible

contracts

Substantial

Performance

Prevented

performance

Acceptance of

partial

performance

Actual

breach

Anticipatory

breach

Repudiatory Non-Repudiatory

ConditionFundamental

Term

Election

Discharge

contract

Affirm

Contract

Existing

agreement

Mutual release

Unilateral release

Accord & satisfaction

Variation

Waiver

Destruction

of subject-matter

Personal

incapacity

Non-occurrence

of event

Government

interference

Subsequent

agreement

Agreement

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Contract Law

Remedies for Breach of Contract

Common Law Remedies Anton Piller Order Quantum Meruit(Contract & Quasi-contract)

Equitable Remedies

Damages

Remoteness

Mitigation

AssessmentCausation

General Principle:To put the injured party

in the position he would

be in if the contract had

been performed properly

Classification of Loss:expectation loss &

reliance loss

Difficulty in assessment

Liquidated Damages

Clause

Taxation

Interest

Speculative losses

Non-pecuniary losses

InjunctionSpecific

Performance

Interlocutory Perpetual

Mandatory Prohibitory

Penalty

Generally

not enforceable

Genuine

Pre-estimate of Loss

Generally enforceable

Higher than

actual loss:LDC not

enforceable.

Can claim only

actual loss

Lower than

actual loss:Can claim either

actual loss or

as per LDC

Higher than

actual loss:LDC not

enforceable.

Lower than

actual loss:LDC

enforceable.

First limb (normal loss): Such damage as

may fairly or reasonably be considered

arising naturally, ie accoding to the usual

course of things from the breach itself;

Second limb (abnormal loss): Such damage

as may be reasonably be supposed to have

been in the contemplation of both parties

at the time they made the contract

Hadley v Baxendale

Usual course of things:normal business activity

Knowledge includesimputed & actual knowledge

Probability of occurrence:serious possibility, quite likely

Knowledge of nature of damage: need not be exact damage

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