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Tutorial Questions

Chapter 1
1.

Why do you think as a business student you need to have some knowledge of the law?

2.

What are the major sources of law in Singapore?

3.

What are some of the main differences between civil and criminal proceedings?

4.

In the following situations consider the type of proceedings the parties may face:
a.

Alan takes Joes hand phone by picking the lock on Joes locker and sells it to
Lim.

b.

After a night of drinks Sharin drives home and whilst driving knocks down a
cyclist. Sharin panics and drives home.

c.

K Pte Ltd orders a container load of roses in anticipation of demand on


Valentines Day. John ordered a large bouquet of roses for his fianc to be
delivered on Valentines Day. The roses arrived on the morning of the 15th of
February. K Pte Ltd could not make the delivery to Johns fianc, who promptly
called off the engagement. The rose supplier demands payment and John is
furious.

5.

What are the some methods of resolving civil disputes?

6.

Discuss what the parties may do in civil proceedings in the following situations:
a.

Jane lent $10,000 to Mike who promised to repay the $10,000 within three
months. Three months have lapsed and although Jane demanded payment Mike
has not paid. Jane wants to take legal action.

b.

Simon commenced an action in the District Court against his renovation


contractor. The court dismissed the claim. Simon is unhappy with the decision.

c.

Jack commenced an action in the High Court against his former partner. The trial
date is three months away. Simon is in two minds about having to testify in court,
cross examine his former partner who used to be a close friend and bringing into
open court the dealing within the partnership.

d.

JVS Ltd is a large ship-building company. It entered into a contract for the
construction of a super tanker, built and delivered the tanker. The ship-owner now
claims the tanker did not meet the specifications stipulated in the contract. JVS
Ltd disagrees. JVS Ltd feels that if the matter goes to court the court may not
appreciate the technical process involved in building a tanker and would have
little or no understanding of the meaning and effect of the specifications in the
contract.

7.

Name some of the methods of enforcing civil judgements.

Introduction to Business Law in Singapore: Instructors Manual

8.

Ali was recently made a bankrupt. Discuss some of the restrictions he may face as a
bankrupt and how he can get out of the bankruptcy.

Tutorial Questions

Chapter 2
1.

What are the four elements that have to be satisfied so that a contract will become
enforceable?

2.

Are there enforceable contracts in the following situations?


a.

entering the turnstile at the MRT station

b.

making an order at the counter at a fast food restaurant

c.

ordering a bowl of noodles at a hawker centre

d.

opening an account in a bank

e.

signing a proposal form for life insurance

f.

attending an interview for a job

g.

taking a course of study at a university

h.

parking your car at an HDB car park

i.

promising to donate $10,000 to a charity

j.

your parents promising you a trip to Hawaii, if you obtain 4As in your
examinations.

3.

Lions Pte Ltd wants to fit all its trucks with satellite tracking devices. It calls for tenders
and Apce Ltd, a specialist in such devices, submitted the lowest bid when the tender
closed. Subsequently Lions Pte Ltd decided not to proceed with the exercise and
informed Apce Ltd. Apce Ltd is furious as it spent nearly $20,000 on preparing the tender
bid. Apce Ltd wants to take action against Lions Pte Ltd.

4.

Tan & Sons sent a fax to Herox Ltd and PJ Ltd to quote for three copier cum fax
machines. Both companies quoted the same price. Tan & Sons then sent a similar fax
message to each company stating that the other company had offered them a 5%
discount and asked if the company could better their offer by offering a more competitive
discount and asked it to respond within seven days. Meanwhile the media reported that
the Japanese yen is on the rise. Neither company responded. Tan & Sons, fearing that
prices may rise, sent a fax to Herox Ltd agreeing to accept its offer. Herox Ltd refused to
supply. Tan & Sons wants to take action against Herox. Advise Tan & Sons.

5.

Mike and Gill go to Angelos Restaurant. After looking at the menu Gill orders grilled
chicken, which is the cheapest item on the menu. The waiter tells Gill that he will have to
check with the chef. He comes back 15 minutes later and tells Gill that because of the
shortage of chicken in the market the price of the dish has been increased by 50%. Gill
and Mike are unhappy and argue that as the price has been published in the menu the
restaurant must serve the chicken at the price stated in the menu. Advise them.

Introduction to Business Law in Singapore: Instructors Manual

6.

Sam sent a letter dated the 4th of March making an offer to book a room at Hastings
Hotel in Alaska from the 23rd to the 30th of April. The hotel receives the letter on the 8 th
of March and the hotel replied accepting the offer on the 9th of March and the letter is
received in Singapore on the 13th of March. As Sams mother suddenly became seriously
ill, Sam decided to cancel the trip and sent a letter cancelling his booking on the 8th of
March and it reaches the Hotel on the 14th of March. Is Sam obliged to take up the
accommodation? What if the communications were by e-mail and Sam sent his offer on
the 4th, his revocation on the 7th and the hotel sends its acceptance on the 5th and is
received on the same day? Would there by any practical difficulties in enforcing the
claim?

7.

Mike offers to sell James his MP-3 player for $100 and states that he will keep the offer
open for five days. On the third day Gina offers Mike $110 for the MP-3 player and Mike
sells it to Gina and informs James of this. Does James have any right to complain? How
should James have protected himself?

8.

Lim & Sons enters into a contract with Z to buy goods which are lying in Zs warehouse.
The contract price is $2 per kilo. After the contract is signed, and owing to a government
control on imports, there is a shortage of this type of goods in the market. Z wants to use
this opportunity to maximize his profits and doubles the price. Lim & Sons needs the
goods as they are already committed to third-party buyers so they agree to pay the
increased price under protest. Once the goods are delivered, Lim & Sons only pays Z, $2
per kilo. Are they obliged to pay the balance?

9.

Foo employs Zahid as a public relations executive. The contract is silent on bonuses. In
December 2003, he promises Z two months bonus. In January 2004, Foo tells Zahid that
there was an error in the accounts and that the company has suffered loss, and therefore,
no bonus will not be paid. Can Zahid sue Foo for the bonus?

10.

Chong entered into a contract with Tan to renovate his house. Chong wants to take a sixmonth holiday in China and wants to get his son and another sub-contractor who has
been with him for some time to take over the contract. Can Chong transfer the contract to
his son and his sub-contractor? If Tan does not want the contract to be sub-contracted,
how could he have protected himself?

Tutorial Questions

Chapter 3
1. Lim, a Malaysian, wants to work in Singapore and enters into an employment contract with P
Ltd. The working hours are 8 a.m. to 10 p.m. daily except for Sundays and public
holidays. The salary is $1,700 per month with no entitlement to overtime pay. Other
companies in Singapore usually pay $2,700 for a similar position and their employees
generally work only from 8 a.m. to 6 p.m. After working for six months Lim feels that he is
unfairly treated and he wants to challenge his employment terms. Is he entitled to do so?
After a few months, P Ltd completely stops paying Lim his salary as it is facing financial
difficulties. Must Lim continue working for P Ltd?
2. JVK has written a book entitled Students Guide to Economics. Seven out of 12 chapters in
the book are copied from Jansens book called Econs Made Easy. JVKs book is
published by Appleson Publishers. Jansen sues Appleson Publishers for breach of
copyright. Can Appleson Publishers sue JVK for breach of contract? How could Appleson
Publishers have protected its rights better?
3. Tan goes to Pizza Ville, which advertised that it would deliver all orders to the table in 20
minutes. He orders a large pizza and some garlic bread and drinks. Forty-five minutes
have passed and the food has not arrived. Can he walk out of the restaurant without
paying?
4.

a.

X is an employee of Y Company which specialises in house removals and which


has a fleet of vehicles. X, usually a hardworking employee, forgot to attend a
meeting with an important client on a particular occasion. Can Y Company
terminate his services?

b.

X has been using the companys vehicle to transport goods after office hours
without the companys knowledge. Since X offers cheaper rates than Y Company,
he has been diverting business from Y Company to himself and has been making
huge profits. Can Y Company terminate his services?

5. X Company ordered computers from Z Company to be delivered on the 1st of June. Z


Company arrives two days late to deliver the computers. Advise X Company.
6. Jill drives her car to a car park at a shopping centre. She presses for a ticket and a ticket is
issued. The ticket states in English that the management is not responsible for any loss
or theft and injury to customers. As Jill returns from her shopping another customer steps
on Jills foot. Jill who was wearing high-heeled shoes stumbles and falls. She picks
herself up and limps to her car. An overhead pipe becomes dislodged and falls on her just
as she is about to reach her car and she is injured. When she reaches her car she finds
that her car had been broken into and her cash card and stereo have been stolen. Can
she sue the car park management for the injuries suffered and valuables lost? Would

Introduction to Business Law in Singapore: Instructors Manual

your answer be different if there was also a notice at the entrance excluding liability in
similar terms? Would any of your answers be different if Jill is illiterate or cannot read
English?
7. X is a transport company. Y, another big company, engages it to transport goods to Thailand.
There is a clause in the contract, which limits liability for damaged or lost goods to $13 a
kilo. Y was given an option of agreeing to a larger limit of liability by paying an additional
sum of money. Y did not take up this option. The goods are transported and some of the
goods are damaged in the process of transportation. Is the limitation clause valid?

Tutorial Questions

Chapter 4
1. Jamie recently won some money on Toto and wants to invest it to get maximum returns. His
friend told him that the easiest way was to lend money to persons who cannot get credit
from financial institutions or licensed money lenders as they are prepared to pay
substantially higher interest rates and he could easily double his money in no time. Jamie
decides to try his hand at it although he does not have a money-lending licence. He lends
Ah Heng $20,000. Ah Heng does not pay up when the loan becomes due. Can Jamie sue
Ah Heng? What if instead of lending money Jamie sold Ah Heng pirated CDs on credit
terms and Ah Heng now refuses to pay?
2. Donna has a pet food shop in Holland Village selling pet food. She is tired of the hot weather
in Singapore and decides to migrate to New Zealand. Therefore she sells her business
together with all the stock for $500,000 to Zenna. There is a clause in the contract of sale
which states that Donna will not for a period of ten years after the sale, set up any other
business dealing with pets or pet foods or pet grooming in the Holland Village or Bukit
Timah vicinity. After six months Donna is bored of New Zealand and decides to come
back to Singapore and set up a pet shop in Holland Village. Advise her whether she can
do so.
3. Jing joins Coral Company as a marketing executive after graduating from a local polytechnic.
His employment contract provides that Jing is not to work for a similar business anywhere
for two years after he leaves Coral Company. Jing resigns after giving notice and joins
Zaltex Company as an accounts executive. Coral Company is refusing to pay Jings last
months salary because it says Jing breached the terms of the employment contract.
Advise Jing.
4. Advise the parties in the following situations:
a.

Billy is a 20-year-old polytechnic student. He bought a hand phone which was


advertised to be the latest model with all kinds of new features. He thinks it is a
great buy and shows it off to all his friends in the polytechnic. Two weeks later the
manufacturer unveils an improved model. Billy is furious and wants to get out of
the contract on the ground of his infancy. Can he do so?

b.

If Billy had obtained 30-day credit terms from the shopkeeper and had not paid
for the phone and now refuses to pay can the shopkeeper sue him?

c.

At about he same time Billy ordered a suit (his first) to be made for his sisters
wedding. His sister decides to cancel the wedding and Billy has no use for the
suit and decides to cancel the order. The tailor is furious and wants to sue him.
Can he do so?

Introduction to Business Law in Singapore: Instructors Manual

d.

Billy works part-time as a waiter in Angelos Restaurant. The restaurant has yet to
pay Billy his wages for the last two months. Can Billy sue the restaurant?

5. Dr Lee, a dental surgeon, wants to sell his dental practice to Dr Ng who recently returned to
Singapore after spending six years in Australia. Dr Lee tells Dr Ng that HDB will be
extending the satellite town to include several new neighbourhoods in close proximity to
the clinic and that with new people moving in, the business would bound to double or
even triple. Dr Lee asks Dr Ng to check with HDB to verify this. Dr Ng decides to buy the
business, partly because he is sentimental about the area as he had lived there as a child
and partly because of Dr Lees representations about the new developments in the area.
About nine months later Dr Ng met a former classmate who is working in HDB and the
classmate tells him that HDB has no plans to carry out any developments in the area in
the near future. Dr Ng is furious and wants to rescind the contract and get back his
money. Can he do so? If he waits for two years after he finds out the truth and then
decides to take action, is he likely to be able to rescind the contract?
6. Consider if there are undue influences or mistakes in the following situations:
a.

Simon is sued by a creditor. He engages Lim, a lawyer, who successfully defends


him and the case against Simon is dismissed. Lim attends a party at Simons
house to celebrate the success. Lims wife loves Simons house and the
neighbourhood in general. Lim asks Simon if he wants to sell the house to him.
Simon agrees to sell the house at $1 million which Simon says is a fair price. Two
weeks later Simon meets his neighbour who tells him that he has just sold his
house for $1.25 million. Simon is unhappy and wants to get out of the contract.

b.

Abigail is an old illiterate lady. She relies completely on her favourite niece Angel
for everything. Angel asks Abigail to sign a document which she states is a
survey form on the needs of the elderly which Angel had filled up for her. Abigail
puts her right thumb print on the document. In fact the document is an application
for a loan by Angel from a bank and a guarantee given by Abigail for the loan as
security for the loan. The form authorises the bank to lodge a caveat on Abigails
house.

7. Tay orders goods from Ching & Co. Ching & Co. delivers the goods to Tays warehouse and
asks Ah Meng, Tays warehouse clerk, to sign the delivery order. The delivery order
acknowledges that 30 items have been delivered. In fact, only 28 items had been
delivered. However, Ah Meng without checking this signs the delivery order. Can Ah
Meng or Tay claim that Ah Meng signed the delivery order by mistake without reading and
sue Ching & Co for the shortfall?

Tutorial Questions

8. Henry & Co gets Chye to transport its goods to a factory in Jurong. Chye quotes $4 per kilo
but once loading commences Chye slows down and refuses to continue loading unless
Henry & Co pays $7 per kilo which Chye says is the market rate. It is the New Year
season and Henry & Co needs to deliver the goods urgently to its customer. Henry & Co
is already late and its customer has threatened to sue unless the goods are delivered
within the day. It would also be difficult to get other transporters at such short notice. So
although Henry & Co protests vehemently, it agrees to the new price by signing a deed.
Must Henry & Co pay the new price after the delivery is made?

Introduction to Business Law in Singapore: Instructors Manual

Chapter 5
1.

Harjeet gets TT Trans Ltd to transport some X-ray machines from Singapore to
Shanghai via Hong Kong. The machines are part of a larger consignment and are to be
repacked and transshipped in Hong Kong. Jane, an employee of TT Trans Ltd,
mistakenly inserts the place of delivery as Shenzen. The goods have arrived in Shenzen
and have been seized as these are controlled goods and no customs clearance has been
applied for. TT Trans Ltd wants payment before they will arrange for the goods to be
collected and sent to Shanghai. Is TT Trans Ltd entitled to any payment? What if the
goods were delivered to an incorrect address in Shanghai instead?

2.

Jack orders wedding cards to be printed. After the initial layout work had begun, Jack
cancels the order as he has found a cheaper printer. Is the printer entitled to payment
since he has not completely performed his obligations under the contract?

3.

A enters into a contract with B, under which the latter is to supply 100 tons of rice. After
the contract is concluded, A and B agree to cancel the contract. Can B later change his
mind and demand that A accepts the rice?

4.

James agrees to supply Nick with poultry. James own supplier fails to deliver and
James is unable to fulfil his contract with Nick. Is James liable for breach of contract or
can he successfully plead frustration? If James finally gets the poultry from an alternative
supplier and is willing to supply Nick on the due date but Nick does not want the poultry
as there has been a bird flu scare, can James get out of his contract with the alternative
supplier on the grounds that his buyer does not want the poultry any longer and James
himself does not want the goods?

5.

Charlie agreed to supply Andrew with plastic chairs. After the contract was entered into,
the market price of cost of raw materials rose by about 20% and further, some of
Charlies key workers have resigned. It is unlikely that Charlie can meet the deadline
stated in the contract and he would suffer a loss as a result of increase in the cost of raw
materials. Can Charlie be excused from performing his obligations under the contract?

6.

Ting is in the car rental business and has a fleet of cars. He agrees to rent a limousine
to Ritchie on the 1st of June for Ritchies wedding. On the 28th of May, the vehicle Ting
was supposed to let out to Ritchie, meets with an accident and is destroyed. Ting has
other vehicles, but he has committed them to other contracts and thus is unable to
provide Ritchie with a car. Is Ting liable for breach of contract?

7.

W, an Indonesian, agreed to sell goods to Z, a Singaporean. The goods were to be


shipped from Port J only. However, a labour dispute has broken out and there are strikes
in Port J making it impossible to ship the goods from there. Will W be in breach of
contract if he does not ship the goods as a result of this? What if there was a force

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Tutorial Questions

majeure clause in the contract stating that time for performance will be extended if there
are custom delays, strikes, riots or civil disturbances in Port J?
8.

Lim, a retired accounts clerk, is engaged by Tan Pte Ltd to draw up the company
accounts. Tan Pte Ltd paid Lim a deposit. Shortly after Lim started drawing up the
accounts but before completion, Lim dies. Advise Lims estate if they have to complete
the contract.

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 6
1. Jenn, a model, joins a tour organized by Goose Tours and is injured in an accident which is
caused by the negligence of Goose Tours driver. Jenn is hospitalised for one week and
as a result is unable to take on a modelling assignment. Advise Jenn as to what she can
claim for.
2. On the 1st of January, Hui enters into a contract with Jin to sell Jin his motorcycle. Hui needs
the money urgently as he intends to invest the proceeds of sale in a particular share
counter on which his stockbroker friend has given him a tip. However, on the 3rd of
January Jin tells Hui that he cant buy the motorcycle as he cannot secure the financing.
Hui who has been dreaming about the shares, gets a heart attack when he hears this.
Assuming the market price of the motorcycle has not changed, advise Hui as to his
remedies.
3. A building contract provides that for every day of delay in completion of the building,
liquidated damages of $100 per day is to be paid. The completion is delayed by 20 days
due to the fault of the contractor. How much can the building owner claim if the actual
loss suffered is $10,000?
4. John agreed to sell a machine to Zinnia at $2,000. John did not supply the machine to Zinnia
as required under the contract. As a result, Zinnia could not operate her business and is
greatly distressed as this is her first venture. It is established that Zinnia could have got a
similar machine at approximately the same price from another supplier within a few days
of the breach. What damages would Zinnia be able to claim?
5. On the 1st of May Z, a car dealer, enters into a contract with X, under which X agrees to buy
a car for $130,000. On the 2nd of May, X cancels the order as he cannot get financing.
The market price of the car has remained the same. What are Zs remedies? What if Z
collected a deposit of $500 and the contract provided that all deposits are non-refundable
and will be forfeited if the buyer cancels the order? If Z is in breach of contract and does
not want to sell the car to X, what happens to the deposit?
6. Allen contracts to sell his house to Ben, but later changes his mind as he has been living
there for a long time and cannot bear to part with it. The price of similar houses has gone
up by at least 10%. What are Bens remedies? How quickly must an action be brought?
7. X enters into a lease with Z, the landlord. It is provided in the contract that X will not sub-let
the property. X sub-lets the property. Can Z get an injunction?
8. Jim has been unlawfully dismissed by Yen who is his employer. Yen is willing to pay damages
for the breach. Jim wants Yen to re-employ him. Can Jim so insist? What if Jim has
unlawfully resigned in breach of the contract and Jim is now willing to pay damages but
Yen wants Jim to come back and work for him?

12

Tutorial Questions

9. In 1987 Jenny sells William a painting which Jenny fraudulently claims is an original Picasso.
William buys it, and then in 2005, he tries to sell it at an art auction. The buyer, an art
expert and collector, tells him that the painting is not an original Picasso but a bad copy.
Can William make any claims against Jenny?
10. Michael Xson, an internationally famous pop star, has been engaged by Y Productions for a
concert in Singapore. Thus far, Y Productions has spent $50,000 in promotions and all
the tickets have been sold out. Michael Xson is badly affected by a sex scandal that has
broken out in his home country and cancels the concert. If the concert had gone on, Y
Productions would have made $200,000 in net profits. Advise Y Productions as to the
damages they can recover from Michael Xson.

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 7
1. Jims car is stolen by Ben and sold to Yan. Yan then sells the car to Ming. Jim informs the
police and traces the car to Ming, who is forced to return it to Jim. What can Ming sue
Yan for?
2. X holds a garage sale in her house and sells to B a handbag which she says is made of
genuine leather. This is an untrue statement. X also sells B an electric rice cooker which
looks used for $35. When B goes home, he finds that the rice cooker has some problems
but can still be used. B also discovers from a friend who is a leather goods dealer that the
handbag is not made of leather. Advise B as to his remedies.
3. Xina runs a designer boutique at an exclusive shopping centre. Tai Tsai buys a designer outfit
for just $2,000. When she goes back she sees that there is a very slight tear on the collar.
Advise her of her rights. What if the contract stated that goods once sold cannot be
returned? What if she goes to the boutique a month later to return the outfit? What if the
reason for wanting to return the outfit was that she did not like the colour or size? Tai Tsai
also bought a blouse at a discounted price of $350 from Y shop. On the blouse there is a
tag stating that the blouse must be dry cleaned and not machine washed. Not reading
this, her maid happily puts the blouse into the washing machine and the blouse is
damaged. Advise Tai Tsai. What if there was no such tag and it was not obvious that the
blouse could not be machine washed?
4. Jane wants to buy a stain remover to remove some stains on her wall. She goes to Robins
Departmental Store looking for such a product. Not being able to find any, she seeks the
help of a young salesgirl who is dusting the shelves and asks her if there is any stain
remover which can remove stains from walls. After thinking for a minute, the salesgirl
takes Jane to the counter where stain removers are shelved and just walks away. There
is only one brand of stain remover there and Jane buys a can for $5 without reading the
instructions and applies it to her walls. Not only do the old stains not go, new patches
appear. Jane is very upset and brings back the empty can to the shop, where the
manager points to the label on the can which states suitable for use on all wooden
surfaces. Advise Jane.
5. X orders 500 pens from Z Company priced at $8 each. The pens are to be given as door gifts
during his sons wedding. When the pens arrive, three of them do not work. Can X reject
the whole lot? What if X was a company buying to re-sell the pens?
6. Tim goes to a shop and buys a calculator which turns out to be defective. Tim goes back to
the shop the very next day and wants his money back. The shop states that he can
exchange it for another calculator or buy something else for that amount of money but
cannot have his money back. Advise Tim who wants nothing else but his money back.

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Tutorial Questions

What if the contract provides that goods sold could be refunded if the goods were
returned within three days of purchase and Tim comes after the 5th day? What if the
contract provides that goods sold could be refunded if the goods were returned within
three days of purchase, but the calculator was not defective and Tim comes after three
days?
7. Tan orders 300 bottles of a drink for his drink stall from Lim. The bottles are sent on a truck to
Tans shop two days later. On the way to the shop, the truck collides with another truck
due to the negligence of Lims driver, and the bottles are damaged despite the packaging.
Must Tan pay for the 300 bottles?
8. X sells B, a sole proprietor, jewels on credit terms. It is stated in the contract that property in
the jewels will pass to B only when B has paid for the goods, but the risk will remain with
B from the time of delivery. What happens if Bs shop is robbed and the jewels are stolen
or bankruptcy proceedings are commenced against B?
9. X, a retailer, orders 100 bags of rice from Y. The contract provides that Y is to deliver the rice.
Y delivers 120 bags of rice. What are Xs rights? What if Y delivered 101 bags of rice?
What if X accepts 100 bags, but does not pay for it what are Ys rights assuming X has
become insolvent and the contract is silent on the passing of property and intention of the
parties in this regard cannot be gathered from the circumstances?
10. X bought a brand new Tonica camera from Z shop and when he brings it home, it does not
work properly. Advise him as to his rights against Z shop and Tonica who are the
manufacturers.
11. X who is in Japan ships a cargo of computer parts to Z in Singapore. The contract states that
risk passes to Z upon shipment. The goods are completely damaged due to a storm at
sea. Advise Z. How could he have protected himself?
12.

Y sells goods to M, a sole proprietor, on credit terms and the contract provides that
property would pass to M only when M pays the purchase price. The contract also
provides that if M sells the goods, M must hold the sale proceeds on trust for Y. M then
sells the goods to Z. However, before paying Y, M becomes bankrupt. Does Z get good
title to the goods? What if the goods were stolen from M's shop by P and sold to Z
instead?

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 8
1.

Discuss if Mark is an employee in the following situations:


a.

Mark is asked to attend at a construction site from 9 a.m. each day till the
construction is completed for the day and take over the carpentry work for the
building being constructed. He is to be paid a salary of $100 per day and is
allowed to hire others to help him but he must pay the workers from his salary.

b.

Mark is given an assignment to write a book by X Pte Ltd. He is to be paid $40


per day and the work is to be completed within 40 days. The company agrees to
make CPF contributions.

c.

Mark works in a night club as an escort. The night club pays him 50% of the tips
he receives for services rendered to the customers at the nightclub. He has to
take instructions from the supervisor at the night club.

2.

James is employed by ARC Ltd. His job title is administrative officer. He was told at the
job interview that he would have to ensure the smooth running of the office. Jenny, the
receptionist, is suddenly taken ill and given medical leave for seven days. The general
manager instructs James to assume the duties of the receptionist. James is angry and
says that the job is beneath the scope of duties of an administrative officer and refuses
to carry out those duties. Advise ARC Ltd.

3.

Tim works for Dingo Bank Ltd. His job is to verify all signatures for cheques and ensure
that the signatures conform to the specimen signature provided by the customers. It is
New Years Eve and the bank receives a large quantity of cheques and Tim is tired and
wants to leave for the office party. He passes a few cheques without checking. It turns out
that one of the cheques was forged and the bank was sued by the account holder. Advise
the Bank.

4.

Meng has worked as a delivery clerk for TSN & Sons for the past 20 years. The employer
has not revised Mengs salary for the past 15 years, but gives him an ang pow of $50
every Chinese New Year. Meng finds it difficult to make ends meet. He takes on the
duties of a junior delivery clerk with a neighbour of TSN & Sons. He is able to deliver for
both organisations within his normal working hours. TSN & Sons is annoyed when they
discover what Meng is doing and seeks your advice.

5.

Lim works for Albright Intellectual Services Pte Ltd as accounts executive. The company
provides head hunting services. His contract states that he cannot work for a competitor
or set up a competing business in Singapore for a period of five years if he leaves his
employment. Lim resigns and sets up a business. Before leaving he made copies of
Albrights client list and their computations of market salaries for certain categories of

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Tutorial Questions

workers. When his former employers find out that he is setting up a business they
threaten to enforce the restraint clause. Lim seeks your advice.
6.

In the following situations consider the duties of the employer:


a.

Jinny worked as a housekeeper in Mr Wongs house for the last 12 years and
recently retired. She recently found out that Mr Wong never paid CPF
contributions for her.

b.

Mike works the night shift at a factory. He usually works on weekdays and gets
Saturday and Sunday off. The factory has an unusually large order to fulfil and
the supervisor asks him to work on Saturday and take Sunday and Monday off.
Mike is angry as Saturday is the day he plays football and then goes for drinks.

c.

Mark has worked with the same company for seven years. His contract makes no
mention of annual leave. He wants 21 days but the company says he is only
entitled to 14 days.

d.

Martia joined TYR Ltd as secretary six months ago. She now discovers that she
is pregnant. She wants maternity leave but her employer is reluctant to let her go
as they need her services.

e.

Kay is 60 years old and is the oldest person in the company. Her boss is half her
age and thinks older works are inefficient and urges her to resign as otherwise
the consequences will be bad for her. Kay is distressed.

7.

The hobby of Anthony, a dentist, is to make jewellery. Some of his patients have similar
interests and he decides to get four of them to spend their evenings in a back room
making jewellery. He pays them $10 per hour and they have a lot of fun together. Anthony
usually sells the jewellery made to a hobby shop at Suntec City. One of the patients is
slightly injured whilst welding some jewellery. The patients son complains to the
authorities that Anthony did not provide a safe place for work. Advise Anthony.

8.

Mani is a foreign worker working at a construction site. He starts work at 7 a.m. and has
an hours lunch break between 12.30 and 1.30 p.m. He has a quick lunch and joins his
friends for a game of cards in one of the sheds at the site. A concrete slab strut falls off
the building and onto the shed, injuring Mani. Mani loses two fingers as a result of this
accident. Can he get any compensation for his injuries?

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 9
1.

Lim orders goods on behalf of Zero Pte Ltd. Advise the company whether it is bound to
honour the contracts entered into by Lim if

2.

a.

Lim is the managing director of the company;

b.

Lim is a non-executive director of the company; and

c.

Lim is an accounts executive in the company.

Joan runs a small hotel which is named Joans Hotel. YY Ltd purchased Joans business
but retained the name of the hotel. YY Ltd also retains Joan as its manager. However, YY
Ltd strongly believes that tobacco is detrimental to health and prohibits the hotel and
Joan from selling cigarettes in the hotel. Joan who used to sell cigarettes when she was
the owner of the hotel continues to buy cigarettes on credit terms and sell them without
the knowledge of YY Ltd. Can the supplier of the cigarettes sue YY Ltd for the price of the
cigarettes purchased by Joan as manager of the hotel?

3.

Raja books an air ticket on Singapore Airlines through Amanda Travel Agency. Does Raja
have a direct contract with Singapore Airlines? Does Raja have a contract with Amanda
Travel Agency?

4.

Jimmy asks his stockbroker to buy four lots of DBS Bank shares. The broker, who has a
very busy trading day, forgot to execute the order before the close of the trading day. That
evening DBS Bank announced a major deal and the price of the shares went up by at
least 5% when trading opened the next day. Advise Jimmy.

5.

Mark engages Simon, a lawyer, to represent him in a suit. Simon is heavily committed to
several other cases and gets James, another lawyer from another firm, to represent Mark
at a hearing in court without seeking Marks permission. James does a good job and wins
the case. However, Mark is unhappy that he was not consulted before James was
appointed and seeks your advice if he should pay the bill presented by Simon.

6.

Lim has recently entered into a partnership with Ching. Lim buys some stationery and a
printer for use by the firm at a warehouse sale of his former employer where he was able
to get a further discount on the price which is not available to other customers as he was
a former staff member. Lim charges the firm the same amount ordinary customers would
have paid for the goods at the warehouse sale. Advise Ching who subsequently
discovered the true price Lim had paid.

7.

Kien appoints an auctioneer to put up for auction an original painting by a renowned


painter. The contract provides that the auctioneer will receive 2% of the gross sale
proceeds as commission. The auctioneer then goes about advertising the painting and
the auction, and incurs considerable expense. Jane, who is secretly interested in the
painting and not knowing that Kien has appointed the auctioneer, approaches Kien to sell

18

Tutorial Questions

the painting to her. Kien, who is interested in getting to know Jane better, thinks this
would be a good opportunity to get closer to Jane and agrees to sell the painting to Jane
at a price 10% below the reserve price at the auction and promptly calls off the auction.
Advise the auctioneer.
8.

Mrs Tan appoints Alex an estate agent to sell her semi-detached house. Alex has not
made any sale for the last six months as the property market has been depressed and he
is very keen to make a sale this time. He, without the knowledge of Mrs Tan, tells a
potential buyer that the property is 3,000 sq feet and that it faces east when in effect it is
only 2,500 sq feet and faces north-west. The buyer, after inspecting the property, enters
into the contract to purchase. The buyer discovers that the property is only 2,500 sq feet
when his lawyers carries out a search on the property. He is annoyed. The price of the
property has meanwhile dropped by 10%. Advise the buyer.

9.

James lives in Germany. He owns a unit at Bayshore Park Condominium in Singapore.


He leaves it to Yuppie Property Consultants to manage the property which is tenanted
out. The property is in need of some minor repairs and Yuppie Property Consultants gets
contractors to repair it for $550. Yuppie Property Consultants receives a commission of
2% of the invoice amount from the contractors for this job. In the accounts rendered to
James the cost of the repairs is stated as $550. Advise James.

10.

Gill is the personal secretary of the managing director of XYZ Pte Ltd. Gill has been
ordering the stationery on 60-day credit on behalf of the company for the past seven
years and the company has always paid the bill. Sometimes Gill slips into the orders
some small items of stationery which her school-going sons need. The managing director
resigns and a new one is appointed. Gill cannot get along with the new managing director
who is female. Gill resigns but just before she leaves she places an unusually large order
of stationery and also places an order for fruits with Ah Leng, the brother of the stationer,
whom she got to know when visiting the stationery shop. The fruits are for her personal
consumption and she instructs Ah Leng to send the fruits to her home. The stationer and
Ah Leng send their bills to XYZ Pte LTD after the expiry of the 60 days. Advise the
stationer and Ah Leng of their rights against Gill and XYZ Pte Ltd.

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 10
1.

Thomas, a Singapore resident, is the sole proprietor of a provision shop. The shop is
rented. He owns a car which is used for both business and private purposes. He also
owns a Rolex watch and lives in an HDB flat, which is being paid through a mortgage
loan granted by HDB. He has $2,000 in his personal savings account with POSB and
$50,000 in his CPF account. Of late his business has not been doing well and he has run
into huge debts. The total debts amount to $200,000. Advise the creditors. Would your
answer be different if Thomas was in partnership with Samuel in relation to the provision
shop? Would your answer be different Thomas was running a private limited company
with Samuel as a fellow shareholder and director? If despite all their efforts, the creditors
have not been fully repaid, is there anything else they can do?

2.

Tan and Sim are in partnership running an audit firm. Sim carelessly audits accounts of
PPS Pte. Ltd. Sim also orders goods from Z Company which Tan does not think is
necessary for the business of the audit firm and so Tan does not want to pay for them.
Sim also uses some of the partnerships equipment and stationery for his own company
secretarial services company which is not disclosed to Tan. Sims company secretarial
services company makes a profit of $50,000 that year. Advise Tan.

3.

Thomas takes some goods in his shop for his personal use. What would be the
consequences if:

4.

a.

he was a sole proprietor;

b.

the shop was operated by partnership between him and Xeno; or

c.

the shop was operated by an incorporated company?

The directors of Telco Pte Ltd have misappropriated funds belonging to the company.
What can the shareholders do?

5.

The members (shareholders) and only directors of Salem Pte Ltd are Pang and Teo. Both
of them have substantial personal assets. The company has incurred a debt of $100,000
and is unable to pay the same. Advise the creditors. What if Pang and Teo when they set
up the company knew that as shareholders they have no personal liability and thus
ordered goods and services with no intention of paying for them?

6.

Pierre and Terry intend to set up an art and craft shop. They anticipate running a small
business with a small capital and they think the risk involved or the turnover will not be
large. Should they set up a partnership or a company? What if after several years of
operation, the business prospers and there are huge opportunities for expansion?

7.

Visit ACRAs website at www.acra.gov.sg and consider the following:


a.

if you wish to give private tuition, must you register it as a business?

b.

if you wish to set up a fish farm, must you register it as a business?

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Tutorial Questions

c.

If you wish to set up a private school, do you need approvals from other
agencies?

d.

If you are not a citizen or permanent resident can you register a business in
Singapore?

e.

If you wish to set up a society or fan club, must you register that society or club
with ACRA? [Also visit the website of the Ministry of Home Affairs and look for the
Registry of Societies.]

f.

If you want to set up a hotel, in addition to registration under RCB, do you need
any licences?

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Introduction to Business Law in Singapore: Instructors Manual

Chapter 11
1. Travis Pte Ltd has adopted Table A of the Fourth Schedule of the Companies Act. The
directors appoint Tan as their personnel manager. Tan has a conflict with the majority
shareholders, and at a requisitioned meeting of the members, they pass a resolution
directing the directors to dismiss Tan. The directors refuse to obey. The shareholders are
also unhappy that one of the directors mistresses has been appointed production
manager of the companys factory. She was the directors personal secretary and has no
previous management experience. The directors also decide to increase their
remuneration at a meeting of directors as they feel they are underpaid. Advise the
shareholders.
2. Aaron, Benny and Charlie are directors of ABC Pte Ltd. Since 1998, all three directors have
failed to submit to the Registry of Companies, annual returns of the company. They have
yet to be prosecuted for the offences. A month ago, Aaron was declared a bankrupt by a
Malaysian court. Aaron is still acting as a director of ABC Pte Ltd. Benny was a director of
XYZ Ltd which was wound up a few months ago on grounds of inability to pay its debts
following a slump in the tourist industry. Benny is now invited to sit on the board of
directors of a public company. Charlie is also a director of OMP Pte Ltd and has been
convicted of an offence under section 157(1) in relation to that company. Advise them as
to whether they can continue acting as directors. Assuming Benny and Charlie are
disqualified from acting as directors of companies advise if they can continue to be
partners of a firm.
3.

Ong, Pang and Chew are directors of Techno Ltd, a public company. Techno Ltd enters
into a contract for the purchase of 1,000 tons of steel bars from Y Ltd. Ong is a majority
shareholder in Y Ltd. Techno Ltd also gives a guarantee to a personal loan advanced by
ABS Bank to Pang. At a board of directors meeting, it is revealed that the company is
under investigation by the Commercial Affairs Department. This information is confidential
and is likely to affect the price of the shares. Chew, on hearing this, quickly sells off half
his shareholding in Techno Ltd. Feeling uneasy Ong, Pang and Chew seek your advice.

4. Section 155 provides that a person, who is persistently in default in filing documents, would
be disqualified from acting as a director. Besides the annual returns, what are some of
the other documents/forms/notices that the company has to file with ACRA? (See
www.acra.gov.sg forms and guides.)

22

Tutorial Questions

Chapter 12
1.

State if the following statements are true or false:


a.

the members of a company may by special resolution resolve to wind up the


company.

b.

the company is unable to pay its debts so the members may by special resolution
resolve to wind up the company.

c.

the Director of ACRA may present a petition to court to wind up a company.

d.

that the company has not commenced business within a year of incorporation
and that it has suspended its business for a whole year are grounds to wind up
the company.

e.

where directors have misappropriated the companys funds the shareholders


may seek to wind up the company.

f.

where the minority shareholders have been unfairly treated the court may wind
up the company.

g,

where a petition has been presented for winding up on the ground that the
company is unable to pay its debts the company must demonstrate to the court
that it has the means to settle all debts.

h.

If there is a serious deadlock between the shareholders and directors the court
may wind up the company on the ground that it is just and equitable to do so.

i.

a winding-up order generally commences, not on the date on which it is made,


but on the date on which the petition is presented.

2.

XYZ Pte Ltd has run into debts with several creditors. ABC & Sons has obtained
judgement and has issued writ of seizure and sale against the assets of XYZ Pte Ltd.
XYZ Pte Ltd presents a petition on the ground that the company is unable to pay its
debts. On the presentation of the petition the bailiff tells ABC & Sons that he is unable to
proceed with the writ of seizure and sale. Advise ABC & Sons.

3.

ADS Pte Ltd is in financial difficulties and owes considerable sums to several
creditors. One of its creditors is pressing very hard for immediate payment. To appease
the creditor the managing director offers the creditor some of the goods of the company
presently lying in the warehouse. The creditor takes possession of the goods and sells
them to setoff the amount owing. About a year ago the company bought an office unit
from one of its directors at about 20% above the mortgagee banks valuation. The court
has now made a winding order against the company and a liquidator has been appointed.
Advise the liquidator.

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Introduction to Business Law in Singapore: Instructors Manual

4.

RYT Pte Ltd commenced timber processing business in April 2005. In May 2005 the
company created a floating charge to secure a loan from TGR Bank to finance its daily
operation. Owing to cheap timber from China, TGR is unable to sell its products and
makes substantial losses and is unable to keep up the interest payments to the bank. In
July 2005 TGR Bank issues a notice of default and appoints a receiver under the floating
charge. The supplier of machinery to the company upon hearing that a receiver has been
appointed quickly issues a winding petition for its overdue debt. Advise the receiver.

5.

Following a winding up, the following parties have lodged proof of debts:
a.

CPF Board for CPF contributions for the last 12 months which were not paid by
the company;

b.

Ahmad, an employee, for compensation due under the Workmans compensation


Act amounting to $17,000;

c.

Fiona, an employee, claiming vacation leave pay mounting to $2,000;

d.

James, a former employee, for two months salary amounting to $2,500;

e.

A & S LLC, for legal costs incurred in the winding up; and

f.

Goon, for retrenchment benefits amounting to $5,000 which he forgot to collect


when he was retrenched eight months ago.

Advise the Liquidator on order of priority of these claims.


6.

What is the main difference between receivership and judicial management?

7.

ASD Pte Ltd has several creditors who are pressing for payment. The company is on
the verge of completing a large project in Malaysia and expects substantial payment in a
few months. With this payment the company would be able to pay off about 70% of its
current debts. Sam, to whom the company owes about $0.5 million is aware of the project
in Malaysia but is not prepared to wait. He feels that if he issues a winding-up petition the
directors will use their personal funds to pay him off. The directors seek your advice.

24

Tutorial Questions

Chapter 13
1. Earnest & Anderson are auditors for Emrose Ltd. For the years ended 31st Dec 2002 to 2004
the audited accounts presented at the companys general meeting show that the
company has made profits; when in fact the company has made losses. Several banks
rely on the accounts and extend Emrose Ltd large credit facilities. The banks eventually
suffer huge losses and want to sue Earnest & Anderson. Advise the banks.
2. A contractor while doing some excavation work carelessly damaged an underground pipe as
a result of which water supply is cut off to some chemical factories in the Tuas region.
The business of these factories comes to a standstill for about five hours and they suffer
large financial losses. Advise the contractor, assuming there is no property damage or
personal injury.
3. On the 1st of January 2006 at about 3 a.m. Jack was driving home after a party along
Thomson Road, which has a dual carriage and three lanes on each side. He had a few
drinks and was driving a little fast as he thought there would be no traffic on the road at
that time. Jacks car collided into Ah Seng who was on his bicycle and on his way to work.
Ah Seng is badly injured and is paralysed from the waist downwards. Ah Seng was partly
to blame for the accident as he changed lanes without looking out for traffic. Advise Ah
Seng as to his rights and the damages he can recover. What if Ah Seng was the chief
executive officer of a large multinational company instead of being a road cleaner?
4. Wanda goes to Carry-4-You-Supermarket. A child drops a carton of milk on the floor and the
milk spills out of the carton. Wanda, who was looking at the goods on the shelves, did not
see the spill, stepped on it, slipped and fell and fractured her hip. It is established that this
occurred some 20 minutes after the spillage occurred. Wanda was at that time just
recovering from hip replacement surgery and the fall resulted in a very severe fracture
and complications. Wanda is also very upset as due to the fracture she cannot take part
in the final round of the Mrs Universe beauty pageant next week. Advice Wanda. Would
your answer be the same if a worker noticed the spill, cleaned it up and put up a Wet
Floor sign but Wanda did not read it?
5. Vivian has a safe deposit account with the ABS Bank. While she is on an overseas trip, her
maid gets her safe deposit box key and goes to the bank where she forges Vivians
signature and gains access to Vivians valuables. The signatures look quite different and
the maid speaks with a strong foreign accent, but the counter staff, Jenny, does not
counter check as Jenny thought the maid was running an errand for Vivian and Vivian
may be offended if Jenny created a fuss. Advise Vivian.
6. Zaint is admitted to Glee-eagles Hospital for angioplasty. Zaint is very scared of hospitals and
has to be heavily sedated. Owing to his sedated state the surgery was explained to his
wife but he was asked to sign the consent which he did in a very drowsy state. The

25

Introduction to Business Law in Singapore: Instructors Manual

procedure is carried out by Dr Who is an employee of the hospital. Zaint dies during the
procedure owing to complications. This is quite unusual in this type of surgery.
Statistically only 1 in 100 persons suffers from the type of complications that Zaint did.
Advise his estate. Do you think Zaint consented to the the risk of the surgery?
7. Xanti, an Indonesian maid, was instructed by her employer to stand on a window ledge and
clean the outside of the window. Whilst cleaning, Xanti leaned forward, lost her balance,
fell 10 storeys and died. Advise her parents. Do you think Xanti would have consented to
the risk? Instead of suing for negligence, can Xantis family make any other claims or
claim under the Workmens Compensation Act?
8. Simon, a stockbroker, tells his long-time client Yang to invest in XYZ Ltd knowing very well
that Yang will act according to his suggestions. Simon believes that the company will do
well financially. The company suffers a loss and the price of its shares tumbles. Yang
suffers a great financial loss and has to sell his house to settle the debts. Advise Yang.
9. Tan brings his son to play in a public playground. While playing a wooden bar drops off and
Tans son fractures his hand. There is a sign in the playground that states that the
National Parks Board will not be liable for any injuries or losses. Advise Tan.
10. Advise on the employers civil liability for the employees following acts:
a.

An employee who has been provided with a company car visits his friend in
hospital during his lunch break and whilst there injures a pedestrian in the
hospital car park;

b.

An employee working in a petrol station, throws down a cigarette he has been


smoking which comes into contact with some petrol on the floor causing a huge
explosion which damages the plaintiffs car; and

c.

An employee working in a laundry negligently damages a customers


expensive suit.

11.

Yaos Drinks brand drink called Ramso has been in the market for ten years. The name
Ramso was not registered as a trademark. The bottle is distinctly purple and the words
Ramso appear in bright green. Y, an employee, quits Yaos Drinks and sets up his own
soft drink making company. He manufactures a drink called Rumso. It is also distinctly
purple and the words Rumso appear in light green. However, it tastes different from
Rumso. Advise Yaos Drinks.

26

Tutorial Questions

Chapter 14
1. Dr No works as a researcher with Glaxi Ltd, a pharmaceutical company. In 2004 after years
of research, he develops a new wonder drug which could be used to treat dengue. Can
Glaxi Ltd patent the invention? Shortly thereafter, Dr Yeah, another researcher, also came
up with a similar chemical compound after years of research. Can Dr Yeah also apply for
patent rights or make use of the compound to do research to see if it cures other types of
insect-borne diseases?
2. Barker is a sole proprietor and has just started a bakery. She is unsure of what to call it. She
comes to you for advise on registration of her trade name with the following alternatives
a) Singapore Cake Shop; b) Chu Lian Cake Shop, Chu Lian being her first name; c)
Delight Cake Shop; d) Traz Cake Shop; e) Bangawan Silo Bake Shop; f) TCL Cake shop.
Advise her. What if she finally chooses the name Traz and her business is a success
can some one set up a) a Tras Bake Shop; b) a Traz Arts & Crafts shop in Singapore?
What if Barker had not registered the trade name in the first place? Besides the trade
name, what else can the bakery register as a trade mark?
3. Zia writes several songs (in English) and the music composition for them. He gets Yoyo
Company to record the songs and assigns the copyrights in them to Yoyo Company. Yoyo
Company then releases CDs containing the songs. Mossade pirates these CDs and sells
them at a cheaper price. Oolala Company using the same tunes produces a similar CD,
but the lyrics are in Mandarin. Klass Nil, a broadcast station, plays the English version of
the song on radio and Charlie tapes it for his own private use. Einstin Company uses a
song from the English version of the CD in its advertisements as background music.
Discuss the rights and liabilities that arise.
4. ABC Ltd is the authorised Singapore agents for BMW cars made in Germany. They have the
consent of the owner of trademark to use the trademark in Singapore in respect of the
said cars. Teo is an eager businessman who imports BMWs from the authorised agent in
Japan. By doing so Teo is able to sell the cars cheaper than ABC Ltd. ABC Ltd is
unhappy and seeks your advice.
5. Xxtra Ltd cuts out a photograph of model Cindy Crawford from an advertisement in a
magazine and superimposes it on its own advertisement so that it appears that she is
endorsing their products. Discuss. What if Xxtra Ltd took a picture of her during a public
function and tried to use that picture instead in its advertisements? What if she came to
their shop and the company took a picture of that and used it for advertising purposes?
6. Advise whether there would be a copyright infringement in the following events:
a.

You download a page from a website;

b.

You scan a picture into your web page;

27

Introduction to Business Law in Singapore: Instructors Manual

7.

c.

You forward an e-mail to your friend;

d.

You play a CD you bought in your room;

e.

You play a CD you bought in your house during a birthday party;

f.

You play a CD in a pub/bar you own;

g.

You buy a book and make a copy of some pages for your friend;

h.

You buy a pirated software from a shop for your own usage;

i.

You video tape your brother who is playing in a football match, and

j.

You video tape your brother who is acting in a professional theatre production.

June X sets up a shop buying and selling second-hand jewellery. It is the first of its kind in
Singapore and it is a big hit. Inspired, Yen subsequently sets up a similar shop. However,
the name/get-up of Yen's shop is totally different. Advise Yen whether he has breached
copyright laws.

28

Tutorial Questions

Chapter 15
1.

Explain briefly the difference between loans and overdrafts.

2.

What is the maximum rate of interest chargeable and can compound interest be charged
on loans and overdrafts?

3.

Simon mortgages his house to a bank to secure facilities granted to RED Pte Ltd. A
mortgage is drawn up and lodged with the Singapore Land Authority. The company goes
into liquidation and Simon cannot pay the interest and principal amount owing to the
bank. Advise the Bank. If Simons father-in-law is prepared to lend him the money to
repay the bank what should Simon do?

4.

What type of charges can a company create? Briefly explain the difference between the
types of charges the company may create.

5.

Other than assets such as land, machinery, equipment and stock-in-trade what other
properties of a company can form the subject matter of a charge?

6.

RTY Pte Ltd has 40 metric tonnes of rice which is due to be delivered to a customer in
ten days time. Meanwhile, RTY Pte Ltd needs some funds to cover a trust receipt which
has fallen due. Advise RTY Pte Ltd how they can use the goods in their warehouse to
raise the necessary funds.

7.

Jason sent his sports car (a Porsche) for some minor repair. The repairer told Jason to
come back within two hours to collect his car. Jason came back after two hours and saw
that the repairer had completed the job and he was very pleased. The repairer then
presented Jason with a bill for $500. Jason reached into his pocket for his wallet and
found that it was missing. He told the repairer that he will drive the car home, get the
money and come back and pay him. The repairer told Jason that he will not release the
car unless he is paid. Jason is angry that the repairer is holding on to his $150,000 car
over a $500 bill and calls you for advice.

8.

Michael took a loan from DCS Bank to pay for his university tuition fees. The bank
required two guarantors for the loan and the loan officer who was a good friend of
Michael gave Michael the banks standard form guarantee and told him to get the
guarantors to sign the documents and return them to the bank thereafter. Jason
approaches his grandmother, who is 90 years old and suffering from advanced
Alzheimers disease and his nephew who is 20 years old to sign the guarantees and
returned the documents to the bank. Michael collected the loan monies and took off on a
holiday to Thailand where he fell in love with a local beauty and decided not to return to
Singapore. The bank has sent letters of demand to the two guarantors and Michaels
nephew seeks your advice on what to do.

29

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