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Factors that prevent a contract from being enforceable Vitiating factors

Misrepresentation.
*Pre-contractual representations generally do not have any legal effect, except
contractual misrepresentation.
This question deals with the law of contractual misrepresentation. In order for the
statements to amount to misrepresentation, A (representee) will need to show that
the statement is a statement of fact, B (representor) must have addressed the
statement to A (representee) and induced A (representee) to enter into the
contract. Lastly, the statement must be false and resulted in loss suffered by A.
(representee)
The following statements were made by B.
Statement 1: ______
Statement 2: ______
1. Statement of fact

As a statement of fact, it must be a verifiable fact and scientifically capable of


proof, and it must not be a law, an intention, about the future, an opinion or
a commendatory puff. Statement 1 is likely to be an existing fact since the
questions of derivation and testing are scientifically verifiable. (Refer to case laws if
other situations apply) However, Statement 2 is not a statement of fact because
______.
/Commendatory puffs are not capable of scientific verification, and hence they
are not regarded as statement of facts. And thus in this case, ______, it is not a
misrepresentation.
/Generally, a promise of intention or prediction cannot be actionable in
misrepresentation because at the time the statement was made, it cannot be said
for sure whether it is true or false. However, a statement of intention as to future
action could be a false statement of fact if, at the time of making the statement of
intention, the representor did not in fact hold that intention. (Edgington v
Fitzmaurice (1885)). Since in this case __________, hence it is/is not a
misrepresentation.
/Similarly, an erroneous statement of law is normally not capable of founding a
claim in misrepresentation, on the premise that everyone must know the law. Hence
___ (facts of case), thus it is/is not a misrepresentation.
/Generally, law of misrepresentation does not render mere expression of opinion
actionable in misrepresentation. However, should the representor making the
statement have a high capacity, it would be likely regarded as a statement of fact

by the law. Since in this case B (representor) has high/low capacity given that he is
____, the statement is/is not a statement of fact.

2. Addressed to representee

The statement has been addressed to A since _________. It does not matter that
the statement is not addressed to A specifically, as long as it was addressed even to
the world at large, it has still been addressed to A.
3. Inducement

*Dealing with pre-contractual statements, because those formed after contracts


have no inducement
Next, for the false statement to be a misrepresentation, the statement must induce
the representee to enter into the contract (Attwood v Small (1838)). However, the
statement does not have to be the sole inducing cause (Edgington v Fitzmaurice
(1885)). On the facts, A relied on ____ to enter into the contract which amounts to
sufficient inducement.
(NOT AWARE OF STATEMENT = NO INDUCEMENT According to Horsfall v
Thomas, the court held that if the representee did not know of the representation,
then he cannot be induced into the contract.)
Mere Opportunity to verify truth of facts if not taken, claim in misrepresentation is
still valid as seen in Redgrave v Hurd (1881). Additionally, according to Panatron Pte
Ltd v Lee Cheow Lee & Another, the court held that once inducement were
established, it is no defence that representee acted incautiously and failed to take
those steps to verify the truth of the representations which a prudent man would
have taken. Furthermore, according to Jurong Town Corp v Wishing Star Ltd (No 2),
the court observed that even if representee did take steps to verify the truth, there
may still be reliance and inducement. Hence, in this case, the claim in
misrepresentation is still valid even with the opportunity to verify the truth.
The general rule is that silence does not amount to misrepresentation (Keates v
Lord Cadogan). Silence may, however, amount to misrepresentation where:
(a) silence amounts to a partial non-disclosure if what is stated becomes a half-truth
by what is left unsaid. (Dimmock v Hallett (1866)).
(b) A change in circumstances arose which rendered a previously truthful statement
misleading (With v OFlanagan (1936)).
(c) The law imposes a duty upon one party to disclose the facts to the other party
where Uberrimei Fidei utmost good faith is required. (E.g. insurance contracts)
4. Statement must be false

Statement is obviously false because __________.


5. Representee suffered a loss

Losses has clearly been suffered as A ______________.

*After justifying that it is a misrep, then go into pigeon-holing the type of


misrep.
Types of misrepresentation.
Fraudulent. According to case law Darry v Peek (1889), Fraud is established
where it is proved that a false statement is made knowingly, without belief in its
truth or recklessly and careless as to whether it be true of false. In this case it
seems that B has made the statement _____ which will amount to a fraudulent
misrepresentation. However as the judge is often slow to hold someone fraudulent,
and the onus is on A (representee) to prove that there is such fraud, A may consider
claiming negligent misrepresentation.
Negligent misrepresentation arises when the false statement is made by the
representor without due care, as seen in case law Howard Marine v Ogden (1978).
According to S2(1) Misrepresentation Act, the presumption is that the
representation is negligent and the onus is on the representor to prove that he had
reasonable grounds to believe and did believe up to the time the contract (points
where statement and contract was made representor had reasonable grounds to believe)

was made that the facts represented were true and if so, it would be considered as
innocent misrepresentation. In this case, _______, the burden shifts to B to prove
that they had reasonable grounds for believing the truth of the statement up until
the time the contract was made. Given that the facts of the case are _______, we can
say that it is/is not negligent misrepresentation.
Innocent misrepresentation is where a statement is made in the absence of
fraud and fault, with the representor making the statement with the honest belief
and having reasonable grounds to believe in its truth. In this case, it seems like B
had reasonable grounds for believing the truth of statement but nevertheless
statement was false. It was a statement honestly made which hence will amount to
innocent misrepresentation.
Upon establishment of the Fraudulent misrepresentation, A will have the right to
rescind (once rescind, cannot change the mind!) the contract and sue for damages
under S2(1) Misrepresentation Act. Rescission will require both parties to be
restored to the position they were in as if the contract was not entered. Hence,
several obstacles may hinder rescission such as in this case _______. (below)
Upon establishment of the Negligent misrepresentation, A will have the right to
rescind (once rescind, cannot change the mind!) the contract and sue for damages
under S2(1) Misrepresentation Act. Rescission will require both parties to be
restored to the position they were in as if the contract was not entered. Hence,
several obstacles may hinder rescission such as in this case _______. (below) (After
establishing the absence of obstacles to rescission) However one thing to note is
that the court may take away As right to rescind and award damages instead under
S2(2) Misrepresentation Act. This occurs where the innocent party had the right to

rescind but the court feels that rescission is too severe and award damages in lieu,
if it feels that it would be equitable to do so. (*right to rescind will be taken away if
the court feels that rescission will cause undue hardship to the representor)
Upon establishment of the Innocent misrepresentation, A will have the right to
rescind (once rescind, cannot change the mind!), and also the right to claim
indemnity (compensation only for the loss A suffered due to the obligation imposed
on you due to the contract use only if have!) and/or rescind the contract.
Rescission will require both parties to be restored to the position they were in as if
the contract was not entered. Hence, several obstacles may hinder rescission such
as in this case _______. (below) (After establishing the absence of obstacles to
rescission) However one thing to note is that the court may take away As right to
rescind and award damages instead under S2(2) Misrepresentation Act. This occurs
where the innocent party had the right to rescind but the court feels that rescission
is too severe and award damages in lieu, if it feels that it would be equitable to do
so. (*right to rescind will be taken away if the court feels that rescission will cause
undue hardship to the representor)
Obstacles to rescission:
1. Lapse of reasonable time (Leaf v International Gallaries (1950))
2. Act inconsistent with ownership modifying it, using it
3. Restitutio in integrum impossible parties cannot be restored to original
position
4. Court takes away the right to rescind and awards damages in lieu under S2(2)
of the Misrepresentation Act (e.g. will cause undue hardship to representor/
too grave to rescind) *Must first be given the right to rescind
5. Third party eights affected (e.g. representee sold it to 3 rd party cannot
rescind and affect 3rd party)
6. Affirmation knows of misrepresentation but continues with contract
Extra: Damages is monetary compensation ordered by a court to be awarded to
the innocent party for the consequences suffered: S2 (1) Misrepresentation Act. In
this case, such damages include the reliance cost and expectation cost incurred to
by a new perfume. It should be note that since it is difficult to quantify the loss of
reputation, Debbie may not be able to claim damages from it.
Exclusion of liability for misrep invalid unless reasonable under UCTA
framework, Orient Centre Investments Ltd and Another v Societe Generale (2007).
ILLEGALITY.
As B have flouted the provisions in the _______, this is a case of statutory illegality. In
order to determine whether A is able to refuse payment to B for their service, we
have to examine the construction of the statutory provision which prohibits the
illegal contract. The two types of statutory illegality are the contract being illegal at
the outset and the contract being illegal due to performance.

If the contract is illegal at the outset, it would be void regardless if all parties are
aware of the statutory illegality as seen in Re Mahmoud & Ispahani (1921). The
parliaments intention was to strike at the root of contract and prevent parties from
entering into it. If so, A will not be obliged to pay B. In this case, A has ______ which
shows that the contract was illegal at the outset.
However, the contract between A and B is for B to ____. This is clearly not an illegal
contract.
Whereas, it was the performance of the contract that was illegal. B has _____. This
contravenes the ______. Applying the case of St John Shipping Corporation V Joseph
Rant Ltd (1957), the unlawful performance on an otherwise lawful contract does not
necessarily render the entire contract void.
Due to _______, where a fine was imposed for non-compliance, it is likely that noncompliance would not cause the entire contract to fail as seen in Shaw v Groom
(1970). The _____ clearly intended only to prohibit Bs conduct of _____ and not to
prohibit the contract between A and B. Hence, B will likely face criminal sanction
but both parties contractual rights and obligations will remain unaffected by the
illegality and A will still have to pay B.
However, if in the case where A is required to ____ and causing extra cost to be
incurred, he will be able to recover the damages as he was unaware of the illegality
as in the case of Archbolds (Freightage) Ltd v Spanglett Ltd (1961). But if both
parties are in equal fault, neither can establish a cause of action against the other
without relying on its own wrongdoing, hence neither party obtains a remedy (Koon
Sen Contruction Pte Ltd v Chenab Contractor Pte Ltd and Another (2008))
Restraint of trade.
A restraint of trade agreement is defined as one in which a party (covenantor ex
employee) agrees with any other party (covenantee ex employer) to restrict his
liberty in future to carry on trade or business with other persons not parties to the
contract in such manner as he (covenantee) chooses.. The restraint of trade in this
case is _______.
As a principle, all restraint of trade clauses are illegal and void because of contrary
to public policy as stated in Nordenfeit (1894) unless these two requirements are
fulfilled.
Firstly, the convenantee must prove that the clause is reasonable between them to
protect the legitimate interests of the covenantee as seen in Stratech Systems Ltd v
Nyam Chiu Shin & Others (2005). Several conditions are to be met (refer to below).
In this case, there is legitimate reason for B to _____ as it will ______.
Guidelines/conditions

1.
2.
3.
4.
5.

Time how long is the restraint


Space where is the restraint
Scope how wide is the restraint
Nature of employment
Subject matter personal skills, knowledge, trade secrets, intellectual
property rights, goodwill of business etc.

Once the first requirement is fulfilled, the clause is prima facie reasonable unless
the covenantor shows that the clause is injurious to public interests. The clause
should not restrict competition, have a significant impact on trading agreements,
deprive someone of rice-bowl, affect treaties, or result in a monopoly. In this case,
the clause seems to ____.
In the event that the clause is unreasonable, the court can be invited to apply Blue
Pencil rule which allows the court to delete and not add to the clause as long as
the clause remains to make sense. After applying the Blue Pencil rule, the clause
might read ______, and thus this would be enforceable.

Incapacity - Minor
Minors are persons who have not reached the age of majority of 21 years. In
Singapore, under the Civil Law Act amended in 2009, contracts entered into by
minors who have attained the age of 18 years have the same effect as if they
were contracts entered into by persons of full age and such minors are allowed to
bring certain legal proceedings and actions in their own names as if they were of full
age. Here, they can carry out certain business-related activities.
Other than contracts for such commercial activities, contracts entered into by
minors are generally unenforceable.
In this case, A is _ (age), he is considered a minor. Besides, since they have not
attained the age of 18, they will not fall under the Civil Law Act amended in 2009.
The exceptions are the three types of minors contracts which are valid contracts,
voidable contracts and ratifiable contracts.
Valid contracts bind both the minor and other party. Thus, they are fully
enforceable. The contract on the whole must benefit the minor. Such contracts
include beneficial contracts for necessaries and beneficial contracts of employment.
Beneficial contracts for necessaries
*Minors have yet to perform their obligations, perform already cannot claim Valentini v
Canali (1889) because already enjoyed/consumed the benefit.

S3 Sale of Goods Act defines necessaries as goods suitable to the condition in life
of the minor or other person concerned to his actual requirements at the time of the

sale and delivery. However, not all necessities are necessaries, if the minor had
already ample supply of that necessity. (Nash v Inman (1908)). It should also be
note that, according to Peters v Fleming (1840), necessaries can be a luxurious item
if they are considered appropriate for minor in his position.
Hence in this case, _____ can be considered as necessaries given that ________, and
thus the contract is fully enforceable.
Beneficial contracts for employment
*Minors have yet to perform their obligations, perform already cannot claim Valentini v
Canali (1889) because already enjoyed/consumed the benefit.

The main rule for contract for service will be binding upon the minor if the contract
is on the whole beneficial to him. A contract not beneficial to the minor will be
unenforceable (De Francesco v Barnum (1980)).
Hence in this case given that the contract is/is not wholly beneficial towards A
(minor), the contract is enforceable/unenforceable.
Voidable contracts are valid and binding upon the other party (the major) and the
minor, unless the minor repudiates. The minor is entitled to repudiate the contract
without any liability on his party any time during his infancy or within a reasonable
period after he attains majority. Such a contract typically arises when a minor
acquires an interest in a subject matter (i.e. lease, shares, and partnership) where
the minor faces recurring obligations (Davies v Beynon-Harris did not repudiate
within reasonable time, hence held a liable).
Ratifiable contracts are not valid or enforceable against the minor unless he
ratifies after he attains majority. The contract nevertheless binds the other party.
For voidable and ratifiable contracts, the legislature compels a minor to return
property improperly obtained by him by virtue of an unenforceable contract under
s3 of Minors Contracts Act.

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