GSP165-The Law and You

Question 1

An offer is an essential element required to make a valid contract. Please outline and explain in your own words what an offer is. Please include in your explanation all matters related to the concept of an offer, such as the ways in which an offer may be made, the duration (i.e. how long it lasts and how it can be terminated) of offers, and matters that may appear to be an offer but do not amount to an offer (in about 350 words).

Question 2

This concerns a contract made between 2 companies: Extrapayne Pte Ltd (“Extrapayne”) wanted to build a swimming pool in its large plot of land.

Extrapayne asked Ino-cent Landscape Pte Ltd (“Ino”) if the latter could undertake the construction of the swimming pool.

Ino agreed to construct it for a price of $150,000 payable in stages. The construction was to be completed in 3 months. A contract was drawn up between the 2 parties.

Ino started the initial stages of the construction. Extrapayne paid for the stages that were completed according to the contract.

However, after the initial stages were completed in 2 weeks, Ino did not keep to the schedule of construction according to the contract. Ino wanted Extrapayne to pay for stages of

construction that were not yet done, claiming that it was facing cash flow issues, and needed the payments to help it to pay its workers. Extrapayne paid a sum of $10,000 in advance to

help out with Ino’s internal issues. However, Ino continuously delayed the construction because of its own internal issues. It also did not carry out the works for the advance payment of $10,000.

Ino is now 6 weeks behind time. Extrapayne is very unhappy about the delay. Ino keeps giving excuses for the delays. Extrapayne informed Ino that it would bring in substitute

contractors if it continued to delay, but Ino stated that if Extrapayne did that, then Ino would consider that Extrapayne had breached the contract. If Extrapayne were to call in a substitute contractor to take over the construction works and try to complete the construction on time, it would have to pay a premium of about $80,000.

This is because it would involve extra manpower and overtime deployment of workers to complete the works on time.

Extrapayne wants your opinion on what it can do. Please give your opinion in a logical manner so that Extrapayne can follow your thought process. You may wish to structure your answer as follows:

GSP165 Tutor-Marked Assignment

Singapore University of Social Sciences Tutor-Marked Assignment – Page 4 of 7

(1) List the relevant facts.

(2) State whether Ino had breached the contract, and cite what the breach was.

(3) If Ino had breached the contract, explain what Extrapayne could do with the contract.

(4) Applying concepts from contract law relating to breach of contract and the remedies that the law gives to the party who did not breach the contract, identify the remedies that are available to Extrapayne.

(5) Extrapayne also wants to know if it would be considered to have breached the  contract if it brought in a substitute contractor.

(6) Extrapayne would like to know if it could claim the sum of $10,000 that it had paid in advance for works that Ino never did.

(total of about 300 words).