It is also inappropriate for the court to impose its own view of how the parties should conduct themselves. 2 In Thio Keng Thay v Sandy Island Pte Ltd SGHC 175 the High Court of Singapore confirmed that an employer may recover damages for rectifying defects even when it has done so in breach of a contractual defects notification procedure. It is not easy to have a term implied into the contract; generally speaking, a term may only be implied if the contracting parties did not contemplate the gap in the contract and the term is necessary for the contract to work. You can read more about implied terms here. This is done by awarding compensatory damages. Nicolas of Farallon Law Corporation is extremely knowledgeable and well-informed in his areas of laws. Walter assisted us in reviewing and updating our company’s Privacy Policy and Terms of Service for our website. Contractual damages are generally awarded to compensate the plaintiff for losses arising out of the defendant's breach of contract. The principal remedy for breach of contract is monetary compensation, also known as damages in legal parlance. Instead of seeking punitive damages, aggrieved parties could: In view of the Singapore court’s reluctance to award punitive damages for breaches of contract, aggrieved parties should generally think twice about claiming punitive damages. Obviously, not every agreement you make will be a contract (e.g. The aim of awarding punitive damages is to punish the party in breach, and to discourage similar behaviour by both it and others in the future. The Singapore Court of Appeal has held in PH Hydraulics & Engineering Pte Ltd v Airtrust (Hong Kong) Ltd that as a general rule, punitive damages cannot be awarded for breach of contract in Singapore. The innocent party is entitled to bring a claim for damages for losses caused by the breach. Two other elements must be satisfied for a failure to perform to constitute “breach of contract”: In the vast majority of instances, a contract obligation is written down in the contract documentation, and it is known as an express term. You may also wish to check out our carefully drafted contract templates which you can easily amend/add to, any terms, as you deem suitable. WROTHAM PARK DAMAGES IN SINGAPORE: ONE SMALL STEP Jason Fee * Turf Club v Yeo Damages for breach of contract are generally compensatory in nature, placing the plaintiff in the same position as if the contract had been performed. In the recent decision of PH Hydraulics, the Singapore Court of Appeal established that where the case concerns a breach of contract with no concurrent claim in tort, punitive damages cannot be awarded. Therefore, the courts should have the discretion to award punitive damages for breaches of contract in deserving cases. Even if it did, I find also that Tembusu’s breach did not cause the failed listing. "Remedies for Breach of Contract I: Damages." If you are the aggrieved party in a contractual dispute and would like to discuss the possible claims you may have with a lawyer, feel free to get in touch with one of our corporate and commercial lawyers. defendants had breached the contract between the plaintiff and the defendants, but awarded nominal damages of $10 because the trial judge found that the plaintiff could not prove that its claim for loss of a chance was caused by the defendants’ breach. A recent decision from the Singapore Court of Appeal gives insight into the approach taken in that country. Assuming that a valid and legally binding contract exists, a breach of contract occurs when a contracting party (the “defaulting party”) fails to perform, without lawful excuse, a contractual obligation. & Engineering Pte Ltd [2015] SGHC 307, the Singapore High Court confirmed that punitive damages are in fact available for breach of contract in Singapore law. Singapore's first bitcoin trial: Exchange operator found in breach of contract and trust, to pay damages B2C2 co-founder Maxime Boonen (centre) with his lawyers at … This might add to the length, complexity, and costs of litigation. Aggrieved parties may also be unfairly able to coerce the parties in breach into making large settlements out of court in order to avoid being made to pay punitive damages. 8.8.9 First, if the breach of contract by one contracting party (the ‘party-in-breach’) causes loss to the other (the ‘aggrieved party’), the party-in-breach may be ordered by the courts to compensate the aggrieved party in money damages for those losses, in lieu of the primary obligations left unperformed under the contract. in Singapore. I find that it did not suffer any loss as a result of the failed listing. He could see the nuances…, Applying for POA for HDB from overseas. By default, every breach of contract entitles the innocent party to damages for losses suffered by the innocent party stemming from the breach of contract. Can I compel another party to honour an agreement? Quoine appealed, and the Court of Appeal took up the case using a five-judge panel. However, if you are a party to an action for breach of contract, you may be wondering how willing the Singapore court will be to award damages to punish the party in breach, i.e. Thus, using the same example of a contract for supply of goods, the mere fact that another buyer is willing to pay a higher price is not lawful excuse for the supplier’s refusal to supply. © 2014-2017 First World Problems Pte Ltd. All rights reserved. Use of this site constitutes acceptance of our Terms of Service and Privacy Policy. Guide to Indemnity Clauses in Singapore Commercial Contracts. The general aim of awarding damages for breaches of contract is to compensate the aggrieved party for losses suffered due to the other party’s breach of the contract between them. Instead, the court has merely stated that “planned and deliberate” fraud alone would be insufficient to render a case “exceptional”. Liquidated damages provisions in contracts are unenforceable if they constitute a "penalty". © 2014-2017 First World Problems Pte Ltd. All rights reserved. Contracts are legally binding agreements. contract, accept the repudiation, and proceed to claim damages for breach of the contract, both parties being discharged from further performance of the contract;orhe may seek from the court an order for specific performance with damages for any loss arising from delay in performance. The past few years have seen subtle but important shifts … Siraj has been very helpful from day 1. The appellant’s basis for doing so was that the respondent was in breach of an agreement found in a contract note to arbitrate any disputes in Singapore. It may be that it would be extremely inconvenient for electricity retailers to have to prove their damages each time a contract … At issue was an “agreed damages” clause that required the respondent to pay S$400,000 for breach of a sale and purchase agreement. Last updated on April 2, 2020. Preventing oneself to perform a duty as stated in the contract. punitive damages (or … The court was also of the view that contractual conduct would be better managed through legal regulation instead of judicial remedies such as punitive damages. Your Guide to Non-Disclosure Agreements in Singapore, Your Guide to Employment Agreements in Singapore, Your Guide to Tenancy Agreements in Singapore, Your Guide to Shareholder Agreements in Singapore, Your Guide to Partnership Agreements in Singapore, Your Guide to Distributor Agreements in Singapore, Your Guide to Consultancy Agreements in Singapore, Your Guide to Freelance Service Agreements in Singapore, Your Guide to Service Agreements in Singapore, Your Guide to Business Referral Agreements in Singapore, Requisite elements in the formation of a contract. Any Singapore lawyer will tell you that a breached contract is a serious matter no matter how big or small the actual damage is. What are Warranties, Conditions and Innominate Terms? The “remedial gap” argument suggests that existing remedies are inadequate in punishing and deterring outrageous behaviour. employees who fall under the Employment Act, View all lawyers for Contractual Disputes. Through contractual interpretation, the court ascertains the meaning of the express term as intended by the contracting parties. Non-performance (i.e. In the absence of specific criteria, awarding punitive damages for breaches of contract would lead to the undesirable effect of commercial uncertainty and instability. If a more formal mode of dispute resolution is preferred, An alternative mode of dispute resolution is. Sale of Goods Act), widespread trade usage, and Court-implied terms. In Basic Principles of Singapore Business Law, edited by Andrew Phang, 363-409. get in touch with one of our corporate and commercial lawyers, How to File a Proof of Debt Against a Company in Liquidation, Winding Up a Singapore Company: Grounds and Procedure, Insolvency: Claw-Back of Assets From Unfair Preference and Undervalued Transactions. You may also wish to check out our carefully drafted contract templates which you can easily amend/add to, any terms, as you deem suitable. Obligations in a contract are undertaken voluntarily by the parties, who have themselves agreed on the scopes of their respective obligations. Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk. The court in PH Hydraulics listed out several arguments for and against the awarding of … However, not every failure to perform constitutes “breach of contract”. An excuse based on social or commercial considerations falling short of a lawful excuse will not absolve a defaulting party from breach of contract. For example, a contract for supply of goods may contain a price adjustment clause allowing the supplier to make reasonable adjustments to the contract price if he experiences difficulty obtaining raw material for his goods. Examples of a breach of contract: 1. Accordingly, there is no basis for awarding punitive damages for breaches of contract. “In assessing damages, whether for a breach of contract or for a tort, the general rule is that the plaintiff recovers the loss he has suffered, no more and no less. Implied Terms: Filling in "Gaps" in a Contract, Using Force Majeure/Frustration to Escape Contracts in Singapore, Contracting via Electronic Communications, Assignment and Novation: Transferring Contracts in Singapore, 7 Issues to Consider Before Being a Loan Guarantor in Singapore, Calls on Performance Bonds in Construction Disputes: What to Do. Can I compel another party to honour an agreement? Citation. Guide to Indemnity Clauses in Singapore Commercial Contracts. This is unless they think their case could involve “a particularly outrageous type of breach”. Thank you. Singapore Contract Law provides an innocent party with four main remedies for breach of contract: Monetary Compensation (Damages): A money damage award is a sum of money awarded to the claimant as compensation for financial losses caused by a breach of contract. 24 In coming to its decision to uphold this “agreed damages” as a liquidated damages clause, the Court compared this amount payable against the entire value of the contract. However, that defense fell on deaf ears in March 2019 when the Singapore International Commercial Court ruled against the cryptocurrency exchange, saying the exchange was guilty of a breach of contract and a breach of trust. However since there is no room for the concept of punishment in contract law (as discussed above), there is no “gap” to begin with. a husband agreeing to pick up his wife after work). Pe… Once the meaning of the express term is ascertained, the issue of whether there has been a failure to perform the obligation can then be determined based on the evidence available. valid and legally binding contract exists. They are not designed to punish the breaching party, but merely make the party that was breached against “whole again,” as it is commonly phrased. However, if you are a party to an action for breach of contract, you may be wondering how willing the Singapore court will be to award damages to punish the party in breach, i.e. But I have awarded it only nominal damages of S$1,000 for breach of that agreement. Generally, a valid contract should have the following elements: 1. Sincere services rendered. … the defaulting party fails to fulfil a promised objective or end-state), Doing the very thing the defaulting party has promised not to do; and. when a defaulting party refuses to perform what he has promised to do); Defective performance (i.e. Apart from express terms, there are three other sources of contractual obligations: statute (e.g. For the above reasons, the court therefore held that punitive damages would generally not be awarded for breaches of contract. Failure or refusal to perform his or her duty as stated in the contract; 2. The general aim of awarding damages for breaches of contract is to compensate the aggrieved party for losses suffered due to the other party’s breach of the contract between them.. Singapore: Thomson Learning. Nonetheless, breaches of confidentiality and whether they can qualify for Wrotham Park damages aside, it is now clear that Wrotham Park damages are … The information provided does not constitute legal advice. Currently, they’re going at 10% OFF: These lawyers are selected based on their number of positive reviews and years of experience in this subject you are enquiring about. The appellant sought an anti-suit injunction to prevent the respondent from continuing with the Swiss proceedings. There is no need to show that the defaulting party intentionally failed to perform. 3. Currently, they’re going at 10% OFF: These lawyers are selected based on their number of positive reviews and years of experience in this subject you are enquiring about. Therefore, it is not for the court to impose additional obligations on the party in breach to give more than what it had agreed to give under the contract. These remedies include: What is regarded as “outrageous” behaviour would vary from person to person. Liquidated damages provisions in contracts are unenforceable if they constitute a "penalty". This is because regulators are better equipped to assess and remedy the wider social and economic implications of any measures they may put in place. Singapore Pte Ltd v Comfort Resources Pte Ltd [2009] SGCA 34, the Court was confronted with a scenario where both parties to the contract had committed breaches and one of them had terminated the contract based on the other’s breach, with the other party in turn claiming that the termination The past few years have seen subtle but important shifts in how the concept of a penalty is defined. Awarding punitive damages could encourage aggrieved parties to “tag on” claims for punitive damages as a matter of course. 796 Singapore Academy of Law Journal (2016) 28 SAcLJ interest”2 or a purported right to performance.3 Such damages are usually distinguished from other forms of contractual damages which are said to compensate for pecuniary losses flowing from the breach Even malicious conduct, such as making false accusations against an innocent party, would not be sufficient for the court to award punitive damages. Unless the contract provides otherwise, there is also no need to show that the defaulting party failed to exercise reasonable precaution in performing the promise. Punitive damages may be awarded in an action in tort, for civil wrongs done against an innocent party and which do not arise from any contractual relationship between the parties. Breach of contract is a very serious legal matter. Although straightforward penalty clauses are often included, they are generally unenforceable in … In such cases, the award of punitive damages sends a clear message that the wrongdoer’s conduct is unacceptable and will not be tolerated. This rule is, however, often departed from.” per Denning LJ in Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd.1[1952] 2 QB 246. Here are 5 trusted lawyers you can contact directly for a quote. Late in performing his or her duty as stated in the contract or not performing the contractual obligation within a reasonable time; 4. Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk. Punitive Damages in Singapore Contract Law, Specific Performance: Obtaining this Equitable Remedy in Singapore, Your Guide to Non-Disclosure Agreements in Singapore, Your Guide to Employment Agreements in Singapore, Your Guide to Tenancy Agreements in Singapore, Your Guide to Shareholder Agreements in Singapore, Your Guide to Partnership Agreements in Singapore, Your Guide to Distributor Agreements in Singapore, Your Guide to Consultancy Agreements in Singapore, Your Guide to Freelance Service Agreements in Singapore, Your Guide to Service Agreements in Singapore, Your Guide to Business Referral Agreements in Singapore, Requisite elements in the formation of a contract. The general aim of awarding damages for breaches of contract is to compensate the aggrieved party for losses suffered due to the other party’s breach of the contract between them. As an example, if a contract were signed in which Party A agreed to pay Party B $5,000 for consulting services, but Party A breached the contractby not then using the services and not … punitive damages (or exemplary damages), for failing to perform its contractual obligations. Very responsive and efficient service with clear instructions, samples of what to do…, The IRB Firm and Mohammed Baiross have been instrumental in helping me to resolve a claim with a large transportation…. Here are 5 trusted lawyers you can contact directly for a quote. The principal remedy for breach of contract is monetary compensation, also known as, A breach of contract may entitle the innocent party to. You can read more about implied terms here. When the contract is breached, the court’s role is to ensure that the aggrieved party is compensated for the losses it has suffered as a result of the breach. You should obtain specific legal advice from a lawyer before taking any legal action. [29] Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and Another, [2008] 2 SLR 623, [2008] SGCA 8 at [27], citing McGregor on Damages, 17th ed (Sweet & Maxwell: 2003) at para 8-001. What are Warranties, Conditions and Innominate Terms? Entire Agreement Clauses in Singapore: What are They and What Do They Do? You should obtain specific legal advice from a lawyer before taking any legal action. Contract Damages. Even if there were such a “gap”, there are a number of alternative remedies, which have incidental punitive or deterrent effects, for the court to use. Many templates from civil law jurisdictions address damages in the event of breach. Preventing oneself from fulfilling a contractual obligation. Compensatory damages are monetary damages that are awarded with the intent of compensating the non-breaching party for any losses suffered as a result of a contract breach. Tham, Chee Ho. 19.11.1 The normal remedy for breach of contract is damages: monetary compensation to place the plaintiff in a position as if the contract had been performed. 1 However, there are controversial exceptions to this general rule. Entire Agreement Clauses in Singapore: What are They and What Do They Do? Punitive damages are amounts of damages which go beyond what is necessary to compensate the aggrieved party for its losses. The law provides an innocent party with four remedies for breach of contract: There are several avenues for resolution of a breach of contract dispute: If there are any doubts, you should consult a lawyer for specific advice on (1) the likelihood of success of your claim for breach of contract, and (2) the most ideal way of resolving the dispute. Court-implied terms refer to terms that are “read” into the contract by the Court to fill a gap in the contract. First, even when a defendant’s breach of contract is only one of two equally operative and efficacious causes of the plaintiff’s contractual breach, the defendant will be liable for the entirety of the damages claimed by the plaintiff. [28] Ralph Cunnington, “The Assessment of Gain-Based Damages for Breach of Contract” (2008) 71:4 Mod L Rev 559 at 562-563 [Cunnington]. A breach of contract happens when a party, without valid justification, fails to carry out his or her obligation as stated in the contract. The information provided does not constitute legal advice. The innocent party must, however, take reasonable steps to minimise his losses. This makes it difficult to determine to lay down specific and workable criteria on when a contracting party’s conduct will have exceeded acceptable “self or vested interest” (which underlies most contractual activity) to become “outrageous”. I was…. Singapore: Business Law (Part 2): Law of Contract 5 (b) In Ong & Ong Pte Ltd v Fairview Developments Pte Ltd, in considering the appellant’s argument that a fundamental change in the circumstances freed it from the contract, the Court of Appeal The Singapore court has not set out any definitive criteria on what it may consider to be a “truly exceptional case” for which punitive damages could be awarded for breach of contract. As European corporate clients from civil law jurisdictions expand their businesses and enter into common law jurisdictions such as Singapore, their template contracts most likely need adjustment. Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. However, the court was also careful to add that it might award punitive damages in a “truly exceptional case” involving a “particularly outrageous type of breach”. Offer was made, and Acceptance of the offer was conveyed (both can be done … However, if you are a party to an action for breach of contract, you may be wondering how willing the Singapore court will be to award damages to punish the party in breach, i.e. All parties have the capacity to contract (this means that they are not minors, and have no mental impairments) 2. 2004. Implied Terms: Filling in "Gaps" in a Contract, Using Force Majeure/Frustration to Escape Contracts in Singapore, Punitive Damages in Singapore Contract Law, Contracting via Electronic Communications, Assignment and Novation: Transferring Contracts in Singapore, 7 Issues to Consider Before Being a Loan Guarantor in Singapore, Calls on Performance Bonds in Construction Disputes: What to Do. Use of this site constitutes acceptance of our Terms of Service and Privacy Policy. Such excuse must be provided for either in the contract, or by law. However, in exceptional circumstances, the court may in its discretion order the defendant to account for the profits made from the breach of contract (A-G v Blake [2001] 1 AC 268; Teh Guek Ngor Engelin v Chia Ee Lin Evelyn [2005] 3 SLR(R) 22 ). Before determining if there has been breach of contract, one must first know what the express term required the defaulting party to do or not do. This means that compliance with the obligations created by such agreements is enforceable by law. Wrotham Park damages, which are awarded based on a reasonable sum that would be demanded by a claimant as quid pro quofor releasing a defendant from a burdensome covenant, may perhaps be know… According to Singapore law, if one party to a contract does not perform his or her obligations under a contract, the other party may file a civil suit to sue for damages for breach of contract. This is something that should not be taken lightly especially if you are the victim of the breach of contract. The Plaintiff in this matter was successfully represented by Tan Chuan Thye S.C., Avinash Pradhan and Alyssa Leong of Rajah & Tann Singapore LLP.
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