Singapore Business Law
(a) Describe two (2) scenarios in which a restraint of trade clause would typically be used. (6 marks)
(b) Assume your employer wanted to include a restraint of trade clause in your employment agreement. Prepare and set out an example of this clause that would be applicable to you in your job, taking into account the organisation that you work for and its industry. Would this clause be valid or invalid? Identify two (2) supporting reasons and explain them. (9 marks)
A team of students from a Singapore-based university was planning a trip to Cameron Highlands, where an exhibition on the history of tea, the process of growing, harvesting and processing tea and the spread of tea across the continents was to be held in a newly built 36,000 square kilometres exhibition hall. This exhibition was marketed as “one of the largest tea exhibitions in the history of Asia”. The students were writing a thesis on the history of tea leaves and thought that this exhibition would provide them with much background information. The university booked a 50-seater coach from Speedy Coach, at a price of S$1,000 for a return trip. It paid a deposit of S$200 to Speedy Coach three days before departure date.
Advise the university of its rights and obligations vis-à-vis Speedy Coach (if any) in each of the following scenarios:
(a) Scenario 1 – There was heavy monsoon rain in Malaysia and there were extensive mudslides along parts of the road up to Cameron Highlands. The road was no longer accessible. Speedy Coach refused to proceed with the coach journey on the departure date.
(b) Scenario 2 – The electrical wiring and ventilation system of the exhibition hall at Cameron Highland became faulty. With no lights and air-conditioning, the organizers put out a notice to the public, stating that “the exhibition will be temporarily closed for the next few weeks”. The organizers offered a walking tour of the town square, a tea museum and the surrounding tea plantations as an alternative.
Question 3 Sonata Gallery was an art dealer in London, Paris, Hong Kong and Brussels. On 1 December, it formally appointed Mark Lewis as its agent in Singapore to source for Chinese paintings by Singapore artists. On 15 January, Red Stars, an art gallery in Singapore, emailed Sonata Gallery and said that they had been approached by Mark. Red Stars wanted to verify the identity of Mark and confirm that he was indeed acting for Sonata Gallery. Within a few days, Sonata Gallery had issued a letter to Red Stars, stating “Mark Lewis is our duly authorized and appointed agent to source for all types of paintings.” On 7 February , Mark, purporting to act on behalf of Sonata Gallery, contracted with Red Stars to purchase a painting by a 19th century European painter, for S$500,000. On the same day, Mark then visited HoitToit Gallery and contracted to sell this 19th century European painting to them for S$750,000. He did not mention that he was an agent of Sonata Gallery. Instead, he gave them his personal bank account and told them that the sales proceeds could be banked directly into his personal bank account. On 1 March, Red Stars heard about the sale to HoitToit Gallery and called Sonata Gallery. During the call, Red Stars informed Sonata Gallery that they intend to withdraw from the contract. On 4 March, Sonata Gallery purports to ratify Mark’s actions on 7 February at Red Star and HoitToit Gallery by issuing a letter to these two galleries confirming the ratification. Advise Sonata Gallery and Red Stars Gallery on their respective rights and obligations.