Contract and Agency Law

Question: Discuss about the Contract and Agency Law. Answer: Introduction: Business law is the framework of those laws that regulate the business and commercial activities. The laws of business have some major functions and these are creating benchmark, preserving order, solving arguments and safeguarding freedom and rights. The main function of any law is protection of the interests of the masses. Other important functions of law include the following, peacekeeping; keeping check on the exercise of power by government and promotion of personal freedom; promoting social justice; protecting the environment; promoting economic growth through free competition. The functions of law impart us with regulations and guidelines for the things or circumstances which can take form in future. In Singapore, business laws also follow these key functions. This is done through various acts and legislations applicable on a business carrying commercial activity in the country. To regulate commercial business law in Singapore, various legislations have to be followed which include the Singapore Company Law, the Law of Contract, Competition Law, the Law of Negligence, the Law of Guarantees, Economic Torts, Forms of Business organizations among the others. To better understand the applicability of these key functions an example has been taken. Companies carrying business in Singapore have to follow the Companies Act for various functioning of a company. This act contains provisions from the incorporation to the dissolution of a company. Section 3 of this act contains provisions of separation in the ownership and management, the statutory duties of a director, responsibility to behave in the best interests of company, responsibility to evade conflict of interest, responsibility to act for genuine purposes and effects of breach of fiduciary duties. Taking a closer look at this section clarifies that these have been drawn keeping in mind the basic principles of business law specially the principle of protection of interests of the company. By defining duties of directors, a check on power of directors can be carried. In any agreement, arbitration is a crucial clause for dispute redressal. An arbitration clause should be clearly and carefully drafted. To reduce the risks of dispute between the parties, certain key elements should be included in an arbitration clause of the agreement. This clause should clearly state the governing law which will be applicable in matter of a dispute. This clause should also define the governing law of arbitration that will be applicable. In case a previous dispute has been present in the past and otherwise, the clause should cover the scope of dispute. In other words, the clause should state all past disputes and possible disputes which may arise in future. The clause should also include how or who will appoint an arbitrator or the clause may state the name of arbitrator. The number of arbitrators should also be clearly stated in the clause as it varies from case to case. An example of arbitration clause in case of pre-existing dispute is given below: Any falling out or claim resulting out of or connection to this contract, or the violation thereof, has to be solved by arbitration regulated by the Singapore International Arbitration Centre as per its Arbitration Rules of the Singapore International Arbitration Centre. The number of arbitrators shall be three. The place of the arbitration shall be Singapore. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The language of the arbitration shall be English. This contract is governed by the laws of Singapore Companies Act. A successful case of arbitration can be seen in the case of Yahoo Inc. v. Microsoft Corporation, No. 13 CV 7237 (PART I) (S.D.N.Y. Oct. 21, 2013). As per the definition of a contract, it can be oral or written. Even though it is preferred to have a written contract but an oral contract is also acceptable. But even in the oral agreements, consensus ad idem has to be present. The main elements of any contract are offer, acceptance, consideration and intention. In the given case, Ken had applied for a position as a driver. Lina, the HR, had laid down the terms of employment, on behalf of the company. After the interview was over, an offer for the position of driver was made to Ken and he had accepted the offer. The pre contractual statements made by the HR contained the terms of employment. This included the working hours of the company (from 9 AM to 5 PM). An assurance about the working days being Monday to Friday was given and also about weekends being off. The statement also included a work uniform to be worn by the driver. HR had also stated that being a new company, not many orders would have to be delivered. These pre contractual statements were made to induce Ken to enter into the contract of employment. These pre contractual statements of the HR are in the nature of misrepresentation which form a part of Vitiating factors. Vitiating factors of misrepresentative nature are voidable. The HR cannot assure whether the flow of work would be less or more. The misrepresentation here is of the fact. Taking inference from the case of Bisset v Wikinson (1972) , the HR cannot know about the flow of work as the company was new. Also, she stated the working hours as the usual and that there would be no need to work on weekdays. These statements have been made vaguely, and these may be false. Here, she failed to cross check whether these were the working hours of the company. So a misrepresentation by the virtue of failure in verification occurred. The most important part of misrepresentation here was inducement. All these statements were made to induce the driver in accepting the job offer. Ken had relied on these statements and hence the contract is voidable at the instance of Ken (driver). The statements about the remuneration package and the dress code would form part of the employment contract. If HR could prove that she knew that the working hours mentioned by her were the actual working hours of the company, even those would be covered in an employment contract and would be considered valid. References Mallor, J., Barnes, A.J., Bowers, L.T. and Langvardt, A., Business Law: The Ethical, Global, and E-commerce Environment, 14th edn, McGraw Hill, Boston, 2010. Mulcahy, L., Contract Law in Perspective, 5th edn, Routledge-Cavendish, London, 2008 Law 360, Microsoft Case Is Great Example of Emergency Arbitration, New York, December 13 2016, https://www.law360.com/articles/495144/microsoft-case-is-great-example-of-emergency-arbitration (accessed on 24 August 2016) London, A., Anatomy of an arbitration Part II: Key elements of an arbitration clause, Ashurst, https://www.ashurst.com/doc.aspx?id_Content=9363, July 2013, (accessed on 24 August 2016) Singapore Law, Commercial Law, https://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law, 2016, (accessed on 24 August 2016) Singapore Law, The Law of Contract, https://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-8, 2016, (accessed on 24 August 2016)