Business Law

Topics: Liquidated damages, Breach of contract, Contract law Pages: 3 (1049 words) Published: February 27, 2013
Tutorial 8

1.The contract provides that for every day of delay in completion of a commercial building, damages of $1000 are payable. The completion is delayed by 20 days due to the fault of the contractor. How much can the innocent party claim if the actual loss suffered is $22,000? Do you think generally, it is wise for a business to always have a liquidated damages clause?

2.At Your Service Pte Ltd is a big company which provides various travel related services, including overseas tour packages which are designed in-house. Tom, a customer, had booked a special in-house tour for 2 to Bali. Tom had booked the tour as he wanted to go to Bali for his honeymoon. However, subsequently Tom cancelled the booking as he broke up with his fiancée. Tom had paid the sum in full as per the contract. However, the contract also provides that, if a cancellation is received 1 month before departure, 20% of the sum would be forfeited, if a cancellation is received 2 weeks before departure, 50% of the sum would be forfeited, if a cancellation is received 1 week before departure, 75% of the sum would be forfeited and if a cancellation is received at any time less than a week before departure, 100% of the sum would be forfeited. Tom cancelled the booking 3 days before departure. Tom nonetheless wants the full sum he paid returned, on the ground that he has not used any of the services. (Exam 09)

3. Perfect Timing Pte Ltd agreed to sell a machine to Sosway Pte Ltd at $20000. Delivery was to be on the 1st. However, when the 1st came, Perfect Timing Pte Ltd did not supply the machine to Sosway Pte Ltd and repudiated the contract due to various problems on its end. Sway Pte Ltd had wanted to use the machine for the production process. Thus far it had been using another machine for the production process, but on the eve of the 31st (the day before the delivery of the new machine), the old machine was sold and delivered to a third party. As a result Sosway Pte Ltd’s...
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