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Singapore is internationally renowned for its modern business environment and status as a financial hub. Much of Singapore’s success comes from its strong legal framework with effective laws and fair courts. Within this framework, having robust contracts is essential for your business to succeed.
The importance of contracts should never be underestimated. They benefit both parties by ensuring that all of their dealings are legally protected. This allows businesses to run smoothly and efficiently and safeguards your finances and commercial interests.
For contracts to be effective and legally binding, they must comply with all of the requirements of Singapore law. If any part of the contract does not meet these requirements, the entire contract could be voided. Such problems may lead to delays in establishing your business, ongoing and future business dealings and even potential legal proceedings.
At I.R.B. Law, we understand that dealing with the intricacies of drafting contracts and navigating the web of local legislation is difficult for local small businesses and foreign companies alike, especially because much of contract law consists of unwritten rules that are subject to change over time.
Our experienced team of contract and commercial lawyers are well-versed in all aspects of Singapore contract law and ideally placed to assist you with all of your commercial and contract needs. Drawing on our extensive experience with clients from a range of industries, we are ready and willing to assist you in drafting and vetting your contracts so that it fully complies with local laws, is legally binding and avoids any possible loopholes.
At I.R.B Law, our Singapore Corporate Lawyers offer a suite of commercial and corporate law services to suit your needs, including:
- drafting agreements;
- reviewing, vetting, and amending existing agreement;
- advising on terms for an existing agreement;
- advising on contractual disputes.
Experience in Contracts and Commercial Law
Specialists in Drafting and Vetting Contracts
Outstanding track record of Success
Personalised Care and Attention
A contract comprises a legally-binding agreement between two or more parties. Contracts are made up of terms – such as prices, descriptions of goods and services, and promises to perform particular duties, which state the rights and obligations of these parties.
The rules which govern contracts in Singapore are numerous. The main rules are as follows:
- For a contract to be valid, it must usually contain the following elements: offer, acceptance, consideration (a reciprocal exchange), and intention to create legal relations. The terms of the contract must also be certain and complete, and the contract should have been entered into with the consent of both parties, rather than as a result of threats or undue influence.
- Additionally, minors (defined as persons under the age of 18) are not usually bound by contracts, though there are exceptions to this rule, such as when the minor is provided with necessaries or legal advice, or when a service contract is largely for the minor’s benefit. Anyone who is of unsound mind or is intoxicated at the time of the signing also cannot be legally bound by the contract. However, contracts with other companies are always enforceable as companies have capacity to be a party to a contract
- It is a common misconception that a contract must be in writing or that the terms of the contract are always limited to what is contained within the written document. If you are uncertain about the terms of your contract, please consult with a lawyer who would be able to advise you on your rights and liabilities.
If any of these requirements are not met, then the contract may not be upheld by the Court.
A breach of contract occurs when one of the parties (the ‘defaulting party’) to a contract fails or refuses to perform an obligation within the contract and does not have a valid excuse. Late, incomplete or defective performance can also be considered to be in breach of contract. However, it is not necessary to prove that the party in default intended to breach the contract.
When a breach of contract takes place, the innocent party has a number of available remedies.
The main remedy available to them are to seek damages – money compensation that the defaulting party must pay to the innocent party to cover the innocent party’s losses resulting from the breach. Every breach of contract makes the defaulting party liable to pay damages. However, the innocent party must take reasonable steps to reduce its loss.
Depending on the type of obligation, the defaulting party’s breach may also entitle the innocent party to terminate the contract. If the innocent party decides to terminate the contract, both parties are released from their obligations under the contract.
Under certain circumstances where damages are inappropriate and the Court considers it fair, the innocent party may be able to claim an order of specific performance. This order compels the defaulting party to perform its obligation under the contract. Orders of specific performance are more commonly granted when the contract in question is for sale of land.
Lastly, an injunction may be ordered to ensure that the defaulting party fulfils its obligation not to do something. As with orders of specific performance, injunctions are only available when the court considers it fair and appropriate, and when damages are not an appropriate remedy.
Usually, when a person signs a written contract, he or she is bound by its terms and if he or she refuses to perform them, will be in breach of contract.
However, there are several circumstances in which one party can avoid its obligations under a contract or even have the contract set aside completely. To prevent this from happening, it is important that your contract is drafted carefully with legal advice from a qualified legal practitioner.
In some cases, one party may take advantage of ambiguity in the wording of the contract to claim that a certain obligation was different from the one agreed to by the parties. In other cases, certain terms that were agreed to and included in a contract may not, in fact, be legally enforceable. This means that neither of the parties is bound by such a term. One example of the latter is excluding liability for causing death by negligence, which is always unenforceable based on the Unfair Contract Terms Act.
Additionally, a contract can be set aside if there was a serious mistake when the contract was formed, meaning that the parties did not reach an agreement; if it was formed based on fraud or misrepresentation, threats, undue influence, or unconscionability (extreme unfairness); or if the contract was formed to fulfil an illegal purpose.
What we can do to help
Safeguarding your Interests to Protect your Business
Our team of experienced contract lawyers has the expertise to draft and review contracts for commercial, corporate and compliance purposes to ensure that your interests are fully protected and your intentions are accurately conveyed. We ensure that your contracts are in line with the various laws and legislation that govern the enforcement of contracts, including:
- The Sale of Goods Act
- The Unfair Contract Terms Act
- The Parol Evidence Rule
- The Electronic Transactions Act
Although Singapore offers a business-friendly environment, disagreements are still possible. Our legal team will help protect your interest by ensuring the validity and clarity of your contracts at the drafting stage. To remove the risk of any future disputes, our lawyers will also assist you by reviewing your existing contracts and providing professional advice on how to improve them.
We will ensure that the business is legal, that payment is made, and goods and services are received at the expected standard. In the case when the other party fails to fulfil the obligations stated in the contract, our lawyers will assist you in recovering what you are legally owed and claiming damages by suing the other party.
I.R.B. Law is recognised as a team of leading Singapore contract lawyers with a track record of trustworthiness and reliability in contract matters. Our lawyers have over a century of a combined experience as solicitors and are ready to assist you with your contract matter.
We firmly believe that everyone should be entitled to a legal advice and guidance. Should you be in a position where you may need our assistance, please do not hesitate to contact us.