Business Law
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Why is law important and what are the different classifications of law?
Private law is called power-conferring rule and it applies to individuals living with the society. Examples of private law include – contract, law of tort, family law and property law. If this law is breached, the person affected can seek redress in a court of law. The court of law will decide the case before them based on the common law and or statutes.
Which is more important: common law or legislation?
There are many sources of law, however the two most important sources are common law and legislation. The common law consists of customs and case laws. Over a period of time, the customs of one particular society might become part of the law of that particular society. The judges in a court decide case laws. The judges are bound by what is known as Stare Decisis. This means that the decision made in a higher court will be binding on all lower courts.
Stare Decisis is important as it allows for a uniform development of law. Judges by following Stare Decisis ensures that the decision is certain and the punishment or judgment given is consistent with previously similar situations.
Compared to legislation- the common law is less important. Legislation is also called act of parliament or statutes. They take precedents over other form of law except the constitution. Unlike common law, which is based on customs and case laws, legislation goes through a rigorous process in parliament before it is implemented. As such it is much more certain and clearer to common law. If there is a conflict between common law and legislation the legislation will prevail.
How would you differentiate a mere agreement from a contract ?
The general rule is that all contracts are agreements but not all agreements are contracts. An agreement can be either legal or non legal. Only legal agreements can be considered to be contractual. The important thing to realize is that a contractual agreement is one whereby both parties have wheat is known as consensus ad idem. This means that both parties have a meeting of minds to enter into a legal relationship. An example of a mere agreement would be when Peter agrees with John to watch a movie. If peter does not turn up at the cinema there is nothing that john can do. However, if peter agrees to sell his pet poodle to john for $100 and john agrees to buy the poodle for $100 then there is a legal agreement. If subsequently peter sold the poodle to Jane for $200, john can sue peter for doing this. Usually social/domestic agreements like hose made between friends, relatives and family members are considered to be mere agreements and therefore not legally enforceable. However, commercial and business transactions that are made can be considered legally binding in nature if they satisfy the 5 basic elements of contract which are :offer, acceptance, intention to create legal relations, consideration and capacity to contract.
What is an innominate term?
This is a term, which cannot be classified as a condition or a warranty from the outset. It depends on how important the term is to the party concerned. For example, if a tourist from china were to come to Singapore to buy a color TV and asks the salesman that he wants a TV that can work in china and the TV which he purchases should have a condition that it should work in china. I he brings the TV back to china and it does not work- he could sue for a breach of condition as it was important that the TV works in china. However, if a Singaporean buys the same TV as long as it works in Singapore he is satisfied. If it does not work in china, he cannot sue, as this is merely a breach of warranty from him unless he specifically requested this as a condition when he purchased the TV. The consequences of a breach of innominate term depends on whether the injured party has been substantially deprived of his contractual benefits which it was intended by the parties that he should obtain from the contract.
Why is an exclusion clause important in a contract?
For exemption clause to be valid it must be made