law contract
Sample Contract Exercise
Contracts are the bloodline of business. Thus it is absolutely crucial that you understand what you are or your business is signing. We have looked at some common clauses found in contracts like restraint of trade clauses, exclusion clauses and liquidated damages clauses. In addition to these, there are many other common clauses and the purpose of this exercise is to highlight these clauses as well. If you do a simple search in the Internet you will realize that many of the clauses we are talking about are indeed very common (and pretty international as well).
Spend some time reading the contract (Appendix A, Introduction to Business Law in Singapore) and try to understand it. This is a very very important exercise in preparing you for the future. So take it seriously. Following that, answer the questions that follow:
1. Is clause 6 definitively valid? What does validity depend on?
2. Why is clause 7 important? Can the price be increased by 100%?
3. Is clause 10 definitely valid?
4. Why have clauses such as 11b? Isn’t there an implied term to that effect?
5. How is clause 13 different from a liquidated damages clause? If there is some breach not covered by clause 13, does it mean the innocent party cannot sue?
6. Is clause 14, definitely valid?
7. Under clause 15a, must the principal have a valid reason for terminating by notice? Can the distributor terminate the contract by giving notice?
8. What is the importance of clause 15(b)i?
9. What is the purpose of clause 15(b)ii?
10. What is the purpose of clause 16?
11. What is the purpose of clause 17?
12. Clause 18 is very common clause. What is the purpose? To give an example: Contract of tenancy states that rent is to be paid latest by the 14th of each month, failing which the landlord can terminate the lease. Tenant is always late in paying rent (ie after the 14th) – but eventually does pay. As the rent is good and landlord is busy – he does not
Contracts are the bloodline of business. Thus it is absolutely crucial that you understand what you are or your business is signing. We have looked at some common clauses found in contracts like restraint of trade clauses, exclusion clauses and liquidated damages clauses. In addition to these, there are many other common clauses and the purpose of this exercise is to highlight these clauses as well. If you do a simple search in the Internet you will realize that many of the clauses we are talking about are indeed very common (and pretty international as well).
Spend some time reading the contract (Appendix A, Introduction to Business Law in Singapore) and try to understand it. This is a very very important exercise in preparing you for the future. So take it seriously. Following that, answer the questions that follow:
1. Is clause 6 definitively valid? What does validity depend on?
2. Why is clause 7 important? Can the price be increased by 100%?
3. Is clause 10 definitely valid?
4. Why have clauses such as 11b? Isn’t there an implied term to that effect?
5. How is clause 13 different from a liquidated damages clause? If there is some breach not covered by clause 13, does it mean the innocent party cannot sue?
6. Is clause 14, definitely valid?
7. Under clause 15a, must the principal have a valid reason for terminating by notice? Can the distributor terminate the contract by giving notice?
8. What is the importance of clause 15(b)i?
9. What is the purpose of clause 15(b)ii?
10. What is the purpose of clause 16?
11. What is the purpose of clause 17?
12. Clause 18 is very common clause. What is the purpose? To give an example: Contract of tenancy states that rent is to be paid latest by the 14th of each month, failing which the landlord can terminate the lease. Tenant is always late in paying rent (ie after the 14th) – but eventually does pay. As the rent is good and landlord is busy – he does not