Lesson 6

Question 1

What are damages in the context of contract law?

Answer 1

Damages are monetary compensation awarded to the injured party due to a breach of contract.

Question 2

What must be proven when claiming damages?

Answer 2

Any loss claimed must be substantiated with evidence.

Question 3

Can an injured party claim more than the actual loss sustained?

Answer 3

No, the injured party cannot claim more than the actual loss sustained.

Question 4

What are liquidated damages?

Answer 4

Liquidated damages are pre-agreed amounts for losses anticipated in the event of a breach.

Question 5

What are unliquidated damages?

Answer 5

Unliquidated damages are not pre-agreed and are determined by the court based on the circumstances.

Question 6

What is specific performance?

Answer 6

Specific performance is a court order requiring a party to fulfill their obligations under a contract.

Question 7

When is specific performance typically awarded?

Answer 7

It is usually awarded in cases where monetary compensation would be inadequate or inappropriate.

Question 8

What is an injunction?

Answer 8

An injunction is a court order that compels a party to stop a specific act.

Question 9

What does rescission mean in contract law?

Answer 9

Rescission is the unmaking of a contract, allowing the innocent party the choice to end the contract due to a vitiating factor.

Question 10

What options does the innocent party have in terms of rescission?

Answer 10

They can choose to rescind the contract and claim damages for loss or affirm (carry on with) the contract.

Question 11

What is the law of restitution?

Answer 11

Restitution deals with restoring something, typically money or property, to its rightful owner or providing compensation for unjust enrichment.

Question 12

What principle underlies the law of restitution?

Answer 12

The principle is to restore the parties to their pre-contractual status.

Question 13

What is rectification in contract law?

Answer 13

Rectification is a remedy where a court orders a change to correct a mistake in a written document to reflect the true intention of the parties.

Question 14

What does the law say about contracts for real estate?

Answer 14

Contracts for the sale or transfer of real estate or any interest in it must be documented in writing.

Question 15

What does the law specify about lease terms?

Answer 15

A lease with a term that goes beyond 7 years must be officially registered.

Question 16

What does the Conveyancing & Law of Property Act require for contracts involving the sale of land and leases?

Answer 16

Contracts for the sale of land and leases of 7 years and more must be made by deed.

Question 17

What is an Option to Purchase?

Answer 17

An Option to Purchase is a grant by the property owner to the purchaser, giving the purchaser the right to buy the property under specified conditions.

Question 18

What type of rights does an OTP provide?

Answer 18

An OTP provides irrevocable rights granted by the property owner to the purchaser.

Question 19

What is the maximum option fee for HDB resale flats?

Answer 19

The maximum option fee for HDB resale flats is $1,000.

Question 20

What is the usual percentage for option fees for private residential, commercial, or industrial properties?

Answer 20

The usual option fee is typically 1% of the property’s price.

Question 21

How does a purchaser exercise the OTP?

Answer 21

The purchaser exercises the OTP by signing the acceptance portion and paying the option exercise fee.

Question 22

What is the maximum option exercise fee for HDB resale flats?

Answer 22

The maximum option exercise fee for HDB resale flats is $4,000.

Question 23

What are the option exercise fees for private residential and commercial or industrial properties?

Answer 23

The fee is typically 4% for private residential properties and 9% for commercial or industrial properties.

Question 24

What is the usual option period for resale properties?

Answer 24

The usual option period is 14 days, except for HDB resale flats and uncompleted units from developers, which is 21 days.

Question 25

What happens if the option expires without being exercised?

Answer 25

If the option expires, the seller is entitled to forfeit the option money and may sell the property to another buyer.

Question 26

What is a Sales & Purchase Agreement (S&P)?

Answer 26

A Sales & Purchase Agreement is a legally binding contract between a seller and a purchaser regarding the sale of a property.

Question 27

What does consideration typically represent in a Sales & Purchase Agreement?

Answer 27

Consideration in a Sales & Purchase Agreement usually refers to the deposit paid by the purchaser.

Question 28

What rights and obligations does an S&P agreement create for the seller and purchaser?

Answer 28

The S&P creates irrevocable rights and obligations for both the seller and the purchaser.

Question 29

What are the legal consequences of a breach of contract in an S&P?

Answer 29

Breach of contract can lead to legal remedies, such as seeking damages or enforcing the agreement in court.

Question 30

When is an S&P commonly used?

Answer 30

An S&P is commonly used in purchasing properties under construction from licensed developers.

Question 31

What is the format of an S&P typically based on?

Answer 31

The S&P is based on a standardized format prescribed by the relevant authority.

Question 32

What rights does the purchaser have under Condition 3 - Documents of Title regarding documents?

Answer 32

The purchaser has the right to inspect the title deed and must be shown the document not later than one month before the Scheduled Completion Date.

Question 33

What occurs under Condition 4 if there is a dishonored payment?

Answer 33

The vendor has the right to treat the contract as repudiated by the purchaser or to affirm the contract as per the terms and conditions.

Question 34

What must the vendor deliver according to Condition 5?

Answer 34

The vendor must deliver the property in the same state and condition as at the date of option or the date of the contract, and remove all movable property upon completion if it is a sale with vacant possession.

Question 35

Who is entitled to outgoings, rents, and profits before and after the completion date as stated in Condition 6?

Answer 35

The vendor is entitled to rent and profits before the completion date; the purchaser is entitled after the completion date.

Question 36

What does Condition 8 specify about the state of the property?

Answer 36

Condition 8 states that the purchaser is deemed to have notice of the actual state and condition of the property regarding access, repair, and other related factors.

Question 37

What happens if the purchaser delays the completion of the sale?

Answer 37

The purchaser must pay interest as liquidated damages starting the day after the Scheduled Completion Date, up to and including the Completion Date.

Question 38

How is the late completion interest for purchasers calculated?

Answer 38

Interest is calculated on the purchase price (less any deposit and sums paid to account) at a rate of 8% per annum.

Question 39

What happens if the vendor delays the completion of the sale?

Answer 39

The vendor must pay interest as liquidated damages starting the day after the Scheduled Completion Date up to and including the Completion Date.

Question 40

How is the late completion interest for vendors calculated?

Answer 40

Interest is calculated on the purchase price at a rate of 8% per annum.

Question 41

What occurs if the vendor delivers vacant possession before the Completion Date?

Answer 41

If the vendor has delivered vacant possession and no rent is payable by the purchaser, the interest payable to the purchaser will be reduced by a sum equivalent to notional rent.

Question 42

Under what condition does the vendor make a representation regarding transactions at an undervalue?

Answer 42

The vendor must warrant that if the property was involved in a transaction at undervalue, either 3 years must have passed or 5 years must have passed depending on certain conditions outlined in the Insolvency, Restructuring and Dissolution Act 2018.

Question 43

What does a Notice to Complete signify?

Answer 43

It is a written notice requiring completion of the property transaction in accordance with the contract.

Question 44

How long do parties have to complete the transaction after receiving a Notice to Complete?

Answer 44

Parties must complete the transaction within twenty-one (21) days after the day of service of the notice.

Question 45

Do parties retain any rights after a Notice to Complete is served?

Answer 45

Yes, both parties retain any intermediate right of rescission, regardless of the specified completion period.

Question 46

What must the Purchaser do if they do not comply with the Notice to Complete on expiry?

Answer 46

The Purchaser must:
Return all title deeds and documents belonging to the Vendor.
Procure the cancellation of any entry related to the contract in any register at their own expense.
The Vendor may forfeit and keep any deposit paid by the Purchaser and resell the property.

Question 47

What options does the Purchaser have if the Vendor fails to comply with the Notice to Complete?

Answer 47

The Purchaser may choose: a) To enforce against the Vendor the rights and remedies available at law or in equity without further notice. b) To give written notice to the Vendor demanding the immediate repayment of the deposit and any money paid on account of the purchase price.

Question 48

What happens after the Vendor complies with the written notice to repay the Purchaser?

Answer 48

The Purchaser will no longer be entitled to any right to specific performance of the contract, must return all title deeds and documents, and must procure the cancellation of any contract-related entries in the register at the Vendor’s expense.