contract assignment singapore

Straits Times Index

Bitcoin usd, cmc crypto 200, s&p 500, ftse bursa malaysia, jakarta composite index, assignment and novation: how to transfer a contract in singapore.

There are 2 methods of transferring a contract in Singapore. If you want to transfer just the rights under the contract, you can perform an assignment of the contract. On the other hand, if you want to transfer both the rights and obligations under the contract, you can perform a novation of…

The post Assignment and Novation: How to Transfer a Contract in Singapore appeared first on SingaporeLegalAdvice.com .

There are 2 methods of transferring a contract in Singapore.

If you want to transfer just the rights under the contract, you can perform an assignment of the contract.

On the other hand, if you want to transfer both the rights and obligations under the contract, you can perform a novation of the contract.

Assignment: Transferring Only Your Rights Under the Contract to a Third-Party

If you wish to transfer just the rights (i.e. benefits) of your contract to another person, an assignment is the appropriate choice for you.

For example, you may want to assign the right to receive cash payouts from your life insurance or endowment plans to a loved one, for his/her benefit.

Since an assignment only transfers the rights under the contract, you will still retain your obligations under the contract .

Finally, your assignee (i.e. the person you’ve assigned the contract to) will not be a party to the contract. The contract will still be between you and the other original party to the contract.

Can your contract be assigned?

Contracts of a personal nature , such as employment contracts , cannot be assigned. This is because these contracts have been signed with parties specifically for certain exclusive qualities that these parties have. (For example, the parties’ skills or styles of performance.) The parties to these contracts therefore cannot be “replaced” so easily.

Commercial contracts may also contain a clause expressly excluding or limiting their assignment unless certain conditions have been fulfilled.

Here is a sample restriction of assignment clause:

“Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, to the benefit of and enforceable by the parties and their respective successors and assigns.”

When deciding whether to assign your contract, you should therefore check whether it contains any clauses providing for conditions on assignment.

Requirements for assignment

Once you have determined that your contract can be assigned, you can start to prepare for its assignment.

The requirements for assignment are:

The assignment has to be absolute. This means that it has to be unconditional;

The assignment cannot be by way of charge. The assignment cannot be made in return for security;

The rights to be assigned must be clearly identified ;

The assignment has to be in writing and signed by the assignor ;

The other party to the assigned contract is given clear and unambiguous notice of the assignment in writing. The notice can be given by either the assignor or the assignee. However, the notice must also be unconditional.

Contracts can be assigned without the consent of the other party to the contract.

If all the above requirements are met, the assignee will have the right to sue the other party to the contract for the benefits provided under it (if required).

If not all of the requirements have been met, the assignment will still be valid. However, the assignee will not be able to sue the other party to the contract directly.

Instead, he will have to join you (the assignor) as a party first. In other words, you will have to be a party to the action as well.

Novation: Transferring Both Your Rights and Obligations Under the Contract to a Third-Party

If you would like to transfer both the rights and obligations under a contract to another party, then a novation is the appropriate choice.

For example, when selling your business , you may wish to novate your existing contracts with your suppliers to the new business owner, so that any outstanding debts under these contracts will be transferred to him.

Since novation has the effect of transferring both your rights and obligations to a third-party, the previous contract will effectively be extinguished . A new contract is then formed between the other party to the previous contract, and the third-party.

Can your contract be novated?

Your contract may expressly exclude or limit the right to novate. You should therefore check whether it contains any clauses providing for conditions on novation before proceeding.

Here is a sample restriction of novation clause (which also happens to restrict assignment):

“A party must not assign or novate this agreement or otherwise deal with the benefit of it or a right under it, or purport to do so, without the prior written consent of each other party which consent may be withheld at the absolute discretion of the party from whom consent is sought.”

Requirements for novation

A novation can be executed formally by way of a written agreement or by deed.

A novation can also arise through the parties’ conduct. For example, sending a notice of novation to the other parties of the original contract can suffice.

In either situation however, consent of all parties to the original contract is required . The new contract must also meet all the legal requirements for contract formation .

If you require legal advice on assigning or novating a contract, and/or on drafting the necessary documents to execute an assignment or novation, you may get in touch with one of our corporate and commercial lawyers .

Latest stories

Why soaring numbers of migrants are risking death to flee xi’s dictatorship for us.

When the police came knocking on Wu Lixin’s door one day, he knew it was finally time to flee China.

Mid-air brawl: Passengers duke it out over seat dispute on flight to San Francisco

Tensions soared mid-air as two passengers engaged in a physical altercation over a disputed seat on an EVA Air flight from Taipei to San Francisco on May 7. The dramatic scene unfolded as cabin crew worked to diffuse the situation amidst screams from passenger witnesses.

Passenger Bus Crashes Into Saint Petersburg River

A bus crashed off a bridge and into the Moyka River in Saint Petersburg, Russia, on Friday, May 10, with local police saying around 20 people were on board.Local media reported that at least five people died, with four “seriously injured”. These figures had not been officially confirmed.The city’s governor, Alexander Beglov, said emergency services from various departments were on the scene.Local police said the circumstances that led to the bus being driven into the river were still being determined.This security footage shows the bus driving along the side of a building, swerving to hit a car, and then crashing into the river. Credit: Russian Ministry of Internal Affairs via Storyful

Experts Say These 6 Common Work Habits May Actually Be Signs Of ADHD In Adults

Don't ignore these common signs.

'Let her go! Let her go!' Fontana officer shoots armed man who put his partner in a headlock

Body-camera footage released by the Fontana Police Department shows an officer being put in a headlock during a traffic stop in Yucaipa by a man whom authorities have identified as Alan Metka.

We tried Singapore’s best-rated Wanton Mee

The post We tried Singapore’s best-rated Wanton Mee appeared first on SETHLUI.com.

The UN has betrayed Israel again

This has been another week of shame for the United Nations, which has again voted to reward terrorism and victim-blame Israel. The general assembly has voted overwhelmingly to back the Palestinian bid for full UN membership, a move that Israel’s envoy, Gilad Erdan, has warned will give “the rights of a state to an entity that is already partly controlled” by Hamas.

Ukrainian attacks on Russian oil refineries may be proving the Biden Administration wrong, experts say

Defense Secretary Lloyd Austin said in April that attacking Russian oil refineries risked impacting global energy markets.

Sorry Spurs fans, Arsenal winning title would be good for the Premier League – here is why

We know precisely how the last few days of this Premier League season will unfold. Arsenal will win their final two games, first at Old Trafford this weekend, then at home to Everton next Sunday. And they will do so with aplomb, securing six points with performances of gusto and intelligence. In other circumstances it would be a triumphant stroll to the club’s first title in 20 years, Mikel Arteta’s side issuing a glorious reminder of the days when Arsene Wenger was at his peak as a tactician an

An American soldier went missing in the Korean War. How his late mother’s faith he’d come home has finally been realized

A soldier who went missing during the Korean War has been identified after 70 years. It was the hope of his mother that he would come home again.

"Despite Being A Tourist Trap, It's The Most Beautiful Place I've Seen": Travelers Are Sharing Mega-Popular Destinations That Are Anything But Overrated

"The first time I visited, I thought, 'This can't be real. It looks like a stock image...'"

After Being Forbidden From Making Alterations, Here’s How Kendall Jenner Wound Up Being The 'First Human' Ever To Wear Her 25-Year-Old Met Gala Gown

“It’s been sleeping for the last 25 years. It’s literally a ‘sleeping beauty.’”

TikTok Star Maddy Baloy's Fiancé Held Her Hand as She Took Last Breath After Year with Terminal Cancer (Exclusive)

“We made the decision between us that we’re married for life,” Risher tells PEOPLE

Pregnant Hailey Bieber Shows off Baby Bump in New Behind-the-Scenes Pic from Pregnancy Announcement Video

Hailey and Justin Bieber announced on May 9 that they are expecting their first child together

The US Army's new plan to counter Russia and China has a glaring problem, experts say

The US Army is reorganizing to respond to rising threats, but standing up new units is easier said than done.

The ‘Fed Put’ Is Back, and That’s Great News for the Stock Market

What’s the Fed put? It’s when the Federal Reserve signals that it will reduce rates if the economy or financial markets fall apart. The concept originated in the 1980s and 1990s, when markets became conditioned to expect the Fed to step in during times of financial market stress—causing the stock market to rally.

Surveillance footage shows Boston cop and girlfriend Karen Read in bar hours before she allegedly murdered him

Karen Read is on trial charged with killing her boyfriend by allegedly intentionally mowing him down and leaving him to die during a snowstorm in January 2022

Hoe Nam Bak Kut Teh: Rich Claypot BKT with tender pork knuckle from famous prawn noodle franchise

The post Hoe Nam Bak Kut Teh: Rich Claypot BKT with tender pork knuckle from famous prawn noodle franchise appeared first on SETHLUI.com.

Zendaya’s Stylist Calls Out Designers Who Refused to Dress Her Back in the Day: ‘I Still Have All the Receipts'

Law Roach named "the big five" who previously said his client was "too green" to wear their designs

Cuppage Fried Guo Tiao remains open under new ownership after OG owner retires

The post Cuppage Fried Guo Tiao remains open under new ownership after OG owner retires appeared first on SETHLUI.com.

• Osome Blog Singapore

Contract Law in Singapore: Understanding Legal Agreements

Singapore's contract law is crucial, governing legal agreements to ensure they're valid and protective. This guide delves deep, from core components to handling breaches. Navigate your agreements with confidence and knowledge.

In Singapore, contract law plays a crucial role in ensuring that legal agreements are valid, enforceable, and protect the rights of all parties involved. Understanding the key elements of contract law is essential for individuals, businesses, and organisations operating within the city-state. For a more detailed understanding of the employment laws, check out the employment act .

In this article, we will delve into the various aspects of contract law in Singapore, examining its formation, enforceability, breach, and resolution.

Key Elements of a Contract Law in Singapore

A contract comprises several vital elements, with each playing a significant role in upholding its validity under Singaporean law. Before diving deep, let's explore the contract law basics in Singapore to provide a foundation for the upcoming detailed discussion.

Essential components for a valid and enforceable contract

When it comes to creating a contract that is both valid and enforceable, there are certain essential components that need to be considered. In addition to the key elements mentioned above, there are other factors that contribute to the validity and enforceability of a contract. Let's take a closer look at these components:

• Offer and acceptance — one of the fundamental requirements of a contract is the presence of a clear offer and an unambiguous acceptance of that offer. This means that both parties involved must clearly communicate their intentions and reach an agreement on the terms of the contract.
• Intention to create legal relations — for a contract to be considered valid, both parties should have a genuine intention to enter into a legally binding agreement. However, businesses must also consider other aspects like corporate secretarial services which play a role in contract formulation.
• Consideration — another crucial aspect of a valid contract is the presence of consideration. Consideration refers to the exchange of something of value between the parties involved. It can be in the form of money, goods, services, or even a promise to do or refrain from doing something. Without consideration, a contract may lack the necessary element of mutual obligation.
• Legal compliance — it goes without saying that a contract must not involve any illegal activities. It must comply with relevant laws and regulations in order to be considered valid and enforceable. This means that the terms and conditions of the contract should not violate any statutory provisions or public policy.
• Consent — last but not least, the parties entering into a contract should do so freely and willingly. Consent plays a vital role in ensuring the validity of a contract. It means that the parties must agree to the terms and conditions of the contract without any duress, undue influence, or coercion. Consent obtained through fraudulent means or misrepresentation can render a contract voidable.

These components are essential in creating a contract that not only meets the basic requirements but also stands up to legal scrutiny. It is important to carefully consider each of these elements when drafting a contract to ensure its validity and enforceability.

Remember, a well-drafted contract not only protects the rights and interests of the parties involved but also provides a solid foundation for a successful business relationship . So, take the time to understand and incorporate these essential components into your contracts to avoid any potential disputes or legal complications down the line.

Formation and enforceability of contracts

Once all the necessary components are in place, contracts are formed and can be enforced under Singaporean law.

Process of contract formation and the role of mutual consent

The process of contract formation involves mutual consent between the parties. It is crucial to note that contracts can be oral or written, and no specific formality is required. The registrar of companies (ROC) also plays a significant role in ensuring proper documentation and legitimacy for businesses.

Factors that render contracts unenforceable or void

However, there are instances when a contract may not be enforceable or even considered void. Several factors can render a contract unenforceable under Singaporean contract law, including:

• Misrepresentation — if one party has made false statements or concealed material facts, the contract may be rendered unenforceable.
• Mistake — a contract may be void if both parties were mistaken about essential elements of the agreement.
• Illegality — contracts involving illegal activities or those against public policy will not be enforceable.
• Undue influence — if one party exerts undue influence on the other, the contract can be set aside.

Breach of Contract and Remedies

Inevitably, breaches of contract can occur, leaving one party unable or unwilling to fulfill their obligations. When a breach occurs, the innocent party may seek remedies to resolve the issue.

Identifying breaches of contract and their consequences

Identifying breaches of contract is essential, as it determines the subsequent consequences.

There are various types of breaches, including:

• Material breach — a significant violation of the contract that goes to the root of the agreement.
• Minor breach — a relatively minor violation that does not substantially affect the overall purpose of the contract.
• Anticipatory breach — if one party indicates their intention not to perform their obligations before the agreed-upon time.

Available remedies for parties affected by a breach

Parties affected by a breach have several remedies available to them, including:

• Rescission — cancelling the contract and restoring the parties to their original positions before entering into the agreement.
• Damages — seeking monetary compensation for the losses suffered as a result of the breach.
• Specific performance — requesting the court to order the breaching party to fulfill their contractual obligations.

Contractual Disputes and Resolution

In the unfortunate event of a contractual dispute, parties may need to consider other measures such as closing down a company if resolutions are not found.

Exploring methods of resolving contractual disputes in Singapore

One of the primary methods is negotiation, where the parties involved discuss their concerns and seek a mutually acceptable resolution. If negotiations prove unsuccessful, alternative dispute resolution methods like mediation and arbitration can be employed.

Role of negotiation, mediation, arbitration, and litigation

Mediation involves a neutral third party assisting the parties in reaching a settlement. In some cases, businesses may even involve non-executive directors as mediators to aid in dispute resolution.

If all else fails, parties can resort to litigation and have their dispute resolved through the court system. The choice of dispute resolution method will depend on the nature of the dispute, the complexity of the issues, and the parties' preferences.

Specific Aspects of Singaporean Contract Law

Although contract law principles apply universally, there are specific considerations and regulations unique to Singapore.

Statutory provisions heavily influence contract interpretation and enforcement in Singapore. The Contract Law Singapore Act, commonly referred to as the Singapore Contracts Act, is one of the key legislation governing the law of contracts in the country. This Act sets out the rules and requirements for forming contracts, interpretation of terms, and remedies for breach.

Another aspect to consider within Singapore's contractual framework is the assignment of contract Singapore law. In Singapore, contracts can typically be assigned unless there's a clause preventing assignment. This means one party can transfer their rights and obligations under the contract to another party, provided the contract allows for such a transfer.

Contracts concluded electronically, commonly known as e-contracts, are also subject to relevant electronic transaction laws. Singapore has enacted legislation to ensure the validity and enforceability of contracts formed electronically , providing a regulatory framework for online transactions.

Examination of unique considerations and regulations in Singapore contract law

Singapore's contract law is not just a mere replication of common law principles. It is interspersed with unique considerations and regulations that specifically address the socio-economic fabric of the nation. For instance, Singaporean contract law considers the multi-cultural business environment, often emphasising good faith negotiations and dealings, especially in business contexts where different cultural values intersect.

One distinctive feature is the strong emphasis on freedom of contract. For those starting or managing a business, understanding the guidelines for company constitution preparation is essential to ensure alignment with Singaporean contract law.

While many jurisdictions emphasise this principle, Singapore enforces it robustly, allowing parties significant autonomy in drafting their agreements. However, this freedom is balanced against public interest considerations, ensuring that the wider societal interests are not compromised.

Singapore has been proactive in adopting measures to tackle emerging trends. For instance, as technology continues to evolve, there have been new regulations introduced to address issues related to digital contracts and online transactions, ensuring that the law remains relevant and up-to-date.

Impact of statutory provisions on contract interpretation and enforcement

Statutory provisions play a pivotal role in guiding the interpretation and enforcement of contracts in Singapore. One classic example is the Singapore Contracts Act, which provides specific guidelines on aspects such as when a contract is formed, the obligations of parties, and the remedies available in case of breaches.

A unique aspect of Singapore's approach is its adaptability to international standards. Recognising Singapore's role as a global business hub, the statutes incorporate internationally recognised principles, ensuring contracts are enforceable not just locally but also in other jurisdictions.

The Electronic Transactions Act is another critical piece of legislation, especially in the digital age. It gives legal recognition to electronic contracts, ensuring that they are just as enforceable as their paper counterparts. This Act has paved the way for businesses to operate seamlessly in the online domain, reaffirming the country's commitment to staying at the forefront of technological advancements.

In essence, while the foundational principles of contract law remain consistent with universal standards, Singapore's statutory provisions ensure that contracts are interpreted and enforced in a manner that reflects the nation's unique cultural, economic, and technological landscape.

Contract Law in Commercial Transactions

Contract law plays a pivotal role in business and commercial transactions in Singapore. It provides a foundation for trade and commerce, protecting the rights and interests of parties engaged in these transactions.

Application of contract law principles in business and commercial dealings

The application of contract law principles ensures that agreements entered into by businesses are clear, enforceable, and fair to all parties involved. Contracts in commercial transactions often contain specific clauses and terms tailored to meet the needs of the industry or market in which the parties operate.

Contractual safeguards for parties engaged in trade and commerce

Parties engaged in trade and commerce often include contractual safeguards to protect their interests. These safeguards may include clauses related to confidentiality, intellectual property rights, indemnity, limitations of liability, and dispute resolution mechanisms.

Contract law in Singapore is an intricate and essential branch of law that underpins the legal framework governing agreements. Understanding the key elements, formation, enforceability, breach, and resolution of contracts is vital for individuals and businesses operating in Singapore.

By comprehending the unique features and considerations of Singaporean contract law, parties can ensure their agreements are valid, enforceable, and provide adequate safeguards to protect their rights and interests. Whether engaged in commercial transactions or personal arrangements, a strong grasp of contract law is crucial in facilitating smooth relationships and resolving disputes effectively.

• Better Business

Tips to run your business smarter. Delivered to you monthly.

Related Articles

Fiscal Year: What Is It and Why Does It Matter?

In Singapore, companies have the flexibility to select their fiscal year-end based on their business needs. It can align with the calendar year, financial quarter-ends, incorporation anniversary, seasonal cycles, or business cycles. Find out more in this article written by Osome experts.

How a Revenue-Based Accounting Plan Can Help You Grow

A revenue-based accounting plan offers businesses in their first year of business a flexible approach to financial management and an opportunity to grow their revenues. Learn more about how this strategy can benefit your business.

Financial Forecasting: A Guide for New Business Owners

Discover the full potential of your Singapore startup through financial forecasting. Gain reliable insights for success and attract investors confidently with Osome's empowering tools. Read our blog today!

What Is the Singapore Progressive Wage Credit Scheme (WCS)

The Singapore Progressive Wage Credit Scheme (WCS) uplifts low-wage workers by incentivizing employers to raise wages. It bridges income gaps, boosts morale, supports businesses in wage increment efforts, fosters productivity, and promotes a more equitable income distribution within companies.

Choosing a Virtual Registered Office Address for My Company

Explore the benefits of choosing a virtual registered office address for your Singapore-based company. Learn how it provides flexibility, enhances professionalism, and saves costs. Find out how to select the right virtual office, and discover the cheapest options available in Singapore.

• go to page 1
• go to page 2
• go to page 3
• go to page 4
• go to page 5

Join the Osome family!

Want in on industry insights, how-to guides, and exclusive offers? Well, you know what to do 👇

We’re using cookies! What does it mean?

This site has not been designed for your version of Internet Explorer. To get the best experience we recommend you upgrade to the latest version of Internet Explorer , Firefox or Chrome ..

• Skip to navigation
• Skip to main content (accesskey s)
• Skip to footer (accesskey x)

Practical Law: Contract Formation and Enforcement in Singapore

17 August 2022

Contributed by Allen & Gledhill Partner Ramesh Selvaraj and Senior Associate Daniel Seow, Contract Formation and Enforcement in Singapore: Overview gives a high-level overview of key concepts of contract law, including contract formation with general information on authority and capacity, formal legal requirements, preliminary agreements and pre-contract considerations, formalities for execution, deeds, notarisation, legalisation and registration requirements, electronic signatures and remote execution, and powers of attorney. The article also considers contract content requirements, variation, assignment and waiver of contracts, enforcement and remedies, and cross-border issues.

The article is part of the Practical Law Contract Formation and Enforcement Global Guide.

Reproduced from Practical Law with the permission of the publishers. For further information, visit www.practicallaw.com .

This site uses cookies and by using the site you are consenting to this. Find out why we use cookies and how to manage your settings. More about cookies

The Government restricts bans on assignment

United Kingdom |  Publication |  November 2018

Legislation now in force preventing parties from prohibiting the assignment of receivables under certain contracts.

At the moment, a contract can prohibit or restrict the parties’ ability to assign or transfer rights created under the contract. The extent of the restriction is a matter of interpretation of the clause concerned. If one of the parties to the contract attempts to assign the benefit of the contract in breach of the restriction, the purported assignment is ineffective.

One of the key assets of any business is its receivables, and restrictions on assignment can prevent the parties from factoring receivables or otherwise raising finance on them. The Government has decided that it should be easier for businesses to raise finance on their receivables. Accordingly the Small Business, Enterprise and Employment Act 2015 allows regulations to be made to invalidate restrictions on the assignment of receivables in particular types of contract. The regulations have now been made. They are contained in The Business Contract Terms (Assignment of Receivables) Regulations 2018. Draft regulations published in July, have been approved by both Houses of Parliament and are now in force.

What types of contracts do the Regulations apply to?

The Regulations apply to contracts for the supply of goods, services or intangible assets under which the supplier is entitled to be paid money. But there are a number of important exclusions from their application, including the following:

• They only apply to contracts entered into on or after 31 December 2018.
• They only apply where the person who supplies the goods, services or intangible assets concerned, and is therefore entitled to the receivable, is a small or medium-sized enterprise which is not a special purpose vehicle. Whether or not an entity qualifies in any particular case requires a detailed examination of the precise wording of the
• Regulations. Counter-intuitively, the test is not applied at the time the contract is entered into, but at the time the assignment takes place.
• There is a specific exemption for contracts “for, or entered into in connection with, prescribed financial services”: These are widely defined to include “any service of a financial nature”.
• There are specific exclusions for particular types of contract, including certain commodities, project finance, energy, land, share purchase and business purchase contracts and operating leases.
• As a general rule, it would seem that the Regulations only apply to contracts governed by English law or the law of Northern Ireland, but they prevent the parties from choosing a foreign law if it can be established that the purpose of doing so was to evade the Regulations.
• The Regulations do not apply if none of the parties to the contract has entered into it in the course of carrying on a business in the United Kingdom.

What is the effect of the Regulations?

The Regulations provide that “a term in a contract has no effect to the extent that it prohibits or imposes a condition, or other restriction , on the assignment of a receivable arising under that contract or any other contract between the same parties.”

A receivable is the right to be paid any amount under a contract for the supply of goods, services, or intangible assets. The Regulations do not prevent the parties from restricting the assignment of other contract rights.

More difficult is to establish what is meant by assignment. Receivables are transferred in various ways in practice. Sometimes the transfer is outright (for instance by way of sale); and sometimes it is by way of security (for instance to secure a loan). The transfer may be effected by a statutory assignment, an equitable assignment, a charge or a trust. “Assignment” is not defined in the Regulations, and so there is some doubt as to which of these transactions are covered.

Although charges are not expressly referred to, they might be covered by the expression “assignment” if it is given a broad interpretation. But because of the uncertainty, the best course is to take an assignment by way of security over a receivable where there is, or might be, a restriction. That way, it is clear that the Regulations do apply.

Non-assignment clauses come in a variety of forms. They will be covered by the Regulations if they prohibit or impose a condition , or other restriction on the assignment of a receivable. The Regulations expressly invalidate terms which prevent the assignee from determining the validity or value of the receivable or their ability to enforce it. Whether or not the Regulations apply in any particular case will require an analysis of the precise terms of the restriction.

The Regulations will be of particular importance to businesses involved in the financing of receivables. And they will also be of concern to buyers because they will override their contractual protections.

• Financial institutions

Practice area:

• Banking and finance

Recent publications

Publication

New rights for employees

A number of new employment laws came into force in April 2024 to provide greater flexibility for employees, including enhanced flexible working rights and new leave entitlements.

United Kingdom | May 07, 2024

NRF Director of Strategic Innovation & Design named Innovation leader of the year at the ILTA 2024 awards

We are delighted to announce that Al Hounsell, Director of Strategic Innovation & Legal Design based in our Toronto office, has been named 'Innovative Leader of the Year' at the International Legal Technology Association (ILTA) Awards.

Global | May 03, 2024

TMT M&A trends: Road to recovery as sector looks to exploit technology deal drivers

After a lacklustre finish to 2022 when compared to the vintage year for M&A that was 2021, dealmakers expected 2023 to see the market continue to cool in most sectors, in response to the economic headwinds of rising inflation (with its corresponding impact on financing costs), declining market valuations, tightening regulatory scrutiny and increasing geopolitical tensions.

Global | May 01, 2024

Subscribe and stay up to date with the latest legal news, information and events . . .

© Norton Rose Fulbright LLP 2023

• Canada (English)
• Canada (Français)
• United States
• Deutschland (Deutsch)
• Germany (English)
• The Netherlands
• Türkiye
• United Kingdom
• South Africa
• Hong Kong SAR
• Marshall Islands
• Nordic region

Jurisdictions

A list of all countries, regions and trading blocs covered by Legal 500 rankings and research list of all countries and trading blocs covered by Legal 500

Green Guide

Exploring the legal sector’s engagement with a green transition

Future Lawyers

The student’s guide to the UK legal profession

Deutschland DE

Auflistung und Ranking von ca. 400 Anwaltskanzleien verschiedener Praxisbereiche in Deutschland

Plus de 300 cabinets d’avocats opérant en France

Global directory of profiled law firms

Barristers’ Sets

Directory of profiled sets

Law Firm Networks

International law firm network index

Service Providers

Suppliers offering support services to legal professionals

Firms in the Spotlight

Featured law firms in specific practice areas and jurisdictions

Firms to Watch

Firms To Watch recognises emerging practices, specialist boutiques and ground-breaking firms that may not otherwise be ranked in Legal 500.

Meet the Team

Meet the team provides extra insight into a specific team’s capabilities and expertise above and beyond what is included within Legal 500 rankings.

Hall of Fame

Law firm partners with long-term experience at the top of the profession

Interview with…

Explore firms’ practices, capabilities, values and cultures through expert interviews with partners

Enterprise GC

An elite, exclusive residential conference bringing together market-leading general counsels

GC Magazine

Leading content for general counsel

GC Powerlist

Recognising VIP general counsel for their innovation, impact and market-leading standing within major global economies

In-House Lawyer

The magazine of choice of the in-house counsel of the UK and EMEA

Comparative Guides

Knowledge centre.

Examining legal perspectives on specific topics across different countries

News & Developments

Latest news and thought leadership from law firms around the world

Special Reports

In-depth reports on legal trends and insights from global law experts.

Legal Business

The market-leading monthly magazine for legal professionals at elite law firms globally

Upcoming Events

Legal 500’s extensive, market-leading programme of summits, awards, powerlist receptions, roundtables delivering cutting-edge discussion and debate globally

Previous Events

Highlights, thought leadership and insights from past legal events and webinars

Corporate Conversations

Insightful discussions with industry leaders on pivotal legal topics

Legal 500 TV

Find out more about the team behind the world’s most successful and highly respected legal market research organisation

Answers to Legal 500’s most frequently asked questions

Submissions

Comprehensive guidance on how to showcase your firm’s capabilities to the world’s most highly respected legal market research team

Bespoke practice area or jurisdictional reporting

Marketing Resources

Display your Legal 500 Ranking on your website

Contact Legal 500 for more information on submissions, commercial and marketing opportunities or more details of our portfolio of research products

Newsletters

Sign up for more information on our portfolio of research products

Rankings open close

Firms open close, lawyers open close, in-house open close, knowledge centre open close, events open close, about us open close, assigning rights where a contract contains a non-assignment clause.

December 13, 2023 > Singapore >

This article is produced by CMS Holborn Asia, a Formal Law Alliance between CMS Singapore and Holborn Law LLC.  

The High Court of Singapore has recently decided that a non-assignment clause in a contract did not prohibit the assignment of non-contractual (or tortious) rights arising out of or in connection with the contract. This article considers the practical implications of that decision.

Introduction

Can a party to a contract assign non-contractual rights arising out of the contract to a third party, notwithstanding the existence of a non-assignment clause in the contract?

The validity and enforceability of such an assignment were recently considered by the Singapore High Court (“HC”) in  Re Ocean Tankers (Pte) Ltd (in liquidation)  [2023] SGHC 330 (“ Ocean Tankers ”).

Contractual vs non-contractual rights

First, it is useful to understand the difference between “contractual” rights and “non-contractual” (or “tortious”) rights.  We will use the terms “non-contractual” and “tortious” interchangeably in this article to refer to the latter category of rights.

“Contractual” rights are rights which are set out in the provisions of the contract, reflecting the express agreement of the parties to the contract. Conversely, “non-contractual” rights are rights which arise as a matter of law and which are connected with (or which arise from) that contract, but are not specifically provided for in the text of a contract.

Ocean Tankers (Pte) Ltd (the “ Company ”) was placed under judicial management in August 2020. In the interim period between Company’s judicial management and its subsequent winding-up, the judicial managers of the Company (the “ JMs ”) brought actions concerning purported assignments of claims made by a creditor of the Company (the “ Assignor ”) in favour of a third-party debtor of the Company (the “ Debtor ”).

One of the issues the HC had to consider concerned the validity of an assignment of non-contractual claims made by the Assignor in favour of the Debtor, and whether that assignment was enforceable against the Company.

The assignment in question sought to assign the Assignor’s rights, title, interests and benefits in and to (amongst other things):

• a storage agreement (the “ Storage Agreement ”) made between the Assignor and the Company;
• a document (the “ Document ”) issued by the Company evidencing the existence and transfer of certain cargo; and
• any and all causes of action the Assignor had or may have had against the Company in connection with or arising from (amongst other things) the Document.

As indicated above, there were various assignments which were purported to be made by the Assignor which were being challenged by the Company.  However, for the purposes of this article, the salient assignment was the purported assignment of the Assignor’s causes of action against the Company in connection with or arising from the Document, as referred to in paragraph (3) above (which the HC referred to as the “ Vessel [B] Document Claim ”).

The court had to consider if the assignment of the Vessel [B] Document Claim was valid in light of the non-assignment clause set out in the Storage Agreement (the “ Non-Assignment Clause ”).  The HC held that the Document was “not separate and independent from the Storage Agreement”, implying that the Document was subject to the provisions of the Storage Agreement, including the restrictions on assignment set out in the Non-Assignment Clause.

Did the assignment of the Vessel [B] Document Claim breach the Non-Assignment Clause?

The Non-Assignment Clause was in the following terms:

The HC noted that the text of the Non-Assignment Clause required the Company’s consent for the assignment and novation of rights under the Storage Agreement (and, by extension, the Document), and the parties did not dispute that no such consent was obtained.

The HC was of the view that there were “ clear indications in the  [Non-Assignment Clause]  itself that it relates to contractual rights but not tortious rights ”. Three reasons were given by the HC in reaching this conclusion.

First, the Non-Assignment Clause referred to “novation”, which the HC noted is a process “ by which a  contract  between the original contracting parties is discharged through mutual consent and substituted with a new contract between the new parties ”. In the HC’s view, when the Non-Assignment Clause referred to the novation of “rights and obligations”, this must be understood to mean  contractual  rights and obligations, and the Non-Assignment Clause did not prohibit the assignment or novation of  tortious  rights and obligations.

Second, the heading of the Non-Assignment Clause – “TRANSFER OR ASSIGNMENT OF  AGREEMENT ” (emphasis added) – indicated the intention of the parties for the clause to cover only contractual rights.

Third, the HC noted that the Storage Agreement itself referred to rights other than contractual rights. For example, the Storage Agreement made references to claims “ in tort , under contract or otherwise at law” as well as obligations or liabilities “under or   arising  from [the Storage] Agreement or at law”. The HC was accordingly of the view that the Assignor and the Company (i.e., the original parties to the Storage Agreement) intended to refer specifically to  contractual  rights and obligations where the Non-Assignment Clause specifically referred to rights “under” the Agreement.

On the facts, the HC found that the assignment of the Vessel [B] Document Claim was a tortious claim and, consequently, held that the assignment of the Vessel [B] Document Claim was outside the ambit of, and did not breach, the Non-Assignment Clause.

In reaching its conclusion, the HC considered the judgment of the English High Court in  Burleigh House (PTC) Ltd v Irwin Mitchell LLP  (“ Burleigh House ”) [1]   which held that the non-assignment clause in that case prohibited both assignments of contractual  and  tortious rights.  However, the HC declined to follow  Burleigh House  for the following reasons:

• first,  Burleigh House  concerned assignments in the context of a former client’s claim against a law firm for professional negligence. The HC was of the view that the implications that such an assignment would have on the solicitor-client relationship were a significant consideration for the English High Court in its interpretation of the non-assignment clause in the law firm’s retainer. The HC was quite clear that this concern did not apply in the context of the case before it and, accordingly, distinguished  Burleigh House ;
• second,  Burleigh House  sought to apply the approach taken towards the construction of  arbitration  clauses, as set out in  Fiona Trust & Holding Corp v Privalov [2]  (“ Fiona Trust ”). That case held that rational businesspeople who agree to such clauses, regardless of whether they refer to disputes “arising under”, “in connection with” or “under” a contract, intend  any   dispute  arising out of their relationship to be decided by the same tribunal. While noting that  Fiona Trust  had been found by the Singapore Court of Appeal to apply to jurisdiction clauses generally [3] , the HC did not agree that the approach towards the interpretation of arbitration clauses as set out in  Fiona Trust  should  ipso facto  apply to other clauses in a contract or to non-assignment clauses generally. In the HC’s view, a non-assignment clause is not a dispute resolution clause and is intended to perform a very different function.

Implications for the drafting of non-assignment clauses

Ocean Tankers  illustrates the potential limits of a non-assignment clause under Singapore law and provides valuable guidance as to what type of rights and obligations parties can assign – or can prohibit the assignment of.

The judgment does, however, indicate that appropriate drafting  can  extend non-assignment clauses to prohibit or restrict the transfer of non-contractual rights. Such a prohibition on the assignment of non-contractual rights would work in tandem with the prohibition of an assignment of contractual rights under the agreement, such that  any  rights related to the agreement can be prevented from being assigned.

Ocean Tankers  has practical implications. For example, some industry standard form documents use language which is similar to that of the Non-Assignment Clause, in prohibiting assignments of rights or obligations “under” certain specifically identified documents.  Ocean Tankers  indicates that a Singapore court would construe this as applying only to contractual rights, and not to non-contractual/tortious ones.

Prior to  Ocean Tankers , parties to a contract would not have considered that such a clause would treat contractual and non-contractual rights differently and would have assumed that such drafting would apply to both categories of rights; there now appears to be a need to re-look and re-draft these clauses to reflect the contracting parties’ intentions.

Having expended considerable effort to explain why the assignment of the Vessel [B] Document Claim did not breach the provisions of the Non-Assignment Clause, the HC ultimately found that the assignment of the Vessel [B] Document Claim was a “ champertous assignment of a bare right to litigate and therefore void and/or ineffective against the Company, the JMs and the liquidators  [of the Company]”.

This, however, does not have any bearing on (and should not distract us from) the HC’s conclusion that the Non-Assignment Clause did not prohibit the assignment of non-contractual rights.

Link to the full article: Assigning rights where a contract contains a non-assignment clause (cms-lawnow.com)

Co-authored by: Kerith Cheriyan, Practice Trainee, Holborn Law LLC

[1]   Burleigh House (PTC) Ltd v Irwin Mitchell LLP  [2021] EWHC 834

[2]   Fiona Trust & Holding Corp v Privalov  [2007] Bus LR 1719

[3]   Bunge SA and another v Shrikant Bhasi and other appeals  [2020] 2 SLR 1223

More from CMS

• Practical Law

Contract Formation and Enforcement in Singapore: Overview

Get full access to this document with a free trial.

Try free and see for yourself how Practical Law resources can improve productivity, efficiency and response times.

About Practical Law

This document is from Thomson Reuters Practical Law, the legal know-how that goes beyond primary law and traditional legal research to give lawyers a better starting point. We provide standard documents, checklists, legal updates, how-to guides, and more.

650+ full-time experienced lawyer editors globally create and maintain timely, reliable and accurate resources across all major practice areas.

83% of customers are highly satisfied with Practical Law and would recommend to a colleague.

81% of customers agree that Practical Law saves them time.

• General Contract and Boilerplate

• Commissioner for Oaths
• Legal Clinic
• Lasting Power of Attorney
• Notary Public
• Fee Calculator
• Power of Attorney HDB
• Power of Attorney Specific
• Property & Conveyancing
• Office Hours
• Bank Transfer
• Commissioning
• Lawyer Fee Witnessing
• Lost Deed Poll CTC
• Quick Fee Calculator
• CTC Fee Calculator
• Witnessing Fee Calculator
• Company Calculator
• POA HDB Flat
• POA Specific
• POA Revocation
• Purchase, Sale, Mortgage, Redemption
• Gift, Part Sale and Decouple
• New Deed Poll
• Submit Notary Online
• Notary Public Checklist
• SD Autogen Form
• Probate Online
• Probate Upload
• Notary Public Collection
• Power of Attorney Collection
• Probate Collection
• Property Collection
• Deed Poll Adult
• Deed Poll Minor
• CTC Lost Deed Poll
• Deputyship Engagement
• Lawyer Witness
• Property Conveyancing
• Power of Attorney

Assignment of Contract, Deed of

This Deed is intended for use where a business or individual wishes to transfer the benefit of a contract, and has decided to execute the assignment as a deed to prevent consideration issues arising.

As the burden of a contract cannot be assigned, the parties may choose a joined assignment and subcontracting arrangement. Note however that some contracts cannot be assigned at all, or there is a prohibition on assignment, or require a would-be assignor to obtain the other party’s prior consent (although intra-group assignments are often permitted).

Share This Article, Choose Your Platform!

Loh eben ong llp, changing your name.

Singapore Contract Law – Key Features, Benefits & Challenges

• Post published: April 26, 2023
• Post category: Singapore

Singapore contract law is based on British common law and incorporates the ideas that most people connect with contracts, such as offer and acceptance, consideration, performance, and violation. 

Singapore has been separate for over fifty years, but it still follows British contract law. It is simple for businesses to sign contracts in Singapore, even if they are with overseas partners because Singapore is aligned with the well-known and respected common law heritage.

Based on its basis of British common law, Singapore uses a well-functioning court system, supplemented with a very strong alternative dispute resolution system, to resolve contract disputes in a reasonable, business-friendly manner. Contractual disputes are settled rapidly in Singapore in large part because of the strong mediation and arbitration services that are offered here.

GOVERNING LAW AND VENUE

If the applicant opens a business in Singapore , he will want all contracts he signs to be “governed” by Singaporean law. This means that any disagreement they have with regard to the contract will be resolved according to Singaporean law. 

The contract’s validity, each party’s rights under it, their defenses, and the legal remedies open to the person who was wronged are all determined by reference to the applicable law. Regarding the same contract, the laws of several countries may come to different conclusions about each of these questions.

Singapore lets the parties decide which law will apply to their contract. So, it is possible but not recommended to agree that some foreign law will apply to the agreement in Singapore. The applicant cannot pick the court where their contract dispute will be heard in Singapore. Legal action involving a contract governing a transaction in Singapore must occur there. 

Choosing Singaporean law for contracts related to business activities in Singapore makes sense because Singapore’s judges and mediators are the most knowledgeable about that nation’s legal system. 

Given the benefits of Singapore’s contract laws, it can even make sense for the applicant to choose Singaporean law as the governing law for your contracts outside Singapore too.

TABLE OF CONTENTS

HISTORY OF SINGAPORE CONTRACT LAW

The common law of contract in England serves as a major inspiration for Singaporean contract law. 

As a result, the laws established by Singaporean courts are extremely similar to those established by English common law. In fact, it is generally assumed that the status will initially be no different from that in England where there is no special Singapore authority on the matter. 

Upon its independence in 1965, Singapore’s Parliament made no attempt to codify the country’s contract law, in contrast to its neighbors Malaysia and Brunei. As a result, a large portion of Singapore’s contract law continues to be governed by judgments of judges.

KEY FEATURES OF CONTRACT LAW IN SINGAPORE

Capacity to contract.

Only parties who are “competent,” or possess the competence to contract, may enter into a valid contract. A contract made in Singapore with a minor, a person intoxicated, or of unsound mind may not be enforceable. If those people were unable to comprehend what they were signing, it is assumed that they lacked the mental capacity to enter into a contract. The conditions for the enforcement of a contract with a potentially incompetent person are mentioned in (Section 6).

Nonetheless, even though it appears odd to attribute “competence” and “understanding” to a legal entity like a firm, a contract with one is always enforceable. Companies are regarded as “persons” in the legal sense who are capable of signing contracts. Check out what a corporation is and how it functions on our Company Registration Singapore page . 

OFFER, ACCEPTANCE, AND CONSIDERATION

According to Singaporean law, a contract can only be made when all three conditions are met:

• one party “offers” a good or service,
• the other party or parties “accepts” the offer, and
• some sort of value is exchanged.

The offer must express or imply a promise to be bound by it in order to meet the legal criteria and not just be a solicitation, often known as an invitation to treat.

For instance, putting products on display with prices simply serves as an invitation to buy, not a “offer” in the legal sense. Before it is accepted, an offer might be withdrawn at any time. The acceptance must be unconditional and can be conveyed verbally or physically. 

The absence of a response is virtually never sufficient to constitute acceptance. Electronic offers and acceptances between parties may result in contracts under the Electronic Transactions Act . The agreement must also be supported by consideration, which means that the parties must exchange something of value, in order for it to be regarded as a contract.

If not, the transaction is regarded as a gift. The value need not be the same for both parties; for one side, it can even be nominal. Value can be either positive or negative, such as payment or refraining from constructing on a plot of land.

In business interactions, there is a legal presumption that parties want to be bound by agreements they enter into. Such presumption would only be disproved by an explicit declaration that the parties did not intend to be legally bound. On the other hand, social ties require a clear declaration of intent in order to be legally binding.

TERMS OF THE CONTRACT

The provisions of the contract outline the parties’ rights and obligations.

The duration of the agreement, the cost of an item or service, and the specifics of the good or service being given are some of the key terms.

A contract must have all necessary provisions in order to be enforceable.

In the absence of a formal contract, the parties’ statements and conduct are considered by the courts to establish whether the parties meant to be bound by them. The courts consider the date the representation was made, the value the party placed on it, and the party’s level of understanding when making that decision.

Singapore follows the parol evidence rule when a contract is written down, which provides that only the written contract, not earlier negotiations or other oral or written evidence, can be utilized to determine the contents of the agreement.

If a term is required to carry out the parties’ objectives and does not conflict with any clear terms in the contract, the court may occasionally suggest it. The Sale of Goods Act, which mandates that sales contracts contain the implied condition that the seller has the right to sell the items, is an example of a statute that may force the court to imply a term.

The court must now interpret the words after confirming them. It applies the “reasonable person” standard in doing so. Not how the persons involved would interpret it, but how a reasonable person would.

PERFORMANCE AND BREACH

According to the law, performance has occurred if both parties comply with all of the terms of the agreement. According to the law, there has been a breach of the contract if any party, or both, fail to fulfill their obligations.

At that point, the party that was harmed has the option of terminating the agreement and turning to the legal system to bring the person responsible for the consequences of the breach accountable.

An actual breach wasn’t necessary. The legal notion of anticipatory repudiatory breach allows the other party to terminate the agreement before performance is necessary if it is obvious that one of the parties has no intention of carrying out their end of the bargain.

DEFENCES TO BREACH

Liability is not usually the result of a breach. A contract can be terminated by the parties due to their consent, dissatisfaction, error, misrepresentation, duress, undue influence, unconscionability, or illegality.

The following are some ways the parties may decide to release one another from the contract’s obligations:

• A termination clause in the first contract
• A “novation” is a recently reached understanding that releases both parties from liability.
• A clause for force majeure that indicates that, in the event of a specific event, neither party shall be held responsible for a breach.

Frustration

The legal concept of frustration also permits the parties to be released from a contract without being held responsible. If anything that could not reasonably have been anticipated prevents one or more parties from performing, frustration releases the parties from liability.

When one or both of the parties entered into the agreement with incorrect expectations regarding a crucial term, the agreement is void for error. A mistake would be made, for instance, if a consignment shop sold a coat to a customer that the store was unaware had been lost or destroyed.

If the term is less important, the court will try to strike the right balance between defending the party who was misled and meeting the other party’s contract expectations.

Yet, since the law presumes that the applicants have read the contract before signing it, failing to do so will prevent them from later claiming error.

Misrepresentation

The contract is void when one party uses misrepresentation to trick another party into signing it (Section 10). The false statement may be made explicitly or inferred. It might also be removed. A “puff,” or vague or inflated sales promise, is not, however, a deception. A major misrepresentation is one on which a reasonable person would have relied in making a decision to engage into a contract.

If the deception was fraudulent or negligent as opposed to innocent, the harmed party may also seek further damages in addition to the right to have the contract  annulled.

Undue Influence, Duress, and Unconscionability

A contract will be void if one party is forced into signing it by the other, or if that other party threatens or otherwise negatively affects the first party’s property or financial interests. A more subtle kind of coercion and undue influence occurs when one party dominates the other and threatens that person’s independence. Finally, if a contract is fundamentally unfair due to the parties’ uneven negotiating strength, it may be voidable as unconscionable.

Illegality or Against Public Policy

Any agreement that violates the law or the public interest will be invalid.

Examples are:

• Deceive public officials
• Undermine justice
• Create a threat to public safety
• Commit a crime, fraud or a tort
• Promote sexual immorality

Unless it is reasonable, a contract that restricts trade will be void as unlawful. The term, or portion of the term, will be severed from the rest of the contract and struck out, leaving the rest of the agreement intact if the illegality only affects a portion of the agreement, such as a clause in an employment contract prohibiting employees from ever competing against the employer.

LEGAL REMEDIES FOR A BREACH

When one party violates the terms of the agreement, the court may order that party to “compensate” for the violation by using one or more of the following: contract damages, liquidated damages, specific performance, or an injunction. The party who was wronged should bring their claim as quickly as possible.

Specific performance and injunction requests, will only be granted if presented as soon as the party learns of the breach. In Singapore, a contract dispute has a six-year statute of limitations on damages.

Contract Damages

The court has the authority to order the party that violated the contract to compensate the party who was wronged for any monetary damage sustained as a result of the violation. These are referred to as contract damages. The amount that the aggrieved party would have received if there had been no breach is taken into account while determining the contract damages.

It can include both the agreed-upon sum and any additional costs incurred as a result of the breach as consequential damages. Instead, the court may award damages in the amount that the offended party spent depending on the contract. For mental distress, the court makes no allowances. Additionally, the court will not help compensate for problems brought on by the wronged party’s failure to minimise his or her damages.

Liquidated Damages

Liquidated damages are those that are specified in a contract by the parties as the amount of losses they would incur in the event of a breach. The court will grant those damages as long as they indicate an honest attempt to estimate the loss a party would endure and are not an attempt to punish the party who breached the agreement.

Specific Performance

The court may order specific performance, which calls for the party in breach to carry out what is required by the contract, in the rare instance when damages will not appropriately compensate the harmed party.

The opposite of specified performance is an injunction. The court forbids a party from acting through an injunction. This remedy is rarely used, just like with specific performance.

Dispute Resolution

In the case that a contract is broken, the Singapore government strongly supports alternative dispute resolution as a strategy to shorten the length of lawsuits and their financial impact on businesses. 

It established the  State Courts Centre for Dispute Resolution , 

Singapore Mediation Centre , Singapore International Arbitration Centre , Singapore Chamber of Maritime Arbitration , and the Consumers’ Association of Singapore, all of which offer mediation and arbitration services to potential litigants.

It takes 150 days on average in Singapore to enforce a contract, as opposed to the global average of 510 days, because of Singapore’s support of alternative dispute resolution and its effective judicial system. Just 25% of the claim is spent on the cost of enforcement. With those figures, Singapore is among the finest nations in the world for contract enforcement.

If the applicant needs to file a lawsuit in court, Singapore offers a productive system and infrastructure for doing so. A contract dispute can be heard anywhere from Singapore’s Small Claims Courts all the way up to the Supreme Court, depending on its worth.

• Small Claims Tribunal: disputes up to S$10,000
• Magistrates’ Courts: disputes up to S$60,000
• District Courts: disputes up to S$250,000
• Supreme Court: disputes over S$250,000

BENEFITS OF SINGAPORE CONTRACT LAW

Singapore contract law is relatively clear and predictable, as it is based on well-established legal principles and precedents. This helps parties to contracts understand their rights and obligations under the contract, and can help prevent disputes.

Freedom of Contract

Singapore contract law allows parties to enter into contracts freely, subject to certain legal requirements. This means that parties can negotiate terms that suit their individual needs and interests.

Enforceability

Singapore contract law provides for strong enforcement mechanisms, such as court orders for specific performance or damages, which can help parties to contracts obtain redress in the event of a breach.

International Recognition

Singapore contract law is widely recognized internationally as being reliable and effective. This can be particularly important for parties to cross-border contracts, who need assurance that their contract will be enforceable in other jurisdictions.

CHALLENGES OF SINGAPORE CONTRACT LAW

Singapore contract law can be complex and technical, particularly for parties who are not familiar with legal terminology and concepts. This can make it difficult for parties to negotiate and understand the terms of a contract.

Enforcing a contract through the Singapore legal system can be expensive, particularly if parties need to engage lawyers or seek court orders. This can be a barrier for parties with limited resources.

Limited Flexibility

While Singapore contract law allows parties to negotiate terms freely, there are certain legal requirements that must be met, such as the requirement that contracts must be in writing for certain types of transactions. This can limit the flexibility of parties to contracts.

Limited Remedies

While Singapore contract law provides for strong enforcement mechanisms, there may be limitations on the types of remedies that are available to parties. For example, specific performance may not be available in all cases, and the amount of damages that can be awarded may be limited. 

Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for more information. 

What is meant by the Singapore Contract Law?

A contract is described as an agreement between two or more people with the constitutional basis to trade “consideration” in order to create a legal liability under Singaporean agreement law, which is comparable to common law regimes.

When is an agreement made in Singapore?

An agreement exists if one party offers goods or services, another party accepts the offer, and any form of payment is transferred between the two parties.

When is an agreement counted as illegal?

A contract is deemed unlawful whenever it is revealed to be a falsehood, thwarts the administration of justice, endangers the public, promotes sexual immorality, etc.

Is a contract valid if it is not in writing?

Under Singapore law, a contract can be valid even if it is not in writing. However, certain types of contracts, such as contracts for the sale of land, must be in writing to be enforceable.

Can a contract be amended or modified after it has been signed?

Yes, a contract can be amended or modified after it has been signed as long as both parties agree to the changes. However, it is advisable to document any changes in writing and have both parties sign the amended contract.

What remedies are available for breach of contract?

Under Singapore law, remedies for breach of contract include damages, specific performance, and injunctions. 

Damages refer to monetary compensation, while specific performance is a court order requiring a party to fulfill its obligations under the contract. Injunctions can prevent a party from breaching the contract or require a party to take certain actions.

How long does a party have to bring a claim for breach of contract?

In Singapore, the Limitation Act sets out time limits for bringing legal claims, including claims for breach of contract. Generally, a party has six years from the date the cause of action arises to bring a claim, although there are some exceptions to this rule.

Can a contract be enforced against a third party?

Under Singapore law, a contract cannot be enforced against a third party who is not a party to the contract unless the third party has expressly agreed to be bound by the contract or the contract confers a benefit on the third party.

What happens if a contract is illegal or against public policy?

If a contract is illegal or against public policy, it will generally be unenforceable under Singapore law. For example, contracts that involve fraud, misrepresentation, or breach of fiduciary duty may be considered illegal or against public policy.

You Might Also Like

Singapore Letter of Consent (LOC) – Steps To Apply

Business Licenses and Permits For Singapore Companies

Singapore Company Constitution – Key Contents, Benefits & Process

Tips To Choose Accounting Services for Small Business Singapore

• SOUTH KOREA
• RAS AL KHAIMAH
• UMM AL QUWAIN
• SINGAPORE OFFSHORE COMPANY
• HONG KONG OFFSHORE COMPANY

Get in Touch

If you have any questions, feel free to let us know. Our specialists will get back to you within 24 hours.

Call Us/Email Us

T: +65 8756 2027

[email protected]

• Sustainability
• Latest News
• News Reports
• Documentaries & Shows
• TV Schedule
• CNA938 Live
• Radio Schedule
• Singapore Parliament
• Mental Health
• Interactives
• Entertainment
• Style & Beauty
• Experiences
• Remarkable Living
• Send us a news tip
• Events & Partnerships
• Business Blueprint
• Health Matters
• The Asian Traveller

Trending Topics

Follow our news, recent searches, singapore, philippines sign agreement for airlines to offer up to 150 codeshare services weekly, advertisement.

Currently, there is a limit of 35 weekly codeshare services between Singapore and Philippine airlines.

A Singapore Airlines aircraft takes off from Changi Airport in Singapore on Apr 15, 2024. (Photo: AFP/Roslan Rahman)

This audio is AI-generated.

SINGAPORE: Singapore and the Philippines have signed an agreement for its airlines to offer up to 150 weekly codeshare services to carry passengers between Singapore and Manila, up from the current limit of 35.

Airlines from third countries will serve as codeshare partners. 

The new limit of 150 weekly codeshare services will double by end-March 2026, and will be fully lifted by March the following year.

In addition, there will be no limit on codeshare services between Singapore and other points in the Philippines, as well as between Singapore and any points in the Philippines involving airlines from members of the Association of Southeast Asian Nations (ASEAN) or the European Union.

Singapore’s Deputy Secretary of the Ministry of Transport Yee Ping Yi and the Philippines' Assistant Secretary for Aviation and Airports Enrique Antonio J Esquivel signed the memorandum of understanding (MOU) on Thursday (May 9).

It upgrades the bilateral Air Services Agreement (ASA), which was signed in 2010 and last amended in 2015.

The upgraded ASA also allows Philippine airlines that are fully owned or controlled by nationals of other countries to access the traffic rights exchanged in the ASA, as long as their principal place of business is in the Philippines.

Previously, only airlines that were substantially owned and effectively controlled by Philippine nationals could do so.

Mr Yee said: "It is important to provide a favourable regulatory environment so that our carriers can capitalise on new business opportunities.

"This MOU will facilitate improved air connectivity between and beyond both countries and is a win-win outcome for both countries."

Related Topics

Also worth reading, this browser is no longer supported.

We know it's a hassle to switch browsers but we want your experience with CNA to be fast, secure and the best it can possibly be.

To continue, upgrade to a supported browser or, for the finest experience, download the mobile app.

Upgraded but still having issues? Contact us