Tutorial 6
1. Chee Ter Bak wants to sell his furniture business to Soo Yu. He represents to Soo Yu that he has
checked with HDB and that his checks show
... [Show More] that a new HDB town is coming up within 1
kilometre of the furniture business within the next two years. Because of this, he says, business
will double. He asks Soo Yu to check with HDB to verify his claim. Soo Yu decides to buy the
business, partly because of closeness of his home to Chee Ter Bak’s shop and partly because of
Chee Ter Bak’s representations about the new HDB estate. As it turns out, no HDB estate is
planned for the vicinity anywhere in the near future and Chee Ter Bak had actually told a
blatant lie and had never checked with HDB. When he finds out the truth a month later, Soo Yu
wants to rescind the contract and get back his money.
(a) Can he do so?
When Chee Ter Bak is selling furniture business, he lied about new HDB estate that is coming
up with 1 kilometre of the furniture. This is a false statement of fact, and because of this false
statement of fact, Soo Yu form a contract with Chee Ter Bak. Since there is a misinterpretation,
the innocent party may be able to rescind the contract.
(b) What if he delays for 3 years after he finds out the truth (because he feels business might still
improve due to other reasons) and then decides to take action?
If Soo Yu delay for 3 years, he might not be able to rescind the contract as there was a lapse of
reasonable time since the misinterpretation. However, he can still sue Chee Ter Bak for damage
and seek compensation.
(c) From a business/practical perspective, what should Soo Yu have done, before buying over the
furniture business?
Soo Yu should verify that all the details given by Chee Ter Bak regarding the furniture business
is correct before buying over the business.
2. Sure Keel Pte Ltd submits a tender to do a renovation project for a statutory board. The tender is
accepted. Half way through the job, the statutory board realizes that Sure Keel Pte Ltd has previous
convictions under the Workplace Safety and Health Act (and some employees have died as a result)
and so the statutory board is not keen on continuing with the contract. Can it cancel the contract on the
basis of misrepresentation? How could the statutory board have protected itself? [Show Less]