VITIATING

FACTORS
Group 4
Eunice, Weili, Ai Ni, Zhi Qi, Brian, An Qi
 VITIATING FACTORS

Definition Factors that deprive the contract of its efficacy, making it unenforceable

Vitiating Factors

Incapacity Illegality Misrepresentation Mistake Others

● Minors ● Gaming & Wagering ● Fraudulent ● Common Mistake ● Duress
● Mentally Unsound ● Contrary to Public ● Negligent ● Mutual Mistake ● Undue Influence
or Intoxicated Policy ● Innocent ● Unilateral Mistake ● Unconscionable
Persons ● Contrary to Statute ● Non est factum Bargain
● Restraint of Trade
INCAPACITY
Minors

● Enactment of Civil Law

● Persons who have not reached
(Amendment) Act 2009
the age of majority
● Minors (18 years) given
contractual capacity in
● Legally responsible for his most commercial
● The lack of capacity which
actions (21 years old) activities, Section 35(1)
characterises a contracting
of CLA
party
● SOGA & MCA balances the ● Except for certain
interests of both minors and the contracts under Section
● Rationale of the concept 35(4) CLA
other party
rooted in public policy
Mentally Unsound or Intoxicated Persons
MINORS CLASS 1
BINDING / VALID CONTRACTS
Validity of Contract
● Legally Binding Upon Minor &
Other Party
Rights of Minor and Other Party
● Both the minor and other party
may enforce the contract
Peters v Fleming (1840) and Nash v Inman (1908)
● Beneficial contract for necessaries, goods 1)“suitable to
the condition in life of the minor or other person concerned
and 2) suitable to his actual requirements at the time of
the sale and delivery” (SOGA s3)
● Non-necessities such as gold rings could constitute
necessaries for Fleming, the son of a wealthy man
● Nash, a tailor, failed to recover payment from his customer
Inman, a minor, because Inman already had enough
clothing at the time of sale
Roberts v Gray (1913)
● Could be a beneficial contract for service necessaries
● Gray, a minor, was bound by his contract for a tour with a
professional billiards player, Robert, as the tour service
was obviously for the minor’s benefit
MINORS CLASS 1
BINDING / VALID CONTRACTS
Validity of Contract
● Legally Binding Upon Minor &
Other Party
Rights of Minor and Other Party
● Both the minor and other party
may enforce the contract
Valentini v Canali (1889)
● If the minor has performed his obligations already, the
contract is unenforceable against the other party, unless
the the other party totally failed to give consideration
Valentini, a minor, failed to recover his payment for a house
that he’d already had the benefit of for some months.
Chaplin v Leslie Frewin (Publishers) Ltd (1966)
● Could be a(n) overall beneficial contract for employment
● The son of Charlie Chaplin, while a minor, was bound by his
contract with the publishers of his ghost-written biography,
even though it depicted him as a “depraved creature”’. It
allowed him to start earning a living as an author
MINORS CLASS 2

VOIDABLE CONTRACTS
Validity of Contract
● Legally Binding Upon Minor & Other
Party
Minors’ Right
● Repudiation of Contract Without
Liability
Minors’ Accountability
● Obligations Prior to Repudiation
● Loss of Previously Owned Money or
Property
Davies v Beynon-Harris (1931)
● Lease was not void but voidable
● Lease enforceable against the minor since he did not
repudiate it within a reasonable time
Edwards v Carter (1893)
● Repudiation nearly five years after attaining the age of
majority was not reasonable
● Whether the minor knew of his right does not affect
Steinberg v Scala (Leeds) Ltd (1923)
● Minor was not entitled to recover any money paid by her
to the company
MINORS CLASS 3
RATIFIABLE CONTRACTS
Validity of Contract
● Legally Binding Upon Other Party
● Neither Valid Nor Enforceable
Against Minor
Minors’ Right
● Ratification of Contract
MINORS’ CONTRACT ACT
The court may, if it is just and equitable to do so, require the
defendant to transfer to the plaintiff any property acquired by the
defendant under the contract, or any property representing it.
Section 3(1) | RESTITUTION
A guarantee is enforceable against the guarantor when
(a) a guarantee is given in respect of an obligation of a party to
a contract made
(b) the obligation is unenforceable because he was a minor when
the contract was made
Section 2 | GUARANTEE
 MISREPRESENTATION
A false statement of fact made by one party (the representor) to another (the representee) which induces and is relied
upon by the representee to alter his position — typically by entering into a contract with the representor
NOTE: Not all false representation amounts to misrepresentation

False Statement of Fact

PAST OR EXISTING FACT
● Cannot be a mere statement of opinion
or of some likely future event
● Statement of intention to future action
could be false statement of fact if at
the time of making the statement of
intention, the representor did not hold
such an intention
Tan Chin Seng & Others v Raffles Town
Club Pte Ltd (No 2) (2003)
STATEMENT OF OPINION
● Cannot form basis of a
misrepresentation
● Exception: Representor had access
to relevant facts & had no
reasonable ground for holding
such an opinion
Bisset v Wilkinson (1927)
SILENCE
● Does not amount to misrepresentation
● Dependant if there was a duty to do so
● Exceptions
1) Amount to partial non-disclosure if
stated becomes half-truth by what is
unstated
2) Change of circumstances causing
previously truthful statement to be
misleading
3) By law to disclose all material facts
 Inducement

For a false statement to be considered as a misrepresentation, statement must induce representee to enter the contract

Reaffirmed by Singapore Court of Appeal (Panatron v Lee Cheow Lee (2001), Alwie Handoyo v Tjong Very Sumito (2013))

CASE STUDY EXCEPTION

Tai Kim San v Lim Cher Kia (2001) ● Even if there is an opportunity to investigate truth but was not done, it
The defendant was the Managing Director of a does not automatically remove possibility of inducement or reliance.
group of companies in which the plaintiffs
held shares. The plaintiff agreed to sell their
shares to the defendant. However, the
defendant later sued the company for
misrepresentation of the company, which
induced them to sell the shares.
The Singapore court held that the plaintiffs
had not been induced by the defendant
representation
Redgrave v Hurd (1881)
CATEGORIES OF MISREPRESENTATION
Fraudulent Misrepresentation Negligent Misrepresentation

● Made knowingly, without belief of its truth, or
recklessly — not caring whether it is true or
false. Case: Derry v Peek (1889)
● High degree of proof required by representee that
representor was dishonest
● Made without due care or without reasonable
grounds for believing that it is true
● Proof required by representor that he has
reasonable grounds to believe and did believe the
statement to be true

● Motive & whether the statement is irrelevant or ● Statute based and arises in the context of
insignificant to the representor does not matter contract. Case: Howard Marine & Dredging Co
Ltd v A Ogden & Sons (Excavations) Ltd (1978)
SECTION 2(1) | MISREPRESENTATION ACT (MA)
A representor who makes a false statement without fraudulent intent would still be liable unless he can prove
that he has reasonable grounds to believe and did believe the statement to be true.
CATEGORIES OF MISREPRESENTATION
Innocent Misrepresentation Summary

● Made without fraud and without fault

Misrepresentation
● Made the statement believing and having
reasonable grounds to believe in its truth
Fraudulent intent?
No Yes
● Subjectively believed the truth and objectively
had reasonable grounds for that belief Reasonable? Fraudulent

It is important to identify the categories so as to use the No Yes

appropriate remedies. Innocent Negligence
REMEDIES
Rescission

● s. 1, MA SECTION 1 | MISREPRESENTATION ACT (MA)

● Voidable contract until the representee express the Where a person has entered into a contract after a
INTENTION TO BE NOT BOUND. misrepresentation has been made to him, and —
○ Once expressed, contract cannot be revived. (a)the misrepresentation has become a term of the
○ Contract becomes void ab initio. contract; or
● Cases when rescission is unavailable: (b)the contract has been performed, or both, then, if
otherwise he would be entitled to rescind the contract
○ Affirmation of contract
without alleging fraud, he shall be so entitled,
○ Lapse of time subject to the provisions of this Act, notwithstanding
○ Restitution is impossible the matters mentioned in paragraphs (a) and (b).
○ 3rd party rights
○ Court exercises discretion pursuant to s. 2(2),
MA, Rescission → Damages
REMEDIES
Damages Indemnity

● Monetary Compensation ordered by the court requiring ● Obligation of the indemnifier to be responsible for
the defaulting party to pay the injured party the liability of the indemnitee

● Under s.2(2) MA: Affects NM & IM only ● Allows the representee to be indemnified against all
○ FM: Required obligations necessarily created by the contract
○ NM: Required & Whittington v Seal-Hayne (1900)
Rescission → Damages = $$$
○ IM: Rescission → Damages =$$$

SECTION 2(2) | MISREPRESENTATION ACT (MA)

Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he
would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising
out of the contract, that the contract ought to be or has been rescinded, the court or arbitrator may declare the contract
subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature
of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that
rescission would cause to the other party.
THANK YOU
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