Saturday, March 12, 2011

A Promissory Estoppel Scenario: Singapore Law

Discusses a scenario of promissory estoppel in Singapore contract law.

Scenario: Jane was an accomplished pianist and was also a part-time tutor giving piano lessons to promising students. Grace, a typist working with a marketing firm, engaged the services of Jane, after having failed her previous piano exams under three different tutors. The exams were scheduled during the last week of the month, in October. There were a total of ten lessons and the fees payable by Grace to Jane was $500 per lesson.

After five lessons, Grace informed Jane that she was unable to continue with her piano lessons as her mother was suffering from cancer and the treatment costs were rather high, making it practically impossible for her to pay $500 per lesson for the remaining five piano lessons. Jane felt sorry for Grace as she was one of her promising students. Out of pity, she agreed to collect a nominal sum of $150 per lesson for the remaining five lessons.

Grace was grateful for the kindness showered by Jane and continued with her piano lessons. However, soon after Grace had cleared her exams, Jane demanded on being paid the balance of $1,750 for the last five lessons.

Advise Grace as to whether Jane will be able to successfully claim the $1,750 from her.

1. Introduction
The main issue identified in this case would be whether Jane is legally justified to claim the $1,750 as balance payments of five piano lessons from Grace.

2. Legal Principle Involved
Firstly, we need to examine if there was a contract in the first place. There are four elements that make up a contract and they are offer, acceptance, consideration and intention to create legal relations. All four factors must be present before a contract is formed:

  • Offer: an expression made by one party (”offeror”) to another party (”offeree”) communicating the offeror’s willingness to perform a promise. [2] This means that one person must make an offer or promise to another person in exchange for something. In this case, Grace had made an offer to pay Jane $500 per lesson in exchange for piano lessons. This arrangement was good for 10 lessons leading up to a piano exam. It is construed that there was an offer in this case.
  • Acceptance: once an offer is made by one party, the other party must agree to the offer and this is made known to the offeror. In this case, there was obviously an acceptance of offer since lessons started and payment was made in exchange for piano lessons. How the acceptance was made (whether in writing, orally or by conduct) is not known, but it is likely that Grace either had to sign a lesson form or went into a verbal agreement with Jane. This is acceptable and hence, there was acceptance of the offer...more>>

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