Liquidated damages provisions in contracts are unenforceable if they constitute a "penalty". The Singapore court has not set out any definitive criteria on what it may consider to be a “truly exceptional case” for which punitive damages could be awarded for breach of contract. Awarding punitive damages could encourage aggrieved parties to “tag on” claims for punitive damages as a matter of course. [28] Ralph Cunnington, “The Assessment of Gain-Based Damages for Breach of Contract” (2008) 71:4 Mod L Rev 559 at 562-563 [Cunnington]. The information provided does not constitute legal advice. A recent decision from the Singapore Court of Appeal gives insight into the approach taken in that country. Generally, a valid contract should have the following elements: 1. Preventing oneself to perform a duty as stated in the contract. For the above reasons, the court therefore held that punitive damages would generally not be awarded for breaches of contract. Contracts are legally binding agreements. The appellant’s basis for doing so was that the respondent was in breach of an agreement found in a contract note to arbitrate any disputes in Singapore. [29] Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and Another, [2008] 2 SLR 623, [2008] SGCA 8 at [27], citing McGregor on Damages, 17th ed (Sweet & Maxwell: 2003) at para 8-001. Last updated on April 2, 2020. However, not every failure to perform constitutes “breach of contract”. Therefore, the courts should have the discretion to award punitive damages for breaches of contract in deserving cases. Singapore Contract Law provides an innocent party with four main remedies for breach of contract: Monetary Compensation (Damages): A money damage award is a sum of money awarded to the claimant as compensation for financial losses caused by a breach of contract. However, in exceptional circumstances, the court may in its discretion order the defendant to account for the profits made from the breach of contract (A-G v Blake [2001] 1 AC 268; Teh Guek Ngor Engelin v Chia Ee Lin Evelyn [2005] 3 SLR(R) 22 ). 2004. Accordingly, there is no basis for awarding punitive damages for breaches of contract. The general aim of awarding damages for breaches of contract is to compensate the aggrieved party for losses suffered due to the other party’s breach of the contract between them.. The innocent party is entitled to bring a claim for damages for losses caused by the breach. WROTHAM PARK DAMAGES IN SINGAPORE: ONE SMALL STEP Jason Fee * Turf Club v Yeo Damages for breach of contract are generally compensatory in nature, placing the plaintiff in the same position as if the contract had been performed. Singapore: Business Law (Part 2): Law of Contract 5 (b) In Ong & Ong Pte Ltd v Fairview Developments Pte Ltd, in considering the appellant’s argument that a fundamental change in the circumstances freed it from the contract, the Court of Appeal Currently, they’re going at 10% OFF: These lawyers are selected based on their number of positive reviews and years of experience in this subject you are enquiring about. Thank you. The principal remedy for breach of contract is monetary compensation, also known as, A breach of contract may entitle the innocent party to. Court-implied terms refer to terms that are “read” into the contract by the Court to fill a gap in the contract. This makes it difficult to determine to lay down specific and workable criteria on when a contracting party’s conduct will have exceeded acceptable “self or vested interest” (which underlies most contractual activity) to become “outrageous”.