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4. Safe Mode Pte Ltd enters into a contract with Dilit Pte Ltd under which the latteris to supply 100 computers at Safe Mode Pte Ltd. The delivery date is specified asthe 1stof August. Dilit Pte Ltd comes to deliver the computers two days after thatdate. Can Safe Mode Pte Ltd rejectthe computers? From a business/legalperspective, could Safe Mode Pte Ltd have done anything to make the position moreclear?Need to look at contract terms whether termination is possible. Was it a seriouseffect of breach as a result of delivering it late and what has it to do with thecomputers. If it was a day event for the day and it was late, termination is possible as there’sserious consequence and there’s fundamental breach. Or if Dealit knows the specificreason why safe mode need the computer for. From a business/legal perspective, safe mode could have added express clause tocontract to show that termination is possible. Or if delay is to be expected, muststate before 5 days.
Tutorial 71.The contract provides that for every day of delay in completion of a commercialbuilding, damages of $1000 are payable. The completion is delayed by 20 daysdue to the fault of the contractor. How much can the innocent party claim if theactual loss suffered is $22,000?Do you think generally, it is wise for a businessto alwayshave a liquidated damagesclause? On the assumption that liquidated damage clause is valid and reasonable which can becompared against the market rate, the innocent party would be able to claim forliquidated damage which amounts to 20k. however, it would not be possible for innocentparty to claim for the extra 2k if its claimed under LD clause. Not extravagant and rate ispro-rated, LD clause is valid. Generally, yes it is wise as it helps to set out what is considered as damage incurred,helping to reduce time and expense going to court, encouraging fulfillment of contract. 2. Perfect Timing Pte Ltd agreed to sell a machine to Sosway Pte Ltd at $20000.Delivery was to be on the 1st. However, when the 1stcame, Perfect Timing Pte Ltddid not supply the machineto Sosway Pte Ltd and repudiated the contractdueto various problems on its end. Sosway Pte Ltd had wanted to use the machinefor the production process. Thus far it had been using another machine for theproductionprocess, but on the eve of the 31st(the day before the delivery of thenew machine), the old machine was sold and delivered to a third party. As aresult Sosway Pte Ltd’s production came to a stand stillon the 1st. Sosway PteLtd managed to get another similar machine from some other source within 21days of the breach. (a)What damages can Sosway Pte Ltd claim for? Would matters be different if Perfect timing was aware that old machine was going to be sold to another party? Under the assumption that there was no liquidated clause covering the parties, Sosway may be able to claim for unliquidated damage.