Jan2019

Question 1

BB Tea Pte. Ltd. ("BB Tea") operates a chain of retail shops that sell unique tea-based drinks.

BB Tea took out an advertisement with a local newspaper to advertise its drink products. The advertisement states:

"BB Tea is having a promotion! Any customer who cuts out this advertisement and brings it to any of our retail shops will get a $2 discount on the purchase of any drink."

Mary saw the advertisement on 1st January. She cut out the advertisement and went to a retail shop that day, as she wanted to use the advertisement to get a discount off her drink purchase.

Mary went to the branch of BB Tea at Toa Payoh, and purchased a drink. However, when she tried to use the advertisement, the shop assistant told her:

"We are sorry, we have limited redemptions for the $2 discount per day. The limit has been reached today, so we cannot allow any further redemption."

Mary was very upset with the response by the shop assistant, and she wanted to know if she had any contractual rights against BB Tea.

1.(a)Explain whether Mary is entitled to the $2 discount as advertised in the newspaper. In your answer, you should identify and discuss the four (4) elements of a contract, and conclude whether there is a valid contract between Mary and BB Tea. (28 marks)

2.(b)Give one (1) suggestion to BB Tea on what it could have done with the advertisement to prevent this problem from arising, with a brief explanation for your suggestion. Your suggestion should be based on contract law principles. (2 marks)

Question 2

Edwin visited a theme park, "Wonder World", over the weekend. The park boasted of a number of thrilling rides, including a modified "haunted house" concept thrill ride called "Creepy Coaster".

Edwin was keen to try out Creepy Coaster, and as he stood in the queue for the ride, he observed a large notice board placed just outside the entrance and next to the ticketing counter (where payment is made) to the ride. The wording was in large font size and he could read it even though he stood several metres away in the queue. The notice stated as follows:

"1. The management of Wonder World has taken every precaution to bring you exciting but safe theme park rides.

2. While Wonder World is committed to the safety of our rides, Wonder World will not be responsible for any injury, sickness or other losses that arise from the participation in our rides."

Edwin felt assured by Wonder World's assertions of safety. He bought a ticket and took the ride.

Unfortunately, due to the negligence of the technical staff during the prior maintenance of the ride, the ride malfunctioned halfway while Edwin was on it, and the resulting faulty and unplanned movements of the ride caused Edwin to hit his arm against one of the props used for the ride, and also to drop his mobile phone which subsequently could not be found.

After the ride concluded, Edwin went to the management office to lodge a complaint and to seek compensation for his arm injury and the loss of his mobile phone. However, Wonder World refused to compensate Edwin and instead referred him to the notice placed outside the ride.

Identify the exemption clause in this scenario and apply the legal rules under the four (4) points relating to the enforceability of an exemption clause to analyse whether the exemption clause is valid and enforceable against Edwin in relation to (i) his arm injury, and (ii) the loss of his mobile phone. (25 marks)