Discussion Questions: The case of Cashin Li & his realty woes

Cashin Li is a wealthy and well known property developer and owner of commercial properties.
On 1 December 2012, Cashin Li contracts with Build Fast Construction (BFC) to build a swanky
shopping centre in prime Orchard Road for a lump sum of $10 billion, with the following
contractual terms: construction work to start on 1 January 2013 and to end 1 December 2013,
time being of the essence, so that the shopping centre would be ready for the yuletide and lunar
festivities (the building contract). During negotiations for the building contract, Cashin Li made
it clear to BFC of his plans to open a huge departmental store and to secure an anchor tenant to
operate a large supermarket, with the remaining space in the shopping centre leased out to a
select group of retailers.

Advise Cashin Li of his legal position in the following situations. Consider these situations
separately and independently of each other.

. (a) BFC breached the contract when it could not meet the 1 December 2013 deadline. The
shopping centre finally opened its doors for business on 14 February 2014, the last day of the
Chinese New Year. By then, Cashin Li had lost the opportunity to make profits from 1 Dec 2013
to 13 February 2014. His loss was especially large because he had missed out on the increased
sales that he would have enjoyed over the Christmas season and Chinese New Year frenzy.
The total potential loss of gross profit (ie sales less cost of goods) over this period of delay was
conservatively estimated at $2 million. Cashin Li also wasted $200,000 on advertisement,
promotion and marketing of the shopping centre for the yuletide and lunar period. He also
suffered loss of rental for the same period when the anchor tenant, Colder than Cold Storage,
decided to rent premises elsewhere because of the delay. Cashin Li became very depressed
when his hitherto unblemished reputation as a premier commercial property developer received
a severe knock and when he lost the opportunity to enter into a lucrative business partnership
with a rich Saudi Arabian prince, to develop a similar shopping complex in Riyadh, after the
prince became aware of the serious problems with the current project. Cashin Li wants to claim
damages in respect of all these losses. Advise Cashin Li on his chances of success.

. CommonLawrule,iftimeisnotmet,breachofwarranty(notcondition)
1 Breachofwarranty=righttodamages
. Wphrasetimebeingoftheessence,warrantyelevatedtocondition,becomesbreachof
conditioncontractcomestoanend,BFCneedstomitigateandgivequotestobringlevelof
workbacktocontractrequirement
. Currentsituation:Ifyouacceptthebreach,conditionrelegatedbacktowarranty,CLpreserves
righttoclaimdamages.
1. Headsofdamages:(nodoublecompensationoversametypeofloss)
a) LossofProfitsoverChristmasPeriod(EC)
b) Adv&Mktg(RL)
c) LossofReputation(NPLcannotbeclaimed;AddisvGramophone)
d) Lossofrentalanchortenant(EL)
e) Lossofopportunity(EL)
2. AssessmentofLossruleofcuttingdown
a) Causationeffectanymonetarylossmustflowfromthebreach
ButforbreachofcontractbyBFCwouldCLhavesufferedloss?No=
causationbyBFC;BarnetvKensington
(e)Arabiansidereachedownconclusiononwrongpremise(Singaporedelay
shouldnotaffectArabianconstruction),nonsequitur,causationeffectmayfail
 b) Remotenessinlaw
Islossfair(ly)andreasonable(ably)andconsideredausualloss?;Hadleyv
Baxendale
(a)festiveperiodlossyesbecauselargelycelebratedinSpore
(b)usualforcompaniestospendlargeamountsofmoneytoadvertisebefore
launchoflargeproject
(c)reputationlossnotusual
(d)lossofrentalofAT,usualbecausemostlargemallshaveanATANDactual
knowledgebydeveloperoftheexistenceoftheAT
(e)paralleltocontractinVictoriaLaundryvNewmanIndustries,unusualloss
ANDBFCdidnotknowhencedoesnotfulfilconditionsofHadleyvBaxendale
Iflossistooremote,cannotclaim(irrecoverable)evenifitscausedby
guiltyparty
3. ClaimingWhatsthedangerofclaimingbothgrossprofitsandtheentirelossofexpensesfor
advandmarketing?
a) Intheeventthatadvisnotjustforfestiveperiod,notwithstandingdelay,isthereany
benefitincurredbyCLthroughadv,shouldBFCbeliableforentireamount?
b) Courtwouldneedtoprorated
c) Criminallawispunitive,commonlawiscompensatory:damagesareprimarilyfor
compensation.
4. NotenoughevidenceifCLhasmitigated,addprovisortoinnocentpartythatheneedstomitigate
theloss
a) AlladviceissubjecttotheassumptionthatCLhasmitigatedhisloss.

. (b) When BFC was unable to complete the construction work on 1 December 2013, Cashin Li
exercised his right to terminate the contract. He then called for urgent tenders from three
contractors to complete the outstanding construction work. The tenders cost $200,000,
$150,000 and $300,000, respectively. In deciding which of the three tenders to accept, advise
Cashin Li on how he should be evaluating the tenders (the factors he should be taking into
consideration) before finally deciding which one to choose.

- Mustexamineandevaluatejobscope,qualityofworkandpricetobringperformancebackto
levelofthecontract(contractualposition).

. (c) Cashin Li, known for his fanatical fengshui beliefs, contracted with Not a Damn Crafts for a
pair of Italian marble gargoyles to grace the Shopping Centres main entrance. These gargoyles
are the last remaining ones in the world and are worth millions of dollars. Not a Damn Crafts has
refused to honour the contract to sell Cashin Li the repugnant-looking statues because a Texas
oil billionaire has offered them three times the amount that Cashin Li was supposed to pay for
the gargoyles. Cashin Li desperately wants the statues because his fengshui consultant
believes they will usher good fortune for the shopping centre and his business. Advise Cashin Li
as to whether he can compel Not a Damn Crafts to sell him the gargoyles.

- SPgrantedwhendamagesareinadequatetobringbackperformancebacktocontractuallevel;
FalckevGray
- Damagesassessablebecausetycoonpaid3timesmore
CLmustprovethatnothingelsecanreplacethegargoylestobringthespecialquality
offortunebringing
IsFengshuivalidenough
 DamageswouldbedifferencebetweenCLspriceandTycoonsprice
- Conclusion:HewillstandareasonablystrongchanceofgettingSP(NEVERUSEDEFINITELY
BECAUSEEQUITABLEREMEDYISDISCRETIONARY)

[Ifpurchaserbuyssomethingwhenheknowstheresalreadyanowner,hewouldbeinNemoDat.Must
considerpositionofTexancontract.AssumingTexantycoondidnotknowaboutCL,hewouldbegiven
titleofEquitysDarlingandconsideredbonafidepurchaserforvaluewithoutnotice.CLwants
rescission(injunction)ofTexancontractbutcourtwouldnotupsetbettertitle=SPwillnotbegranted.If
courtordersrescissionofcontract,thenabinitio]

. (d) Cashin Lis confidential secretary, Ms Chin Gong, has been moonlighting during her office
hours for an auditing firm, in breach of her employment terms with Cashin Li that she was not
to engage in any work, service, occupation or business with any person, firm or company,
whether in competition or otherwise, during (her) employment with (him). Cashin Lis marketing
manager, Ms Sally Loh, has just resigned in breach of her 3-year employment contract which
still has 2 years left to run, but he desperately needs her to work for him as he finds her services
quite indispensable. What remedies can Cashin Li seek to prevent Ms Chin Gong from
moonlighting and to ensure that Ms Sally Loh continues to work for him?

MsChinGong

- Employeeunderdutyoffidelityevenifthereisnobreach
ReasonablystrongchanceforbosstoaskforinjunctiondirectedatMsChinGong:to
ceaseworkingforanyoneduringworkhoursinhisoffice
- Equitableremediesgohandinhandwithcompensation,bossabletoclaimdamages

MsSallyLoh

- CLonlyhasdamagestoclaimeventhoughhewantsremedyofSPBUTSPwillnotbegrantedin
contractsofpersonalservice(withinSingaporeconsititution)
- PILON:Paymentinlieuofnoticepeggedtoemployeessalary
IfMsLohserveda1monthnotice,damagesisequivalentto1month(orifcontractwas
3monthsthendamagesis3months)

[gardenleavepaidbutnotnecessarytoworkunlesscalled,stillemployeebutsimilartoROT]

COMMONLAW:IFEQUITABLEREMEDYFAILS,ALWAYSFALLBACKTODAMAGES

Fixedtermcontractonlyappliestocommonlawemployee.
$4500/permonthincomeceiling
- under=employmentactunderstatutorylaw,abletoterminatewithleaveofnotice
PMEbutnotgivenpart4ofEA
PMEscancomplaintoMinisterofmanpowerifthereisunfairterminationofcontract
Contract+Statute
- over=withincommonlaw,breachofcontractifterminated,stillnoSPbutwillbegiven
damagesofentireremainingtenure
Contractunfairterminationrequirescivilclaimwithownexpenseoflawyer