Law of Contract Cheat Sheet for RES Exam Revision

A valid contract generally requires offer, acceptance, consideration, intention to create legal relations, certainty and capacity. For RES questions, identify the parties, the exact promise, whether acceptance was properly communicated, and the legal consequence of non-performance. A contract may be written, oral or implied, unless legislation requires a particular form.\n\nThe fastest Contract Law quick reference is: formation first, terms second, breach third, remedies last. Memorise the difference between a condition, warranty and innominate term; distinguish a valid liquidated-damages clause from a penalty; and remember that contractual claims are generally subject to a six-year limitation period under Singapore law.\n\nFor the RES exam, Law of Contract is tested in Paper 1. Use the Law of Contract topic page alongside these Law of Contract revision notes. The key answer is simple: a contract is enforceable when the essential elements are present, its terms are sufficiently certain, and no vitiating factor or statutory rule defeats enforcement.

A contract is formed only when the parties reach agreement supported by consideration and legal intention. An offer is a definite promise to be bound on specified terms; an invitation to treat merely invites offers. Property advertisements, listings and brochures are usually invitations to treat, not offers.\n\nAcceptance must correspond exactly with the offer. A counter-offer rejects and replaces the original offer, while a request for information does not necessarily do so. Acceptance must normally be communicated to the offeror, unless the offer clearly permits another method. Silence is generally not acceptance.\n\nConsideration is the price paid for a promise. It must be sufficient in law, but need not be adequate in economic value. Past consideration is generally not good consideration. Commercial agreements carry a presumption of intention to create legal relations; domestic or social arrangements generally carry the opposite presumption. A RES exam answer should therefore classify each communication before deciding whether a binding contract exists.

The parties must have legal capacity and the agreement must be sufficiently certain to be enforceable. Capacity issues commonly involve minors, persons lacking mental capacity and companies or agents acting beyond authority. Do not assume every agreement involving a minor is automatically void; the legal effect depends on the transaction and applicable rules.\n\nTerms must be clear enough for a court to determine what each party promised. An agreement to agree, vague pricing language or an incomplete essential term may fail for uncertainty. Courts may imply terms only where necessary to give business efficacy or because the term is obvious—not to rescue a fundamentally incomplete bargain.\n\nMost contracts do not require a special format, but property transactions may involve statutory conveyancing requirements, written instruments and registration. Keep the Land Titles Act and the relevant conveyancing documentation in view. The Estate Agents Act (Cap. 95A) regulates estate agency work, but it does not replace ordinary principles of contract formation. For exam purposes, separate enforceability, authority and regulatory compliance.

The classification of a term determines the remedy available after breach. An express term is stated by the parties orally or in writing. An implied term may arise by statute, custom, prior dealings, fact, law or business necessity. A representation made before contracting is not automatically a contractual term; determine whether the parties intended it to be binding.\n\n| Term type | Effect of breach | Typical consequence |\n|---|---|---|\n| Condition | Serious breach of an essential term | Termination plus damages may be available |\n| Warranty | Breach of a non-essential term | Damages, but normally no termination |\n| Innominate term | Depends on consequences | Termination only if the breach substantially deprives the innocent party of the contract’s benefit |\n\nA common RES trap is treating every breach as grounds for cancellation. Ask whether the term is essential, expressly classified, or whether the consequences are sufficiently serious. Singapore contract law recognises that breach of an innominate term can justify discharge where the innocent party loses substantially the whole benefit of the agreement.

Breach occurs when a party fails to perform a contractual obligation, performs defectively or indicates in advance that it will not perform. Actual breach happens on or after the due date. Anticipatory breach occurs before the due date through a clear refusal or inability to perform.\n\nAfter anticipatory breach, the innocent party may accept the repudiation and sue, or affirm the contract and remain bound to perform—subject to the risk that circumstances later make performance impossible. For a sufficiently serious breach of a condition or innominate term, the innocent party may elect to terminate prospectively and claim damages. Termination does not automatically erase accrued rights or every surviving clause.\n\nContracts may also be discharged by performance, agreement, frustration or operation of law. Frustration is narrow: a supervening event must make performance impossible, illegal or radically different, not merely more expensive. A contractual claim is generally barred after six years from accrual under the Limitation Act, subject to exceptions and the precise claim. The exam rule is: identify the breach, classify its seriousness, then choose the response.

Damages are the primary remedy for breach and aim to compensate, not punish. The claimant must prove loss caused by the breach, satisfy reasonable foreseeability, and take reasonable steps to mitigate loss. The usual measure places the innocent party in the financial position it would have occupied had the contract been performed. Remote or speculative loss is generally not recoverable.\n\nSpecific performance is a discretionary equitable remedy requiring the defendant to perform the promise. It is more likely where damages are inadequate, such as contracts involving unique land, but it is not automatic. An injunction restrains conduct or requires action and is also discretionary. A declaration clarifies the parties’ rights.\n\nRemember three exam distinctions: damages are generally available as of right after proven breach; equitable remedies are discretionary; and termination is not itself a damages award. A claimant may accept repudiation and claim damages, or affirm the contract and claim damages, depending on the circumstances. Courts may also enforce a valid agreed sum, but a clause designed to punish rather than compensate may be treated as an unenforceable penalty.

An agreed compensation clause is enforceable only when it protects a legitimate interest without imposing an unconscionable or extravagant punishment. Labeling a clause “liquidated damages” is not conclusive. The court examines substance, commercial context and the likely relationship between the stipulated sum and the loss or protected interest.\n\nFor ordinary damages, apply this sequence:\n\n- Causation: Did the breach cause the claimed loss?\n- Remoteness: Was the loss within reasonable contemplation when the contract was made?\n- Mitigation: Did the claimant take reasonable steps to reduce loss?\n- Proof: Is the amount supported by evidence rather than speculation?\n\nA seller who suffers a resale loss after a buyer’s default may claim foreseeable loss, but cannot recover avoidable losses created by inaction. In property questions, distinguish a contractual deposit from damages and check whether the agreement contains an express forfeiture or compensation clause. The Contract Law summary RES exam rule is: compensation follows proven, foreseeable and unmitigated loss; punishment does not.

A contract that appears properly formed may still be challenged if consent was improperly obtained. Misrepresentation is a false statement of existing fact or law that induces the other party to contract. It may be fraudulent, negligent or innocent, with remedies depending on the category and circumstances. A mere opinion is usually not actionable unless the speaker has special knowledge or does not genuinely hold it. Silence is generally not misrepresentation, subject to exceptions such as half-truths or changed circumstances.\n\nMistake can affect validity where it is fundamental, but ordinary bad bargains are not automatically mistakes. Duress involves illegitimate pressure that leaves the victim with no practical choice. Undue influence concerns improper influence over a vulnerable party.\n\nFor an RES case study, ask: What was said? Was it false? Did it induce the contract? Was consent freely given? Keep contractual remedies separate from regulatory consequences under the Estate Agents Act (Cap. 95A). A salesperson’s misleading statement may create civil liability, professional consequences or both; do not treat compliance with agency rules as a substitute for analysing the contract.

Memorise current figures separately from core contract doctrine because property-based case studies may combine both. For residential properties acquired on or after 4 July 2025, IRAS applies SSD at 16%, 12%, 8% and 4% for holding periods of 1 year or less, more than 1 to 2 years, more than 2 to 3 years, and more than 3 to 4 years respectively; no SSD applies after 4 years. Older acquisitions from 11 March 2017 to 3 July 2025 use the earlier three-year schedule of 12%, 8% and 4%.\n\n| RES exam item | Current figure |\n|---|---|\n| Paper 1 and Paper 2 | 60 MCQs plus 20 case-study MCQs each |\n| Marks per paper | 100: Section A 60, Section B 40 |\n| Duration | 2 hours 30 minutes per paper |\n| Passing mark | 60 for each paper, subject to CEA review |\n| 2026 full sitting | S$512.30 |\n| 2026 modular sitting | S$283.40 |\n\nFor RES candidates, contract formation, terms, breach and remedies sit within Paper 1’s Law of Contract coverage. Always check current CEA and IRAS materials before the examination because rates and administrative details may change.

Q: Is an OTP itself a contract? Usually, the exercised Option to Purchase creates contractual obligations according to its terms; analyse offer, acceptance, consideration, deadlines and conditions rather than relying on the document’s label.\n\nQ: Is an advertisement a binding offer? Usually no. It is commonly an invitation to treat, unless its wording shows a clear intention to be bound without further negotiation.\n\nQ: Can a buyer cancel whenever a seller breaches? No. Cancellation depends on the term breached and its consequences. A condition breach, or sufficiently serious innominate-term breach, may permit termination; a warranty breach normally supports damages only.\n\nQ: What is the most important remedies rule? Damages compensate foreseeable loss after mitigation; specific performance and injunctions are discretionary.\n\nQ: What should be checked in official materials? Refer to the Estate Agents Act (Cap. 95A), Land Titles Act, Planning Act and relevant HDB Resale Procedures for statutory or transaction-specific rules. The RES Exam Guide and Free RES Practice can help convert this cheat sheet into timed recall. The definitive answer is: read the facts, classify the legal issue, apply the rule, then select the remedy.