In CROWN Construction Pte Ltd v UNIVEL Hospitality Pte Ltd [2025] SGHC 64, the High Court found in favour of our client, the Defendant. In this case, the Court examined the enforceability of a furniture supply Sub-Contract where the uncertainty of a crucial term was fatal to the agreement and ultimately led to the Claimant being denied of its contractual remedies.
Background
CROWN Construction Pte Ltd (the “Claimant”) was a Sub-Contractor engaged in the development of the 13-storey hotel project at Craig Road. It engaged UNIVEL Hospitality Pte Ltd (the “Defendant”) to supply and fabricate loose furniture under a Sub-Contract agreement (the “Sub-Contract”).
The Defendant initially quoted approximately USD212,000 for the works, based on materials specified by the project’s interior design consultant (“the Consultant”). As this exceeded the Claimant’s budget, further negotiations ensued. The parties ultimately agreed on a lump sum price of USD140,000 on the premise that alternative, lower-cost materials would be used for fabrication. These materials however, remained subject to the Consultant’s approval. Notably, the Consultant was not part of the Sub-Contract.
The parties thereafter formalised by their agreement through a Letter of Acceptance dated 4 November 2021 (the “Sub-Contract”). The performance of the Sub-Contract was beset by delays, with each party alleging that the other was at fault.
The Claimant maintained that Defendant failed to comply with its own production schedule. The Defendant contended that the delay stemmed from the Claimant’s failure to secure necessary approvals from the Consultant, whose repeated rejection of proposed materials required revisions to the furniture specifications. As a result, the Defendant sought additional costs and revised payment terms, as well as threatened to suspend production.
A first batch of furniture was delivered on 7 January 2023, which the Claimant alleged was incomplete and defective. Following negotiations, the Defendant issued eight quotations on 27 January 2023 (the “Final Quotation”), which the Claimant accepted. The Final Quotation provided for payment of 50% upfront and 50% prior to shipment.
The Claimant made part-payment of the deposit on 14 February 2023. The Defendant proceeded with production of the second and third batches and ordered materials for the fourth batch. Further disputes ensued. At a meeting on 27 February 2023, the Defendant stated that the second batch would not be shipped until the balance was paid. The Claimant then paid USD 24,472 under protest, but the Defendant maintained that USD 10,853 remained outstanding after offsetting unpaid sums for the first batch, and declined to release the shipment.
On 31 March 2023, Claimant’s solicitors alleged that Defendant had repudiated the Sub-Contract by failing to meet the completion date, withholding delivery pending additional payment, threatening to sell the undelivered furniture to third parties, supplying defective furniture, and causing the main contractor to obtain the balance furniture from third parties. The Claimant stated that it accepted the repudiation and would claim damages.
The Defendant denied that it had breached the contract, arguing that the Sub-Contract was invalid for uncertainty. Alternatively, it said the parties had varied the payment terms under the Final Quotation and counterclaimed for wrongful termination.
The Claimant then commenced the present proceedings seeking over SGD 1 million in damages arising from Defendant’s alleged breach of contract.
Issues Before the Court
The Court considered the following issues:
Whether the Claimant was entitled to order variation works;
Whether the Sub-Contract was void for uncertainty;
Whether the Payment Terms of the Sub-Contract had been varied as per The Final Quotation; and
Whether the Defendant was in repudiatory breach of the Sub-Contract.
Whether the Claimant was Entitled to Order Variation Works Under the REDAS Design and Build C0nditions
The Claimant contended that it was entitled to instruct variations under Clause 17.1 of the REDAS Design and Build Conditions of Sub-Contract. The Defendant argued that the REDAS Conditions were never incorporated into the Subcontract, as they were referred to only under the heading “Main Contract Conditions,” which governed the Claimant’s relationship with the Employer, not Claimant and Defendant. Furthermore, Claimant had expressly represented that the REDAS Conditions were provided for “info only.”
The Court agreed with the Defendant. It held that the REDAS Conditions were not incorporated into the Sub-Contract. The nature of the agreement was a supply contract for loose furniture, not a construction contract which is what REDAS Conditions deals with.
The Court further observed that even if the REDAS Conditions was incorporated, the Claimant would nonetheless be estopped from relying on them, having made representations that the terms were for information purposes only.
Whether the Sub-Contract Was Void for Uncertainty
The Defendant submitted that the Sub-Contract was void for uncertainty on the ground that there was no certainty regarding the materials that would be used in the manufacture of the Furniture. The uncertainty arose because the Claimant had sought to reduce the original quotation by approximately one-third and required the Defendant to propose cheaper alternative materials, all of which required Consultant approval.
The Court accepted the Defendant’s position. It held that the Claimant had introduced an uncertainty in the process. There was no contractual mechanism to resolve deadlock arising from this issue. On this basis, the Sub-Contract was void for uncertainty and therefore unenforceable.
Whether the Payment Terms of the Sub-Contract had been Varied as Per The Final Quotation
The Court found that the Final Quotation reflected revised payment terms agreed following negotiations. These terms required 50% advance payment prior to production and 50% prior to shipment, and the Subcontract was thereby amended by mutual agreement.
Whether the Defendant Was in Repudiatory Breach of the Sub-Contract
The Claimant contended that completion date was 30 November 2022. However, on evidence, the Court found that the Defendant merely stated that it would expedite production and keep the Claimant informed. At no point was there a contractual commitment to deliver by 30 November 2022. Further, given the revised payment terms, the Court found that the Defendant was entitled to withhold delivery pending in accordance with the Final Quotation.
The Claimant also failed to prove that the delivered furniture was defective. Accordingly, the Court found that the Defendant did not commit the breaches the Claimant alleged, and that the Claimant had no basis to terminate the Sub-Contract.
Findings of the Court
The Court dismissed the Claimant’s claim of over SGD 1 million in damages and found in favour of our client, the Defendant, on its counterclaim for wrongful termination. However, as the Court found that loss had not been proven, nominal damages were awarded.
Commentary
Parties often enter into agreements on the assumption that they have a legally enforceable contract. This case demonstrates that such agreements can be unwound and found to be unenforceable where crucial terms are found to be too uncertain. The uncertainty was further compounded by the Claimant’s staff who made representations as to the effect of terms, and this also proved decisive. In the end, the Court held that where the parties do not fix certainty for themselves, the law will not do so for them.
The successful Defendant was represented by Yuen Law’s Disputes Resolution Practice.
Read the full judgment.