Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223449
Title: PERFORMANCE BONDAGE: APPLYING THE UNFAIR CONTRACT TERMS ACT TO ASSESS THE �ASPLENIUM CLAUSE �
Authors: TAN WEE MIN BENJAMIN
Keywords: Building
PFM
Project and Facilities Management
Lim Pin
2018/2019 PFM
BUILDING AND CONSTRUCTION LAW
CREDIT AND SECURITY
GUARANTEES
PERFORMANCE BONDS
INJUNCTIONS
UNCONSCIONABILITY
EXCLUSION CLAUSE
UCTA
Issue Date: 28-May-2019
Citation: TAN WEE MIN BENJAMIN (2019-05-28). PERFORMANCE BONDAGE: APPLYING THE UNFAIR CONTRACT TERMS ACT TO ASSESS THE �ASPLENIUM CLAUSE �. ScholarBank@NUS Repository.
Abstract: Performance bonds are a cornerstone element of construction contracts and they represent security furnished in favour of the employer to ensure that the contractor adheres to contractual specifications and obligations. Traditionally conceived to be the equivalent of the letter of credit, the performance bond was placed on a pedestal and as such, it was immune to judicial interference except in the clear case of fraud. Progressively, the Singaporean approach departed from orthodoxy in light of findings pointing out that this symmetry was flawed and problematic, especially so when beneficiaries were “uniquely placed to inflict economic harm on the obligor” if he acted in bad faith. This gave rise to the separate grounds of “unconscionability” in restraining abusive calls on performance bonds. Nevertheless, in CKR Contractors v. Asplenium Land, the Court of Appeal enforced an exclusion clause that limited the principal from restraining the demand on any grounds including unconscionability. It was found that the clause did not oust the equitable jurisdiction of the courts but instead limited the access to it. Following this, it was hypothesised that exclusion clauses excluding unconscionability as a ground for injunctive relief would have been entered into every contract that required a guarantee, thereby, rendering the unconscionability doctrine moot. This dissertation acts on the Court of Appeal’s observation that the clause would have been subject to section 3 of the Unfair Contract Terms Act. In doing so, it addresses the fundamental principles of performance bonds, its usage in Construction and ultimately proposes a revised framework depicting a guide for principals when they are subject to abusive demands and exclusion clauses as seen in CKR Contractors v. Asplenium Land.
URI: https://scholarbank.nus.edu.sg/handle/10635/223449
Appears in Collections:Bachelor's Theses

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