Legend Building Supplies v Chon Hwa Construction: Breach of Contract for Steel Rebars

Legend Building Supplies (Pte) Ltd sued Chon Hwa Construction Pte Ltd in the High Court of Singapore on 30 October 2000, claiming damages for breach of two contracts for the purchase of steel reinforcement bars. Chon Hwa Construction counterclaimed for losses due to the supply of rusty rebars. The court gave judgment for Legend Building Supplies for the sum claimed and dismissed Chon Hwa Construction’s counterclaim, ordering costs against Chon Hwa Construction in respect of both the claim and the counterclaim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff; Defendant's counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Legend Building Supplies sued Chon Hwa Construction for breach of contract for failing to purchase steel rebars. The court ruled in favor of Legend Building Supplies.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Legend Building Supplies (Pte) LtdPlaintiffCorporationJudgment for PlaintiffWon
Chon Hwa Construction Pte LtdDefendantCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Justin ChiaHarry Elias Partnership
Devinder Kumar RaiHarry Elias Partnership
Parveen KaurAzman Soh & Murugaiyan
M SivakumarAzman Soh & Murugaiyan

4. Facts

  1. Legend Building Supplies and Chon Hwa Construction entered into two contracts for the sale and purchase of steel rebars.
  2. The First Contract, dated 26 February 1996, involved 4,000 tonnes of rebars.
  3. The Second Contract, dated 22 July 1996, involved 10,000 tonnes of rebars.
  4. Chon Hwa Construction failed to take delivery of the total quantities specified in both contracts.
  5. Legend Building Supplies disposed of the undelivered balance to third parties.
  6. Chon Hwa Construction claimed the quantities were maximum and denied the Second Contract's validity.
  7. Chon Hwa Construction counterclaimed for losses due to the supply of rusty rebars.

5. Formal Citations

  1. Legend Building Supplies (Pte) Ltd v Chon Hwa Construction Pte Ltd, Suit 1085/1999, [2000] SGHC 217

6. Timeline

DateEvent
First Contract signed
Second Contract signed
Discussion regarding price reduction
Letters confirming price reduction sent
Legend Building Supplies sent letter regarding balance quantity
Chon Hwa Construction replied to Legend Building Supplies' letter
Legend Building Supplies sent final letter regarding consumption schedule
Harry Elias Partnership sent letter of demand
Ellen Lee & Co replied to Harry Elias Partnership's letter
Judgment issued

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant breached the contract by failing to take delivery of the agreed quantities of steel rebars.
    • Category: Substantive
    • Sub-Issues:
      • Failure to take delivery of goods
      • Repudiatory breach
  2. Authority to Contract
    • Outcome: The court found that the project manager had the authority to enter into the Second Contract.
    • Category: Substantive
    • Sub-Issues:
      • Ostensible authority
      • Actual authority
  3. Interpretation of Contract Terms
    • Outcome: The court interpreted the contract terms to mean that the defendant was obliged to purchase the entire quantity of rebars specified in the contracts.
    • Category: Substantive
    • Sub-Issues:
      • Maximum quantity vs. fixed quantity
      • Entire agreement clause

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Disputes

11. Industries

  • Construction
  • Building Materials

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Nam Kee Asphalt Pte Ltd v Chew Eu Hock Construction Co Pte LtdHigh CourtYesSuit 803/99SingaporeCited regarding the interpretation of contract quantities as maximum or minimum.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Steel reinforcement bars
  • Rebars
  • Delivery Orders
  • Contractual quantities
  • Repudiatory breach
  • Rusty rebars
  • Mitigation of loss
  • Balance quantity

15.2 Keywords

  • breach of contract
  • steel rebars
  • construction
  • singapore
  • legend building supplies
  • chon hwa construction

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Contract Law85
Contracts80
Commercial Law70
Building and Construction Contracts50
Collections30
Warranty Law20

16. Subjects

  • Contract Dispute
  • Sale of Goods
  • Construction Materials