Breach, Frustration, Frustrated Contracts Act, Force Majeure Clauses
Elton Car Rentals (ECR) is a Singapore company that hires luxury cars for VIPs during conventions or other meetings in Singapore. Its fleet includes 20 BMW, 10 Rolls Royce, and 30 Mercedes Benz cars.
In early April 2023, ECR was approached by Reliable Conferences (RC) to supply a number of luxury cars to ferry VIP guests during the annual Bankers Meeting in Singapore, to be held from 10-11 June 2023. ECR signed a contract with RC on 10 April as follows:
Details of Contract
Event Name: Bankers Meeting 2023 Singapore
Cars required: 10 BMW cars (with drivers provided)
Duration: 2 days
Fees to be paid by RC:
Downpayment to be made by 13 April 2023 – $2,000
Balance to be paid in full on 11 June 2023 – $20,000
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In the event that the said Meeting is cancelled, RC shall inform ECR at the earliest possible date. If the Meeting is cancelled due to pandemic or similar reasons, the downpayment shall be non-refundable. Moreover, RC shall indemnify ECR for all losses incurred by ECR in such a situation.
In April and May, ECR accordingly planned to set aside the cars required for the Bankers Meeting. Had there not been this Meeting, ECR could have rented out the cars later in April to another event organiser, TechCity Conferences, for an even higher total price of S$25,000.
In May, ECR advertised on social media and news outlets in Singapore that it would be the supplier of luxury cars for the upcoming prestigious Bankers Meeting. As this was the first time that ECR was supplying cars for such a high-level event, it was keen to showcase the company and build up its reputation for future events. ECR’s representative was also interviewed on CNA as the company was shown as an example of an “up and coming” Singapore-grown company and ‘success story”, whose owner rose from a very humble background.
In mid-May, an urgent regional financial crisis arose and most of the VIP attendees who would be at the Bankers Meeting had to cancel their trips to Singapore in order to meet in Europe to deal with the crisis. The cancellations were so significant that RC decided that it had to cancel the Bankers Meeting altogether, as without the absent participants, important decisions targeted to be made at the Meeting would not be achieved. On 1 June, RC sent the following email to ECR:
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