BUS201: Esmeralda has been patronizing a traditional cake stall called “Auntie Agnes Cake Stall” since her childhood: Contract & Agency Law Assignment, SUSS

Question

Esmeralda has been patronizing a traditional cake stall called “Auntie Agnes Cake Stall” since her childhood. The owner and operator of the stall, Auntie Agnes, is able to recognize Esmeralda and would often asks about Esmeralda and her family every time she visited the stall. When Esmeralda heard that the stall would be closing for good as Auntie Agnes is retiring, she felt a great sense of loss for the 60-year-old stall which is steeped in cultural heritage due to the traditional methods used in the making of the cakes.

As Esmeralda had some previous experience operating a café, she decided that she would try to buy out the business from Auntie Agnes so as to preserve the cultural heritage of the stall.

Subsequently, Esmeralda visited the stall and spoke to Auntie Agnes about her intention to buy out the business. Esmeralda said, “Auntie Agnes, you think about it – instead of closing down, you can sell the business to me for $80,000. It’s not a small amount of money and will go a long way in supporting your retirement. Also, all your previous hard work in building up the business will continue to live on.”

Auntie Agnes initially expressed some reluctance at handing the business over to an outsider but eventually agreed to consider what Esmeralda had said.

Later in the week, on a Wednesday, Esmeralda received a WhatsApp message from Auntie Agnes at 3.00 pm, which stated as follows: “Hi Esmeralda, I consulted with my daughter, and she says that I should ask for more than $100,000 for the business, including the lease at #01- 02, 170 Upper Bukit Timah Road and all associated intellectual property of the business.”

Esmeralda gave it some thought before replying, “Auntie Agnes, how about this – $90,000, but we need your help to train our newly hired staff for three months. Is this ok?”

Auntie Agnes took some time to think about it, and replied to Esmeralda with a simple “Okay”. Esmeralda was very happy when she saw Auntie Agnes’ message.

After that WhatsApp exchange, Esmeralda spent the next few weeks negotiating the other details of the deal with Auntie Agnes. Around the same time, Esmeralda started to raise funds for the purchase of the business.

After a month passed from the date of their WhatsApp exchange, Esmeralda and Auntie Agnes finally worked out all the details of the deal, which Esmeralda then typed onto a written document. When Esmeralda brought a copy of the document to the stall for Auntie Agnes to keep as a record, Auntie Agnes apologetically explained that she will no longer be able to train the new hires for the stall as she would be migrating to Germany very soon to be with her daughter’s family.

Esmeralda was very disappointed at hearing this and responded that she would need to rethink the whole deal. Auntie Agnes expressed surprise at this statement, as she thought that everything has already been agreed upon between them.

Explain whether there is a valid contract between Auntie Agnes and Esmeralda for the sale of the business involving the cake stall. In your answer, you should identify and discuss the four (4) elements of a contract.
For this Question 1(b), assume that Auntie Agnes and Esmeralda disagree on whether there is a valid contract for the sale of the business between them, and they have decided to use private mediation to resolve their dispute.

Discuss the nature and features of private mediation in the Singapore context, and describe how the process of private mediation may be used to help Auntie Agnes and Esmeralda resolve their dispute. In your answer, you should also address the following points:

How can Auntie Agnes and Esmeralda go about starting the process and selecting a mediator?
Are there any procedural rules or guidelines for the private mediation process?
What approach or role should the mediator adopt in the process?
Assuming Auntie Agnes and Esmeralda are able to reach a consensus at the end of the mediation session, what should they do to ensure that their consensus can be legally enforced?

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