Soto Pte Ltd ("Soto") was the caterer engaged by Land-O Pte Ltd ("Land-O") to provide catering services for 6 of Land-O's monthly management meetings. The first 2 meetings were scheduled on 5 March and 20 April. Soto provided the main course and contracted to purchase fruit sorbet desserts from D-light Pte Ltd ("D-light"). The contract with D-light is for 6 months at a special discounted price per order subject to a minimum order of S$500.00 per month. The contract between Soto and D-light does not have a termination clause.
Soto ordered:
(a) S$500.00 worth of desserts from D-light for the meeting on 5 March; and
(b) $600.00 worth of desserts for the meeting on 20 April.
Soon after the meeting on 5 March, Land-O complained to Soto about the unacceptable quality of the desserts supplied by D-light. The desserts tasted like ice cream, instead of sorbet. Land-O staff also complained that there was no difference between the different fruit flavours indicated on the packaging. Soto gave feedback to D-light but D-light's manager simply shrugged his shoulders and said that the fruit sorbet desserts were based on their usual recipes and "this is our standard".
Soto was not satisfied with the response from D-light's manager and told the D-light's manager not to deliver the order scheduled for 20 April. Soto decided to purchase fruit sorbet desserts from another supplier at higher cost for the meeting on 20 April. Land-O staff were satisfied with the desserts and in fact, complimented Soto for taking action to change the supplier.
The second supplier charged Soto S$800 (i.e., S$200 higher than what D-light had charged for the 20 April order). Hence, Soto decided to claim the additional S$200 from D-light.
On 22 April, D-light issued an invoice, stating a sum of S$500 for the 5th March order and another sum of S$600 for the 20th April order.
On 23 April, Soto paid D-light S$300 (being S$500 for the 5 March order minus the S$200 claim).
Soto refused to pay the full invoice of S$1,100. D-light was unhappy with the non-payment of the full sum and informed Soto that it would not supply the fruit sorbet desserts to Soto for the remaining months unless it received the balance payment of S$800.
On 26 April, Soto notifies D-light that it is terminating the contract and will not be placing any further orders of fruit sorbet desserts.
(a) Advise Soto on whether it has any basis for making the S$200 deduction from the 5th March order. Analyse and evaluate the legal principles and examine reasons for your advice. You should also briefly describe Soto's possible remedies for the 5th March order.
(b) Advise Soto on whether it is entitled to terminate the entire contract on 26 April and refuse to place any further orders with D-light, given the alleged breach by D-Light. In your advice, you should also briefly examine whether there are other possible remedies which Soto may have against D-light. Demonstrate well developed written proficiency.