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Proving Causation in a Claim for Loss of Chance in Contract

David Lee Yeow Wee

(2005) 17 SAcLJ 426

In 1995, the Court of Appeal dealt with the issue of loss of chance arising from a breach of contract in Straits Engineering Contracting Pte Ltd v Merteks Pte Ltd [1996] 1 SLR 227. Almost ten years on, the decision of the Court of Appeal in Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd [2005] 1 SLR 661 not only provided an opportunity for an update of the law in this area, but also presented a particular factual matrix upon which the court could provide valuable insight on how the thorny issue of causation in a claim for loss of a chance in contract is to be decided. Interestingly, the decision of the Court of Appeal was split, with the Chief Justice delivering a dissenting judgment. This article summarises the decision, analyses the differences of opinion in the Court of Appeal and surveys the decisions and authorities relied upon. There is also a brief discussion on how the views of the Court of Appeal differ with the law on loss of chance in the area of tort law. Finally, it aims to provide a framework for practitioners and courts in future cases involving a claim for loss of a chance in contract.