LGST101 Business Law

Robertsons (R), a departmental store icon in the region, rented store space at Jurong North Leisure Mall, which is owned and operated by Zeng How Properties (ZHP). The rent charged is S$10,000 per month. Due to the onset of the Covid 19 pandemic and the effects of the “circuit breaker” measures imposed by the Singapore Government, the mall’s business has been greatly affected such that many shopkeepers have in fact left the mall. In view of these circumstances, R asked ZHP for a reduction in rent due to these bad business conditions. ZHP reluctantly agreed to accept S$5000 per month. In the rush to finalise negotiations, these changes were not updated in writing in the tenancy agreement between the parties.

Nevertheless, R proceeded on the commitment and faithfully paid the new rental for the next 6 months. Up until last month, things have not gotten better and as a result of worsening patronage, more shops (including R) are now contemplating closure or moving elsewhere. Concerned that they may be “short-changed”, ZPH issued a letter of demand to R claiming $30,000 for which they claimed as arrears in their rent.

Advise Johnny, Robertson’s financial controller, on his company’s legal liability to pay the arrears of rent of S$30,000 claimed by ZPH.