Exercising an Option to Purchase Property by Way of Cheque: What If the Cheque Is Dishonoured? - Ng Soo Khim v Heng Teo Bong; Seah Kiat Seng v Amtel Exports Pte Ltd
![handle is hein.journals/saclj9 and id is 423 raw text is: Notes and Comments
EXERCISING AN OPTION TO PURCHASE PROPERTY BY
WAY OF CHEQUE: WHAT IF THE CHEQUE IS
DISHONOURED?
Ng Soo Khim v Heng Teo Bong
Seah Kiat Seng v Amtel Exports Pte Ltd
Introduction
In Singapore, real property is usually bought and sold by way of an option
to purchase granted by the vendor to the prospective purchaser in
exchange for payment of an option fee by the prospective purchaser.
The option normally stipulates that it is to be exercised within a specified
time (usually two weeks) by the prospective purchaser signing and
returning the acceptance page of the option together with payment of a
deposit, failing which the option fee paid by the prospective purchaser in
exchange for the option is forfeited and the option lapses. But what if
the option is exercised before it expires, but the cheque tendered in
payment of the deposit is dishonoured upon presentation for payment?
There are two recent local cases in which this issue was considered: Ng
Soo Khim v Heng Teo Bong' and Seah Kiat Seng v Amtel Exports Pte
Ltd.
Ng Soo Khim v Heng Teo Bong
In Ng Soo Khim v Heng Teo Bong', the defendant and his brother
(hereinafter referred to as the joint vendors) were joint tenants of a
property. The joint vendors had on March 1, 1985, granted to the plaintiff
an option to purchase the property at a price of $520,000. The preamble
in the option read:
To exercise this option you shall sign the acceptance form at p.4
herein and shall deliver the said form together with a cheque [italics
mine] for the sum of ... $47,000 being the balance of the 10% deposit
to [the vendor's] solicitors, Messrs Teo Choo Hong & Co, ...
The plaintiff exercised the option on March 1, 1985, the last and only
day of the option period, by signing the acceptance copy and issuing to
the joint vendors' solicitors a cheque for the sum of $47,000, being the
balance of the 10% deposit.
The cheque was deposited into the solicitors' account on March 2, 1985,
but on March 4, 1985, was returned by the bank to the solicitors with the
1 [1993] 1 SLR 407.
2 [1997] 1 SLR 311.
3 supra note 1.
9 S.Ac.L.J.](ViewImageLocal?handle=hein.journals/saclj9&div=27&collection=journals&method=preview&ext=.png&size=3)
What Is HeinOnline?
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most