Publication Type
Journal Article
Publication
Singapore Law Journal (Lexicon)
Publication Date
9-2025
Abstract
This article traces the development of the law of deposits in Singapore and reviews the restatement of the law in the 2024 landmark decision of the Court of Appeal in Li Jialin v Wingcrown Investments Pte Ltd, as well as some of the issues left open by the decision. It is argued that while the decision has clarified that deposits are not subject to the penalty rule but instead subject to the common law test of reasonableness—with the practical consequence that, with clear drafting, contracting parties can rely on the validity of reasonable deposit clauses without the complication of the penalty rule—the conceptual distinction between the penalty regime and the deposit regime remains a difficult one.
Keywords
law of deposits, Singapore Court of Appeal, penalty rule, common law, contract law, reasonableness test, deposit clauses, contract drafting, commercial law, remedies in contract
Disciplines
Commercial Law | Contracts | Courts
Subject(s)
Applied or Integration/Application Scholarship
ISSN/ISBN
2737-5048
Publisher
SMU Lexicon, SMU School of Law
Version
publishedVersion
Copyright Holder
Singapore Management University
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Format
application/PDF
Citation
YEO, Tiong Min.
The law on deposits in Singapore. (2025). Singapore Law Journal (Lexicon). 5, 1-37.
Available at: https://ink.library.smu.edu.sg/sljlexicon/47
Volume
5
Page
1-37
Research Area
Dispute Resolution