Singapore: Covid-19 (Temporary Measures) Act, 2020

Singapore: Covid-19 (Temporary Measures) Act, 2020

A Legislation was recently passed by the Singapore government to temporarily relieve parties of their contractual obligations that may potentially give rise to adverse legal consequences if not honoured.

The contracts that fall under the ambit of the Act are as follows;

1. Commercial loans to businesses such as secured loans granted by banks and finance companies
2. Hire-purchase agreements and conditional sale agreements
3. Agreements entered into for events, such as booking venues
4. Tourism contracts
5. Commercial lease agreements
6. Construction and supply contracts
7. Performance bonds

This Act applies to individuals, businesses, and all such other persons at the risk of forfeiting their deposits or vehicles due to the pandemic. It is imperative to note that this Act applies only to contractual obligations due to be performed on or after 1^st February 2020 following any contract that was entered into or renewed before 25^th March 2020.

In order to claim benefits under this Act, the concerned party is required to send a notice to the other party furnishing all such relevant information expressing their inability to honour the contractual obligation and reasons attached thereof. In case the other party wishes to bring action against the one claiming relief, they shall be prevented from doing so. In lieu of the aforesaid, the party wishing to obtain action may refer the matter to an assessor who is empowered to determine the scope of the contract and whether the party claiming relief is entitled to it. The Act does not allow either party to seek representation through an attorney and the relief sought shall depend on the assessor’s discretion, not subject to appeal. 

To avail an assessment, the party claiming action shall serve a copy of the application on all the parties involved, upon payment of a fee. Any breach of the provisions of the Act will impose liability of $1000, and the party shall be ordered to return any deposit extracted from the other party.

The type of contract shall determine the duration of the relief sought. Upon expiry of the relief period, contractual obligations become due, and parties can initiate action thereafter.