New law will help those who cannot fulfil contract due to outbreak , Latest Singapore News - The New Paper

New law will help those who cannot fulfil contract due to outbreak

This article is more than 12 months old

New Bill to be introduced in Parliament next week will protect those unable to fulfil obligations due to Covid-19

Individuals and companies who find themselves unable to fulfil their contractual obligations on account of the coronavirus outbreak will be protected by an upcoming law.

For instance, if they have to postpone a wedding or business function, they will not have to forfeit their deposit to a hotel or catering firm.

The Covid-19 (Temporary Measures) Bill will be introduced in Parliament next week, the Ministry of Law (MinLaw) said yesterday.

The ministry said it intends to expedite the passage of the new law through a certificate of urgency signed by the President, which would allow all three readings of the Bill to be taken in one Parliament sitting.

Minister for Home Affairs and Law K. Shanmugam said the Bill was a whole-of-government effort involving agencies such as the Ministry of Finance and the Ministry of Trade and Industry, as well as committee members from the private sector, such as law practice Rajah & Tann, DBS Bank and CapitaLand.

"The Bill was put together very quickly, in a matter of days, as we saw the situation deteriorating."

When passed next week, the new law will also prevent landlords from terminating commercial leases due to non-payment of rent if this is due to Covid-19, such as in the case of a restaurant whose footfall has fallen because of the virus outbreak.

Although rent will continue to accumulate and be payable, it will be due only six months later.

In this way, the law will provide temporary cash-flow relief for both businesses and individuals who may otherwise have to pay damages or risk having their deposits or assets forfeited from failing to meet contractual obligations, said the ministry.

The proposed law will apply retroactively and cover contractual obligations performed on or after Feb 1 this year, which the ministry said was the approximate date the coronavirus outbreak started to significantly impact Singapore.

It will cover contracts entered into or renewed on or before March 24, the day the multi-ministry task force set up to deal with the outbreak announced stricter measures to minimise the virus' spread, such as the closure of entertainment venues, and deferment or cancellation of all events and mass gatherings.

The ministry said the proposed law will not absolve or remove parties' contractual obligations but suspend them for a prescribed period, which is six months from when it becomes law.

To guard against unfair outcomes, MinLaw said it will employ about 100 assessors to resolve disputes arising from application of measures under this law.

The assessor will decide if the contractual obligation was untenable on account of Covid-19 and has the power to grant relief.

The parties will not be allowed to engage lawyers, there will be no cost orders and the assessor's decision will be final.

This provision encourages parties to "work things out sensibly" rather than to immediately opt to go to an assessor, whose decision might advantage one side more than the other, said Rajah & Tann managing partner Patrick Ang, who was consulted on the Bill.