EVEN as a new Bill seeks to provide temporary relief from some legal obligations in light of the coronavirus outbreak, the principle of the sanctity of contracts is still important, said Minister for Law and for Home Affairs K Shanmugam in the second reading debate of the Covid-19 (Temporary Measures) Bill on Tuesday. Read more at The Business Times.
In such a situation, things cannot simply be left to the market or the contractual situation:"It will be neither fair nor just. The bottom of the market has literally fallen off and the normal assumptions of business are gone. Every business should plan for some severe shock, but almost none could have prepared for this."
Under the Bill, a contracting party wishing to claim relief must give notice to the other party, who is then prohibited from certain types of actions including commencing or continuing legal action, eviction due to non-payment of rent, or repossession of goods used for business.The measures do not mean that all tenants do not have to pay rent, for example."Those who have the ability to make rental payments must continue to do so," he said.
For events that cannot proceed due to Covid-19, the Bill will ensure that deposits are not automatically forfeited. But it does not mandate that deposits be refunded immediately, stressed Mr Shanmugam:"If we ask all companies to immediately refund, there could also be serious trouble." Ultimately, the hope is that contracting parties can come to fair agreements. In the case of disputes, assessors appointed by the Ministry of Law will make a determination.
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