Temporary relief for businesses and individuals unable to fulfil contractual obligations
Temporary relief for businesses and individuals unable to fulfil contractual obligations
Business owners and engaged couples to note
min read Published on 07 Apr 2020
'' You're looking at economic devastation. Businesses destroyed, people's lives ruined, and in such a situation, you don't talk contract. You talk equity, you talk justice, you talk about what is the right thing to do. ''
- Minister for Law and Home Affairs, K Shanmugam, in an interview with CNBC on 7 April 2020

The evolving COVID-19 pandemic has had unforeseen economic impact, making it difficult for businesses and even individuals – such as soon-to-be married couples – to fulfil their contractual obligations.

If you are a business owner or an individual who has entered into a contractual agreement recently (see below for list of contracts covered) and experiencing difficulties fulfilling your obligations due to COVID-19, the Ministry of Law has introduced a new law that offers you temporary relief from legal action, on a just and equitable basis, for six months.

Read on to find out how the new law may help.

How will the new law help me?

[Commercial & Industrial Property Leases] If you are a tenant unable to pay rent:

Your landlord cannot terminate your lease.

[Construction & Supply contracts] If you are a contractor, who is unable to meet deadlines:

Your contractual obligations will be deferred.
There will be no liability for non-performance of contract due to COVID-19.

[Event- and Tourism-related contracts] If you are unable to proceed with an event, e.g. wedding, conference, tour:

Your deposit cannot be automatically forfeited.
The refund of the deposit will be treated fairly, taking into account any expenses incurred by the service provider.

[Certain Secured Loan Facilities] If you are an SME owner, who is unable to repay a secured loan:

No enforcement of security (i.e. over commercial or industrial property, plant or machinery used for business) located in Singapore.

Court and insolvency proceedings will be disallowed.

[Hire-purchase & conditional sales agreement] If you are a hirer or buyer who is unable to pay instalment:

Goods used for commercial purposes cannot be repossessed.

Court and insolvency proceedings will be disallowed.

What about bankruptcy and insolvency?

The new law will temporarily increase the monetary thresholds and time limits for bankruptcy and insolvency.


Temporary relief from bankruptcy/insolvencyMonetary threshold
For individualsFrom $15,000 to $60,000
For businesses (companies/partnerships)From $10,000 to $100,000


Watch: Minister for Law and Home Affairs, K Shanmugam, details the temporary relief bill for individuals and businesses affected by COVID-19:



What is the timeframe covered?

The new law covers contractual obligations that are to be performed on or after 1 February 2020, for contracts entered into or renewed before 25 March 2020.

The new measures will be in place for 6 months, and may be extended for up to a year depending on the COVID-19 situation.

How can I be sure that I will be fairly treated?

Assessors will be appointed by the Minister for Law to resolve disputes related to the new law.

These assessors will decide if your inability to perform contractual obligations was due to COVID-19. They will also have the powers to grant reliefs that are just and equitable.

What do I need to do?

A notification for relief is required. The Ministry of Law will share more details on the process to get relief and resolve disputes in end April 2020.

The process will be affordable, fast, and simple. Parties will not be allowed to be represented by lawyers, and there will be no costs orders. The assessors’ decisions will also be final and not appealable.

For details, refer to the Ministry of Law’s website.