Part of a comprehensive analysis of the COVID-19 (Temporary Measures) Act 2020
All Parts in This Series
- PART 1
- PART 2 (this article)
- PART 2
- PART 3
- PART 4
- PART 5
- PART 6
- PART 7
- PART 8
- PART 8
- PART 8
- PART 8
- PART 9
- PART 10
- PART 10
- Part 10
- Part 10
Key Provisions and Their Purpose under the COVID-19 (Temporary Measures) Act 2020
The COVID-19 (Temporary Measures) Act 2020 was enacted to provide temporary relief to parties affected by the COVID-19 pandemic, particularly in contractual relationships. The Act introduces specific provisions aimed at mitigating the impact of the pandemic on contractual obligations and rights, ensuring fairness and stability during unprecedented disruptions.
Section 5 of the Act provides temporary relief from actions for inability to perform scheduled contracts caused by a COVID-19 event. It applies where a party (referred to as "A") is or will be unable to perform an obligation on or after 1 February 2020 due to the pandemic. The purpose of this provision is to protect parties from being penalised for non-performance when such failure is materially caused by COVID-19, thereby preventing unjust enforcement actions.
"This section applies to a case where — (a) a party to a scheduled contract (called in this Division A) is or will be unable to perform an obligation in the contract (called in this Division the subject inability), being an obligation that is to be performed on or after 1 February 2020; (b) the inability is to a material extent caused by a COVID‑19 event; and (c) A has served a notification for relief in accordance with section 9(1)..." — Section 5, COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Section 5A extends relief to situations where a party is unable to exercise a right under a scheduled contract due to a COVID-19 event. This provision recognises that the pandemic may prevent parties from exercising contractual rights, such as termination or renewal options, and seeks to provide equitable relief in such cases.
"This section applies to a case where — (a) the scheduled contract in question comes within a description of contracts prescribed as contracts to which this section applies; (b) a party to the contract (also called in this Division A) is or will be unable to exercise a right in the contract (called in this Division the subject right), being a right that is to be exercised on or after 1 February 2020; (c) the inability is to a material extent caused by a COVID-19 event; and (d) A has served a notification for relief in accordance with section 9(1)..." — Section 5A, COVID-19 (Temporary Measures) Act 2020
Verify Section 5A in source document →
Section 6 provides additional relief specifically for construction or supply contracts. It restricts the ability of the other party ("B") to call on performance bonds or equivalents prematurely, recognising the unique challenges faced by the construction and supply sectors during the pandemic. This provision aims to prevent undue financial pressure on parties unable to perform due to COVID-19.
"Despite anything in a performance bond or equivalent given pursuant to the construction contract or supply contract, B may not make a call on the performance bond or equivalent in relation to the subject inability at any time earlier than 7 days before — (a) the date of expiry of the performance bond or equivalent as stated in the performance bond or equivalent; or (b) where the term of the performance bond or equivalent is extended whether under subsection (3) or otherwise, the date of expiry of the performance bond or equivalent following such extension." — Section 6(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 6 in source document →
Section 7 addresses event or tourism-related contracts, prohibiting forfeiture of deposits due to inability to perform caused by COVID-19. This protects consumers and businesses in these sectors from losing deposits unfairly during the pandemic.
"Despite any law or anything in the contract, another party to the contract may not, after being served with the notification for relief in accordance with section 9(1), at any time (whether during or after the prescribed period) forfeit any deposit (or part of any deposit) taken under the contract on the basis of the subject inability..." — Section 7(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 7 in source document →
Section 7A limits the liability for late payment interest or other charges arising from inability to pay money due to COVID-19. It caps the interest or charges at a prescribed rate or amount, preventing excessive financial burdens on affected parties.
"Where the contract requires A to pay B any interest or other charge (however described) for the subject inability, then, despite anything in the contract, A is only liable under the contract to pay B interest or other charge not exceeding the prescribed rate (as computed in the prescribed manner) or prescribed amount in respect of the subject inability." — Section 7A(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 7A in source document →
Section 7B provides relief for lessees or licensees of non-residential immovable property, allowing them to hold over after termination or expiry of leases or licences due to COVID-19. This provision aims to prevent sudden eviction or loss of premises when tenants are unable to fulfil contractual obligations due to the pandemic.
"Despite any law or anything in the contract, if — (a) the subject inability is caused by a COVID-19 event; and (b) such conditions as may be prescribed are also satisfied, then the lessee or licensee is not liable to pay the lessor or licensor any sums that the lessee or licensee is otherwise liable to pay under the law or contract for the inability, in excess of such amount as may be prescribed." — Section 7B(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 7B in source document →
Section 8 establishes penalties for contravention of the relief provisions, imposing fines up to $1,000 for non-compliance. This ensures adherence to the Act and deters parties from taking unfair advantage during the pandemic.
"Any person who, without reasonable excuse, contravenes section 5(2), 5A(2), 6(2), 7(2) or (3) or 7A(5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000." — Section 8(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 8 in source document →
Sections 9 to 17 set out procedural requirements for notification of relief, appointment and powers of assessors, confidentiality obligations, and protections for officials. These provisions ensure a structured and fair process for parties seeking relief, balancing transparency with privacy.
"If a party to a scheduled contract (called in this section A) intends to seek relief under section 5, 5A or 7, A must... serve a notification for relief that contains the prescribed information on — (a) the other party or parties to the contract; (b) any guarantor or surety for A’s obligation in the contract; and (c) such other person as may be prescribed." — Section 9(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 9 in source document →
"For the purposes of appointing assessors under section 11 to determine applications, the Minister is to appoint a Registrar of assessors." — Section 10(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 10 in source document →
"On an application for an assessor’s determination, the assessor must — (a) make a determination whether the case in question is one to which section 5 or 5A (as the case may be) applies; (b) in a case mentioned in section 5A — also make a determination whether it is just and equitable in the circumstances of the case..." — Section 13(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 13 in source document →
Finally, Section 19 empowers the Minister to make regulations necessary for implementing the Act, allowing flexibility to address evolving circumstances.
"The Minister may make regulations for or with respect to any matter that is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Part." — Section 19(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 19 in source document →
Definitions in the COVID-19 (Temporary Measures) Act 2020
Understanding the key terms used in the Act is essential for interpreting its provisions correctly.
The term "scheduled contract" is broadly defined to include contracts to which the Government is a party, ensuring that government contracts are also subject to the relief measures.
"A reference to a scheduled contract in this Act includes one to which the Government is a party." — Section 4(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 4 in source document →
"A" refers to a party to a scheduled contract who is or will be unable to perform an obligation or exercise a right due to a COVID-19 event. This designation is crucial for identifying the party entitled to seek relief.
"This section applies to a case where — (a) a party to a scheduled contract (called in this Division A) is or will be unable to perform an obligation in the contract (called in this Division the subject inability)..." — Section 5(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
"B" denotes the other party to the contract, who may be affected by the relief granted to "A".
"Despite any law or anything in the contract, another party to the contract (called in this Division B) may not take any action described in subsection (3) in relation to the subject inability..." — Section 5(2), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
"Subject inability" means the inability to perform an obligation in the contract, while "subject right" refers to the inability to exercise a right in the contract. Both terms are central to determining the scope of relief.
"This section applies to a case where — (a) the scheduled contract in question comes within a description of contracts prescribed as contracts to which this section applies; (b) a party to the contract (also called in this Division A) is or will be unable to exercise a right in the contract (called in this Division the subject right)..." — Section 5A(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 5A in source document →
"COVID-19 event" is the cause of the inability to perform or exercise rights materially, anchoring the relief provisions to pandemic-related disruptions.
Penalties for Non-Compliance with the Act
The Act imposes penalties to ensure compliance and uphold the integrity of the relief framework.
Section 8(1) specifies that any person who, without reasonable excuse, contravenes key relief provisions such as sections 5(2), 5A(2), 6(2), 7(2) or (3), or 7A(5) shall be guilty of an offence and liable on conviction to a fine not exceeding $1,000. This penalty deters parties from disregarding the temporary relief measures.
"Any person who, without reasonable excuse, contravenes section 5(2), 5A(2), 6(2), 7(2) or (3) or 7A(5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000." — Section 8(1), COVID-19 (Temporary Measures) Act 2020
Verify Section 8 in source document →
Section 13(11) imposes a similar fine for failure to comply with further determinations made by an assessor, ensuring that parties adhere to the dispute resolution process established by the Act.
"A person who, without reasonable excuse, fails to comply with a further determination made by an assessor under subsection (3) or (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000." — Section 13(11), COVID-19 (Temporary Measures) Act 2020
Verify Section 13 in source document →
Section 13(12) penalises failure to restore deposits as determined by an assessor, reinforcing the protection of parties’ financial interests.
"A person who, without reasonable excuse, fails to restore an amount of a deposit determined by an assessor to be restored shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000." — Section 13(12), COVID-19 (Temporary Measures) Act 2020
Verify Section 13 in source document →
Section 15A(3) addresses breaches of confidentiality obligations imposed on assessors and related persons, with fines up to $1,000 to safeguard sensitive information.
"A person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000." — Section 15A(3), COVID-19 (Temporary Measures) Act 2020
Verify Section 15A in source document →
Cross-References to Other Legislation
The Act interacts with various other statutes to provide a comprehensive legal framework for managing contractual disruptions due to COVID-19.
For example, Section 5(3)(b) references the Arbitration Act (Cap. 10), restricting the commencement or continuation of arbitral proceedings against a party seeking relief.
"(3)(b) the commencement or continuation of arbitral proceedings under the Arbitration Act (Cap. 10) against A or A’s guarantor or surety;" — Section 5(3)(b), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Section 5(3)(e) refers to the Companies Act (Cap. 50), particularly applications for creditor meetings to approve compromises or arrangements, reflecting the Act’s impact on insolvency and restructuring processes.
"(e) the making of an application under section 210(1) of the Companies Act (Cap. 50) for a meeting of creditors to be summoned to approve a compromise or an arrangement in relation to A or A’s guarantor or surety;" — Section 5(3)(e), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Bankruptcy proceedings are also addressed, with Section 5(3)(h) restricting bankruptcy applications against parties seeking relief.
"(h) the making of a bankruptcy application against A or A’s guarantor or surety;" — Section 5(3)(h), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Section 5(9)(a) and (c) incorporate provisions from the Bankruptcy Act (Cap. 20) and the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018), ensuring consistency with insolvency timelines and procedures.
"(9)(a) each period mentioned in sections 100(1)(a), (b) and (c) and 103(2) of the Bankruptcy Act (Cap. 20) (as applied by section 329 of the Companies Act, or section 329 of the Companies Act as applied by section 130 of the Variable Capital Companies Act 2018 (Act 44 of 2018));" — Section 5(9)(a), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
"(9)(c) each period mentioned in section 226(1)(a), (b) and (c) of the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) (including that provision as applied by section 130 of the Variable Capital Companies Act 2018);" — Section 5(9)(c), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Enforcement actions under the Building and Construction Industry Security of Payment Act and awards from arbitral tribunals are also referenced, highlighting the Act’s broad applicability.
"(n) the enforcement against A or A’s guarantor or surety of a judgment of a court, an award made by an arbitral tribunal in arbitral proceedings conducted under the Arbitration Act, or a determination by an adjudicator under the Building and Construction Industry Security of Payment Act;" — Section 5(3)(n), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
The Act clarifies that it does not affect actions under the Frustrated Contracts Act (Cap. 115) or force majeure clauses, preserving existing legal remedies outside the temporary measures.
"This section does not affect the taking of any other action in relation to the subject inability, including an action pursuant to the Frustrated Contracts Act (Cap. 115) or a force majeure clause in the contract where applicable." — Section 5(13), COVID-19 (Temporary Measures) Act 2020
Verify Section 5 in source document →
Additionally, Section 16 treats Registrars and assessors as public servants under the Penal Code (Cap. 224) when exercising their powers, ensuring accountability.
"The Registrar or an assessor who, in the course of his or her duties under this Part, exercises any power as such, is treated as a public servant for the purposes of the Penal Code (Cap. 224) when exercising such power." — Section 16, COVID-19 (Temporary Measures) Act 2020
Verify Section 16 in source document →
Conclusion
The COVID-19 (Temporary Measures) Act 2020 provides a targeted and balanced legal framework to address contractual disruptions caused by the pandemic. Its key provisions offer temporary relief from performance obligations and rights, protect deposits and financial interests, and impose penalties to ensure compliance. The Act’s integration with other legislation ensures coherence within Singapore’s legal system, while procedural safeguards promote fairness and transparency. These measures collectively aim to mitigate the economic impact of COVID-19 and support contractual parties in navigating the challenges posed by the pandemic.
Sections Covered in This Analysis
- Section 4(2)
- Section 5(1), (2), (3), (9), (13)
- Section 5A(1), (2)
- Section 6(2)
- Section 7(2), (3)
- Section 7A(2), (5)
- Section 7B(2)
- Section 8(1)
- Section 9(1)
- Section 10(1)
- Section 13(1), (11), (12)
- Section 15A(3)
- Section 16
- Section 19(1)
Source Documents
For the authoritative text, consult SSO.