Construction contracts or supply contracts, or any performance bond granted thereto
- For more information about the relief under the Act for construction and supply contracts, please refer to the Ministry of Law and Building and Construction Authority’s joint statement on 20 April 2020, and the FAQs on BCA’s website.
1. What types of construction or supply contracts are covered by the Act?
- Construction and supply contracts within the meaning of section 2 of the Building and Construction Industry Security of Payment Act (Cap. 30B)(“BCISOPA”) are covered. For the avoidance of doubt, the Act covers contracts which are excluded from the application of the BSCISOPA pursuant to section 4 of the BCISOPA (e.g. renovation contracts for private residential property), except contracts to the extent that a party carries out construction work or supply goods or services as an employee (within the meaning of the Employment Act (Cap. 91)).
2. I am a party to a construction or supply contract. What reliefs under the Act are applicable to me?
First, if you are unable to perform your obligations due to COVID-19, the other party to the contract cannot commence or continue court proceedings or insolvency proceedings against you during the prescribed period (i.e. up to 19 October 2020). For the avoidance of doubt, adjudication proceedings under the BCISOPA will remain available to the relevant parties during the prescribed period.
Second, if you are a contractor who is unable to supply goods or services due to Covid-19, the Act gives you a defence against any claims for breach of contract or damages (e.g. liquidated damages) due to that inability to perform the obligation.
- This defence is available to you only after you have served the Notification for Relief during the prescribed period. It may be raised separately in dispute resolution proceedings – in adjudication (under the BCISOPA), arbitration or court proceedings between the relevant parties, separate from the regime under the COVID-19 Act.
For the avoidance of doubt, under the Act, the Assessor’s determination is limited to (a) whether the party to the construction or supply contract is unable to perform an obligation; and (b) whether the inability is to a material extent caused by COVID-19. The Assessor would not assess or determine the extent of delay that is attributable to COVID-19, and the amount of liquidated damages or damages payable.
- In addition, under the Act, if you are unable to perform your contractual obligations due to COVID-19, the other party is also prohibited from calling on a performance bond in relation to that inability earlier than 7 days before the expiry of the performance bond, for the prescribed period (i.e. up till 19 October 2020).
3. What must I do to enjoy the reliefs?
The reliefs under the Act do not take effect automatically.
To qualify for the relief, you need to first serve a Notification for Relief on the other party to the contract, using the form at this link (SingPass) or this link (CorpPass).
Once the Notification for Relief has been served on the other party to the contract, the reliefs in FAQ (2) will apply.