Individuals and businesses who are unable to fulfil their contractual obligations due to the Covid-19 pandemic and safe distancing measures can now get legal reprieve for six months as provisions under the Covid-19 (Temporary Measures) Act commenced yesterday.

These provisions seek to protect and help companies and owners focus on rebuilding their businesses rather than fighting litigation or bankruptcy proceedings.

The Act covers contracts for rentals in the industrial and commercial sectors, construction and supply contracts, as well as certain secured loan facilities granted by a bank or a finance company to small and medium-sized enterprises.

Contracts for events such as weddings and conferences, as well as in tourism, such as cruise and hotel bookings, are also covered. Deposits for such contracts cannot be automatically forfeited if the event or trip cannot proceed.

Certain hire-purchase agreements are also covered. For example, a vehicle cannot be repossessed if a private-hire driver is unable to pay the instalment on his car loan.

Only contractual obligations that are to be performed on or after Feb 1 and contracts that were entered into before March 25 are covered.

The relief period will be for six months, from April 20 to Oct 19, said the Ministry of Law (MinLaw) yesterday. This may be extended by another six months later.

Meanwhile, thresholds for bankruptcy and insolvency will also be increased temporarily until Oct 19.

The amount of debt a person must owe before he may be made bankrupt is increased from $15,000 to $60,000.

The monetary threshold for corporate insolvency will be increased from $10,000 to $100,000.

The time period to satisfy a statutory demand from creditors will also be increased from 21 days to six months.

HOW DO I SEEK RELIEF FOR MYSELF OR MY BUSINESS?

Those who are unable to fulfil their contracts because of Covid-19 are encouraged to first negotiate with the other party to resolve the matter, said MinLaw.

If they require protection from legal proceedings and wish to obtain relief under the Act, they should:

• Confirm that they are eligible for relief on MinLaw's website.

• Serve a notification for relief on the other party or parties of the contract, using the form on the website.

After the notification is served, the other parties of the contract cannot take certain types of action to enforce the obligation during the period of relief, such as commencing or continuing an action in court.

WHAT IF PARTIES CANNOT REACH A MUTUAL AGREEMENT?

There may be disagreements over whether Covid-19 is the cause of a party's non-performance. In such cases, parties should first discuss, understand each other's positions and try to reach a mutual agreement, said MinLaw.

If they are unable to do so after a notification of relief is served, either party can make an application for free to the ministry-appointed panel of assessors.

An assessor will decide on a just and equitable outcome in the circumstances, said MinLaw.

Parties will not be allowed to be represented by lawyers in proceedings, which will mostly be held by e-mail, unless the assessor feels there is a need for a hearing to be conducted over video conference or in person, said MinLaw.

Parties will later be informed of the assessor's decision, which is binding on the parties and cannot be appealed against.

• More information can be found at http://www.mlaw.gov.sg/covid19-relief