Proposed Law May Help Singapore’s Small Firms That Have Been Affected by the Pandemic
A new law in Singapore may help small firms by allowing them to renegotiate deals and exit contracts without penalties, depending on the situation.
This is because the business landscape has completely changed this year due to the Covid-19 pandemic. The smaller business is the ones that have been hit the most. Therefore, a proposed new law will allow small firms the opportunity to terminate contracts deemed unviable with minimal penalties.
These Singapore companies may be able to renegotiate some commercial contracts under the proposed new law. If no agreement can be achieved, the contract can be terminated without penalties. However, companies are still liable for any debts and outstanding obligations.
The New Proposed Law in Parliament
The Government will only intervene when necessary and in exceptional circumstances. The new proposed law is based on the basis that circumstances have changed significantly because of Covid-19. The proposed law has been tabled in Parliament.
Commercial contracts will be covered by the new framework and only applicable to small businesses. These businesses must have been badly impacted by the COVID-19. Applicable contracts are only those started before March 25 before the impact of the pandemic. Commercial contracts include property leases, rental or hire-purchase deals for commercial equipment and vehicles, and sale and purchase of goods and services among other things. Consumer, employment and insurance contracts will not be covered.