Abstract:

The Corona Virus Disease 2019 (hereinafter referred to as ‘COVID-19’) pandemic has substantially disrupted the global economic activities in drastic ways. Many affected businesses are finding themselves asking questions regarding their contractual obligations. Whether a contract caters for the current unprecedented environment will depend on the terms and wording of the contract. The study found that as parties have the ability to negotiate the scope and definition of “force majeure” in their contracts, courts will be reluctant to extend the provision to cover events not expressly provided for in the provision. The 1950 Contracts Act does not allow for terms which are implied. The parties are obligated to adhere to the terms and conditions of the contract and to perform their contractual responsibilities as set out in the agreement. If a contract is signed, the parties' intention must be contained inside the four walls of the contract documents. Thus, if any parties wish to terminate the agreement, it will subject to penalties or parties may have to negotiate to find out the best solution. This is qualitative study that involves a systematic study of philosophical and academic views though literatures. Therefore, this study is not an empirical study but rather a library study from various primary data sources such as Contracts Act 1950, cases law and secondary data sources namely articles and journals from online database.