Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu
force majeure mco

FORCE MAJEURE DURING MOVEMENT CONTROL ORDER

Does force majeure clause in an SPA applies during Movement Control Order (“MCO”) to extend time under an SPA?

Most sale and purchase agreements (“SPA”) (including Schedule H and G SPA) and proforma
sale form do not have force majeure clause which allow termination, non-performance or delay of performance of the terms by reason of acts of God, war, flood, fire, epidemics etc.

In any event, the existence of a force majeure clause in a developer’s SPA (which has to comply with Schedule H or G of the Housing Development (Control & Licensing) Regulations 1989 (“HDR 1989”) was previously held by the Federal Court to be void. In short, an epidemic does not relieve the developer’s duty to complete the construction of building within the stipulated timeframe.

However, a sub-sale SPA may contain a force majeure clause.

Sample force majeure clause

“No party shall be liable to the other for any failure to fulfill any terms of the agreement if such fulfillment is delayed, hindered or prevented by force majuere including but not limited to Acts of God strikes lockouts riots civil commotion epidemics acts of war or failure to obtain any necessary approval of any local or other appropriate authority or any other circumstances of whatsoever nature beyond the control of the party”.

If there is such clause in your SPA, you may rely on Covid-19 pandemic and MCO to avoid the application of the terms in an SPA; including but not limited to extension of time and non-performance during this period.

Back to Latest Legal Updates

Recent Post

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »
17 11 月 ,2024 尚無留言

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »
17 11 月 ,2024 尚無留言

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »
17 11 月 ,2024 尚無留言

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »
17 11 月 ,2024 尚無留言

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
17 11 月 ,2024 尚無留言
zh_TWZH
en_USEN ms_MYMY zh_TWZH
× 联系我们