Frustrated Contracts by Covid-19 Impacts

Abstract

This paper aims to identify the elements and rules to invoke the doctrine of frustration in contracts affected by Covid-19 Restrictions. Another objective is to determine the validity of invoking a force majeure clause as a frustrated event to discharge parties from their obligations. Next, is to examine the available remedies as based on the Contracts Act 1950 and the recently enforced Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) ACT 2020. The problem statement is whether Covid-19 Restrictions is an unforeseeable event that renders the contract to be wholly impossible to perform? The legal methodology used in this study is the Legal Doctrinal Approach derived from legal sources such as case laws and statutes and other legal sources. A non-doctrinal approach is also applied to observe the cause and effect of Covid-19 Restrictions to the performance of contracts. This study will provide the relevant rules and satisfactory conditions in invoking the doctrine of frustration to an unforeseeable event such as Covid-19 Restrictions. This study will also illustrate the possible conditions in applying Covid-19 Restrictions and other events as an unforeseeable event applicable to Force Majeure Clauses. The remedies from legislation to frustrated contracts as provided in the Contracts Act 1950 and the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) ACT 2020 will be analysed to adduce its’ applicability to frustrated contracts by virtue of Covid-19 Restrictions. The International Guidelines for force majeure clauses will be examined and extracted to determine its validity to be applied in Covid-19 Restrictions.