Sarah Kambali and Marcus Leong speak on Force Majeure & Frustration of Contract in Sale and Purchase Agreements and Transaction

MahWengKwai & Associates’ Online Talks are organised during the Movement Control Order (“MCO”) period to inculcate our clients and the public the knowledge and awareness on the legal issues and promote networking.

On 15 April 2020, our Partner, Sarah Kambali together with our Associate, Marcus Leong, from the firm’s Real Estate Practice Group spoke on “Force Majeure & Frustration of Contract in Sale and Purchase Agreements and Transaction”. In the talk, the focus was on force majeure and the doctrine of frustration in agreements such as Sale and Purchase Agreements and Tenancy Agreements. With a better understanding of these two concepts, one may be able to apply to the situation during this MCO period.

In her presentation, Sarah started by providing the definitions of force majeure and the doctrine of frustration of contract. She laid out the elements for the two legal concepts and the application in a contract. Sarah also provided a sample force majeure clause to illustrate the application of the said clause. As for the doctrine of frustration, she had made reference to the case of Guan Aik Moh (KL) Sdn Bhd v Selangor Properties Bhd [2007] 4 MLJ 201; whereby there were three elements that must be fulfilled for a successful application of Doctrine of Frustration. These elements were:-

1. the event which frustrated the contract;
2. not a responsibility of either party;
3. the event which is said to discharge must be radically different from that which was undertaken by the contract.

In the second part of the talk, Marcus had presented the parties that could be affected by the initiation of MCO. Thereafter, Marcus also explained the possibility of time extension in Sale and Purchase Agreements and Tenancy Agreements due to MCO period. At the end of the talk, Marcus shared the application of force majeure and frustration of contract through case laws.

A copy of the talk slides in PDF format is available for download here. A video recording of the talk can also be found on our Youtube channel here.