MahWengKwai & Associates’ Online Talks are presented by video conference to inculcate knowledge and awareness for our clients, potential clients and in-house counsel.
On 27 April 2020, our Senior Associate, Cassandra Nicole Thomazios together with Associate, Tommy Wong, from the firm’s Corporate Department spoke on “Dealing with the Impact of the Movement Control Order (MCO) on Commercial Contracts”.
Tommy began the presentation by briefly discussing the impact of the MCO on businesses and addressed common questions typically faced by parties to a commercial contract. Thereafter, Tommy provided an in-depth overview on Force Majeure, the doctrine of frustration and both the methods and effect of termination in commercial contracts. The importance in deciphering the wordings of force majeure clauses in commercial contracts was highlighted as each commercial contract is different.
Subsequently, Cassandra explored the prospects of parties to renegotiate the terms and conditions of an existing contract in light of the current pandemic and restrictions in place. She further highlighted that upon successful re-negotiation between the parties of a pre-existing contract, parties should enter into a new or supplemental agreement to either revoke the original agreement or to modify, vary or amend the existing agreement. Alternatively, parties can enter into a settlement agreement upon re-negotiation of payment terms to reflect an off-set or reduced payment sum.
At the end of the presentation, Cassandra and Tommy addressed various questions raised by the participants, including the nature of force majeure clauses, the absence of a termination clause in contracts as well as the necessity to record varied terms of existing contracts in writing.