The so-called re-align framework which the Singapore parliament issued in November last year, effective as of 15th January this year, has enabled small enterprises hit hard by the Covid-19 pandemic to renegotiate certain kinds of contract.
The re-align framework is intended to provide small businesses with the mechanism to re-negotiate contracts which have seen a decline in monthly average gross earnings of at least 70% during the period from July to December 2020, as compared with the same period during 2019. Small businesses are granted a six week window during which to re-negotiate the terms of their contracts, with the aim being to bring their contracts into line with current commercial conditions.
The first step under the framework is for the small business to issue a negotiation notice and supporting documents to their contractual counterparty before the deadline date of 26th February this year.
Thereafter, the counterparty to the relevant contract can file an objection under the re-align scheme within two weeks from the close of the re-negotiation period. If no such objection is raised, and two days after the objection period has ended, the contract can then be terminated.
The framework also allows for the parties to a contract to revise the terms of their contract, rather than request for its termination.
This post is for information purposes only. It is not intended to constitute legal advice. For legal advice in this context, please contact the author.
Emerging Markets Law and Business 