Is FM recognized in statute? If yes, what is impact of statutory rules on FM clauses in contracts?
No statutory recognition.
FM remedies pursuant to contract?
Yes. Availability of remedies depends on the terms agreed between the parties. FM clauses are construed according to contract law principles under the common law.
Formalities to invoke?
Depends on the wording of the FM clause. If the FM clause requires any steps to be taken to invoke it, such steps should be followed. Generally:
- FM event must be within the scope of the FM clause
- FM event is beyond the party's control
- Performance of the obligations would be substantially or materially interfered with or affected by it.
Any obligation to mitigate?
Depends on the wording of the FM clause. Generally, the affected party is required to use reasonable endeavours or diligence to overcome or mitigate the impact of the FM event.
What is the outcome of invoking FM?
Depends on the specific wording of the FM clause. An outcome might include an extension of time to perform obligations under the contract or excuse an affected party from performing at all allowing the other party to terminate the contract. If performance is merely postponed until the FM event ceases, then the invoking party would be considered to be merely suspending performance of the contract.
Any other concepts/remedies?
If the contract does not contain an FM clause or the FM event is outside the scope of the clause, then parties may have to ascertain whether the common law doctrine of frustration applies to discharge contractual obligations. The doctrine of frustration has a high threshold in Singapore: the event must be a supervening event resulting in performance being physically or legally impossible, or fundamentally different from the originally undertaken performance.