Singapore construction firms are reported to be seeking legal advice about invoking force majeure clauses in building contracts as a result of a labour shortage due to the coronavirus.
Force majeure can be defined as unforeseeable circumstances that prevent someone from fulfilling a contract – in this instance Singapore construction firms not being able to complete work on time due to a lack of Chinese workers due to coronavirus.
Original Article: Coronavirus Affecting Singapore Construction Firms
The article originally posted in the KHL International Construction summarizes some of the struggles that construction companies are starting to feel within the construction industry as a result of the Coronavirus (COVID-19).
Many of you may have read about the Coonavirus and the effect it is having on areas within China and throughout the world. China has implemented work stoppages and quarantines to help reduce the spread within the general public.
These efforts however have led to many factories being shut down and as a result are starting to disrupt manufacturers.
Hitting Close To Home (North America)
The reason I chose this article to focus on this week is that my team and I were impacted by this for the first time this week. The steel fabricator on one of our projects has had to move the production of steel anchor bolts to North America as the factory in China has been shut down.
While the above is just a small example, many products come out of China from steel to glass to aluminum extrusions. The move to North America means that the price of the product just went up – the question then becomes who’s responsible for paying that increase?
Many common contract types contain language surrounding acts of god but don’t explicitly call out viruses and their interruption on the supply chain. This could lead to ambiguous and challenging situations. In an ever evolving world where risk of virus spreading is higher maybe it’s time to include this in contracts?
Given that a number of construction firms are looking at how to deal with the coronavirus (COVID-19) this is becoming a trend. If you do believe that one of your projects is at risk of being affected I would recommend you sit down with your council and owner in advance to have a conversation about how the impacts will be mitigated.
Is your construction project being affected by Coronavirus (COVID19)? If so in what way?