Re-negotiating Or Terminating Contracts Under Covid-19: A Malaysian Legal Perspective

The Corona Virus Disease 2019 (hereinafter referred to as ‘COVID-19’) pandemic has substantially disrupted the global economic activities in drastic ways. Many affected businesses are finding themselves asking questions regarding their contractual obligations. However, whether a contract caters for the current unprecedented environment will depend on the terms and wording of the contract. As such, this article intends to study the legal impact of the contracts under Covid-19 in this new normal. This is qualitative study that involves a systematic study of philosophical and academic views though literatures. Therefore, this study is not an empirical study but rather a library study from various primary data sources such as Contracts Act 1950, cases law and secondary data sources namely articles and journals from online database. The study found that whether the parties have a right to terminate or re-negotiate the rights under the contracts entered is very much depends on the contracts of the terms of the contracts. Thus, the parties are advised to check the agreed terms in the contracts to determine the rights of the parties.