In forceUpdated to 1 Jul 2026

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COVID-19 (Temporary Measures) Act 2020 · Updated to 1 Jul 2026 · Part 2 · Temporary Relief for Inability to Perform Contracts

6. Additional relief for inability to perform construction contract or supply contract

(1)

This section applies to a case mentioned in section 5 where the scheduled contract is a construction contract or supply contract and (to avoid doubt) does not limit the operation of that section.

(2)

Despite anything in a performance bond or equivalent given pursuant to the construction contract or supply contract, B may not make a call on the performance bond or equivalent in relation to the subject inability at any time earlier than 7 days before —

(a)

the date of expiry of the performance bond or equivalent as stated in the performance bond or equivalent; or

(b)

where the term of the performance bond or equivalent is extended whether under subsection (3) or otherwise, the date of expiry of the performance bond or equivalent following such extension.

(3)

Despite anything in a performance bond or equivalent given pursuant to the construction contract or supply contract, where —

(a)

A makes an application to the issuer of the performance bond or equivalent not less than 7 days before the date of expiry of the performance bond or equivalent, to extend the term of the performance bond or equivalent; and

(b)

A serves a notice of the application on B at the same time, then the term of the performance bond or equivalent is extended to a date that is 7 days after the end of the prescribed period, or such other date as may be agreed between A, B and the issuer, and that date or other date (as the case may be) is treated as the date of expiry of the performance bond or equivalent.

(4)

Subsection (2) does not apply —

(a)

after A has withdrawn A’s notification for relief; or

(b)

on an application under section 9(2), after the assessor makes a determination that the case in question is not one to which section 5 applies,and A may not thereafter make an application to the issuer of the performance bond or equivalent for an extension of its term under subsection (3).

(5)

Despite anything in the contract, for the purposes of calculating the liquidated damages payable under the contract or assessing other damages in respect of the subject inability, where the subject inability occurs on or after 1 February 2020 but before the expiry of the prescribed period, any period for which the subject inability subsists and falling within that period is to be disregarded in determining the period of delay in performance by A.

(6)

Despite anything in the contract, where the subject inability is the inability to supply goods or services in accordance with the terms of the contract and such inability occurs on or after 1 February 2020 but before the expiry of the prescribed period, the fact that the inability to perform the obligation in the contract was to a material extent caused by a COVID‑19 event is a defence to a claim for a breach of contract in respect of the subject inability.

(7)

To avoid doubt, subsection (6) does not affect —

(a)

any right or obligation under the contract that accrues or arises at any time before or after the period mentioned in subsection (6); or

(b)

any judgment, arbitral award, adjudication determination under the Building and Construction Industry Security of Payment Act, compromise or settlement given or made before the service of the notification for relief.