Are “Pay When Paid” Provisions Unenforceable under the SOPA Even for Terminated Contracts?

In Frontbuild Engineering & Construction Pte Ltd v JHJ Construction Pte Ltd [2021] SGHC 72, the Singapore High Court considered the issue of whether certain provisions take primacy over the other provisions in the Building and Construction Industry Security of Payment Act (“SOPA“). In particular, section 4(2)(c) provides that the SOPA will not apply to a terminated contract in the specified circumstances, while section 9 renders “pay when paid” provisions in a construction contract unenforceable and of no effect. 

The Court held that section 4(2)(c) does not take primacy over section 9. Therefore, if a contractual provision engages both section 9 and section 4(2)(c), the Court will first consider if the provision is rendered unenforceable under section 9; if the provision is not found to be unenforceable, the Court will then consider if section 4(2)(c) applies to exclude the application of the SOPA.