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Construction
Contracts:
An Overview
By Ir. Harbans Singh K.S. 1

THE INGENIEUR 6
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A
n engineering/construction
project in its lifetime from
initial inception to
eventual realization (and
subsequently within the limitation
period 2) touches on a whole spectrum
of legal disciplines ranging from
contractual, commercial, civil and the
likes. This may be so despite the fact
that in its nascent and active stages,
it may be basically contractual in
essence. Hence, for a proper
appreciation of the encompassing
legalities when addressing the issue
of construction law, it is prudent to
consider all relevant fields of law such
as the law of contract, law of tort,
civil law, commercial law and public when they relate to buildings and undertaken by the contractor and the
law 3. ‘engineering contracts’ when they relate means by which those obligations
The law of contract forms the core to infrastructure 7, systems 8 and may be varied from time to time; the
of the field of construction law and equipment installations 9 . The time for completion and interim
in due recognition of its significance, distinction between these terms is of control of the progress of the works;
this article has been penned to no legal significance, and indeed the machinery for payment of the
elucidate the basic considerations vis- construction contracts as a class are contractor; supervision of the works
à-vis the species of contracts going regarded by Malaysian law, not as a on behalf of the employer; insurance
under the label of ‘construction separate category of contracts but a against a range of risks; and the
contracts’. The discussion is confined part of the general law of contract. remedies available to the parties in
merely to the essential matters so that In most cases, the only parties to respect of default.
the reader can grasp a ‘macro’ view a construction contract are the The Malaysian construction
of this important subject without Employer and the Contractor 10. industry relies essentially on a
getting bogged down in the intricate However, in actual practice, in all number of types of forms of contract;
details. With brevity and relevance likelihood, a construction project these being notably the standard
in mind, the principal considerations frequently involves a large number forms of contract, modified standard
have been addressed and the reader of contributors or participants who forms of contract and ‘ad hoc’ or
is encouraged to make reference to are contractually interlinked by a ‘bespoke’ forms of contract. The
other legal treatises if a deeper matrix of contractual arrangements. principal standard forms in common
appreciation of the topic is desired. The roles of such contributors are use include those published by the
discussed below. various institutions e.g. the Institution
of Engineers, Malaysia and the
CONTRACTS GENERALLY Forms of Construction Contracts Pertubuhan Akitek Malaysia. For
public sector contracts, the Public
Nature Of Construction Contracts The main matters for which a Works Department 11 has drafted and
construction contract normally makes published an employer’s specific
A construction contract, for the provision are the extent of obligations ‘standard’ set of forms of contract.
purposes of this article, is a contract
under which one party 4 (commonly
called the Contractor) agrees for 1. B.E. (S’pore), P.E., C. Eng., LLB (Hons) London, CLP, DipICArb, Director HSH Consult
valuable consideration to undertake Sdn. Bhd.
to carry out works for another party 2. As statutorily prescribed e.g. Limitation Act 1953 (Rev. 1981), etc.
(commonly called the Employer 5) 3. For international contracts, private international law may be also relevant.
involving design (where applicable), 4. This includes a corporation.
fabrication, erection, alteration, repair 5. Also called ‘the client’ or ‘the purchaser’ or ‘the authority’.
or demolition of structures and/or 6. Land or place which may be allotted or used for the purposes of carrying out the
installations on a site 6 made available work.
by the latter. It covers a whole range 7. Such as highways, airports, harbours, etc.
of contracts i.e. from a simple oral 8. Inclusive of utilities.
agreement to repair a house roof to a 9. Such as mechanical, electrical, telecommunication, heavy engineering, etc.
mega highway contract. Such contracts 10. In a sub-contract, the main contractor is in effect the employer and the sub-
are usually termed ‘building contracts’ contractor is in effect the contractor.
11. or, Jabatan Kerja Raya (JKR).

THE INGENIEUR 7
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Lately, the Construction Industry person or persons may be given


Development Board (CIDB) has issued authority to act as the employer’s
a standard form of contract for agent in supervising the works and
building works 12. These forms of transmitting information and
contract may be used as published, instructions to the contractor; they
but they are frequently amended. A may also be empowered by the
true standard form i.e. one which is construction contract itself to exercise
produced by a body which is certification and other decision-
representative of the industry e.g. the making powers which are binding
Construction Industry Development upon both the employer and the
Board (CIDB), is in principle unlikely contractor.
to attract the operation of the ‘contra The principal contract
proferantum’ principle 13. However, administrator has traditionally been
the position may well be different the engineer or architect responsible
where an employer or contractor for designing the works, although this
repeatedly contracts on the basis of is by no means necessarily so. A
standard form contract containing his recent trend especially in ‘Design and
own amendments 14 or one that is self- Build’ and ‘Management’ types of they are often referred to as
styled as a standard form 15. contracts has been for non- ‘nominated’ where they are selected
Other standard forms of contract professionals such as project by the employer, who then instructs
in used in the construction industry managers, construction managers and the main contractor to enter into the
include those published by particular the like to undertake the said role. In relevant sub-contract 22.
employers e.g. Tenaga Nasional addition, many contracts provide for
Berhad, Putrajaya Holdings, Telekom the appointment of a quantity
Malaysia Berhad and the like for their surveyor to carry out some of the TYPES OF CONTRACT
specific projects and a sprinkling of administrative functions. A sub- PROCUREMENT
foreign forms. The latter include contractor is one who carries out part
those standard forms generated by of the contract, and who works under ■ Traditional General Contracts
bodies such as the Joint Contracts a contract with the main contractor
Tribunal (JCT), the Institution of Civil who is for all intents and purposes of Appearing under various labels
Engineers (ICE), the International the sub-contract, the former’s such as ‘General’ contracts,
Federation of Consulting Engineers employer. A sub-contractor who ‘Employer-design’ contracts and
(FIDIC) and various international supplies only materials but undertakes ‘Design-bid-build’ contracts, these
bodies for use in relation to specialist no work or other services under the contracts are basically characterized
works 16. sub-contract is commonly called a by the separation of the design from
‘supplier’. Sub-contractors and the production or manufacture 23
Roles of the parties suppliers are referred to as ‘domestic’ elements of the contract. Under this
where they are selected by and the contract procurement route, the
In addition to the employer and responsibility of the main contractor; employer causes the design of the
the contractor, the operation of a
construction contract commonly
involves a number of other persons 12. Which includes a Main Contract Form and one for the Nominated Sub-Contract.
not party to the contract itself 17. 13. Union Workshop (Construction) Co. v Ng Chow Ho Construction Co. Sdn. Bhd.
Except where the contractor [1978] 2 MLJ 229.
undertakes to design as well as to 14. Chester Grosvenor Hotel Co Ltd v Alfred McAlpine Management Ltd (1991) 56
construct the works 18, the employer BLR 115. See also Barnard Pipeline Technology Ltd. v Marston Construction Co Ltd
will usually either undertake the [1992] CILL 743.
15. E.g. the JKR or PWD Standard Forms.
design departmentally 19 or
16. Notably the Institution of Electrical Engineers, the Institution of Mechanical
commission the design from a
Engineers and the Institution of Chemical Engineers to name a few.
professionally qualified person e.g.
17. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
architect or engineer whose rights Law and Principles’ at P10-19.
and obligations will be governed by 18. See Design and Build Contracts.
the contract under which he is 19. Example, the Public Works Department by ‘in-house’ designers.
engaged 20. 20. e.g. BEM Standard Form of Agreement (BEM Form 2000 Edn)
Most sizeable construction 21. Called S.O., Engineer, Architect, Employer’s Representative, etc. depending on the
contracts make provision for the form of contract employed.
employer to be represented during the 22. Other common categories of sub-contractors include ‘designated (or named) sub-
progress of the works by one or more contractors, ‘selected’ sub-contractors, ‘specified’ sub-contractors, etc.
contract administrators 21. Such 23. i.e. construction or installation.

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works to be prepared by his Accordingly, the contractor ■ Management contracts
professional designers 24 and then shoulders full responsibility and sole
invites the contractor to tender on liability for the design and A comparatively recent
the basis of the completed design 25. construction elements of the works development on large and complex
The contractor builds or in so far as these are included within projects has been the emergence of
manufactures what the designers the ambit of his obligations. In the ‘management contractor’, whose
have specified. Since the design instances of default or breach by the only role is to manage, co-ordinate
element is within the ambit of the contractor, the onus is not on the and supervise the work of numerous
employer’s obligations, he employer to distinguish the particular specialists by whom the whole of the
accordingly assumes all element involved be this design, construction work is carried out.
responsibility for all design work quality of materials or workmanship Under a modern management
undertaken. The contractor is only or the party actually culpable. His contract, these specialists are
answerable for the building or redress is solely at the contractor’s employed as sub-contractors 35 to the
construction aspects of the works i.e. expense 32. main or management contractor 36,
the quality of materials used and Selection of the contractor is but the latter is relieved of any
workmanship involved in the normally based on competitive responsibility to the employer for sub-
contract. tendering or negotiations and contractor defaults 37. The underlying
Another significant characteristic payment effected on either an interim, philosophy of this species of contract
of this form of procurement is that a milestone or lump sum basis. It is procurement is that the management
single main contractor 26 undertakes common under such an arrangement of the construction process constitutes
total responsibility to the employer to find that the supervisory powers a particular expertise which can be
for all the work under the contract. of the employer’s representative are distinctly identified and accordingly
In so far as parts of the work are in more limited than those of a contract addressed through the employment of
fact carried out by other administrator under a traditional the management contractor. The
organisations, these operate as sub- general contract 33. Hence, unlike latter is for all intents and purposes
contractors to the main contractor traditional general contracting, the not a builder in the strict sense but
and do not enter into direct employer’s representative plays a an independent professional
contractual relations with the limited administrative role which may providing essentially a management
employer 27. However, where sub- be confined to conducting service. This common thread runs,
contractors are selected by the independent checks and auditing the in addition through the construction
employer 28, the main contractor’s contractor’s works. The contractor, management route of contract
responsibility is frequently his sub-contractors 34 and professional procurement 38.
circumscribed and a limited form of advisors are responsible for all aspects Compared to traditional general
contract is entered between the of the works inclusive of managing contracting or design and build types
employer and the chosen sub- the contract up to its final realization. of contracts, management contracting
contractor.

■ Design and Build Contracts


24. either, in-house or external consultants.
A design-and-build contract 29, 25. See JKR 203 and 203A Forms PAM ‘98 With Quantities and Without Quantities
also known as a ‘package deal’ or Edns etc.
‘turnkey contract’ 30, is one under 26. Sometimes called a ‘General Contractor’ or ‘Contractor’ (in short).
which the contractor undertakes both 27. Hence avoiding any privity of contract between the parties.
designing and constructing the 28. Where this is so (as frequently in respect of specialist work) the employer may
contract works, which are to be dictate the terms of the sub-contract as well as the sub-contractor’s identity.
completed in such a way as to meet 29. or ‘Design and Construct’ Contract.
the requirements of the employer 31. 30. ‘Turnkey Contract’ was defined in High Mark (M) Sdn. Bhd. v Patco Malaysia Sdn.
Bhd. [1984] 28 BLR 129
The defining characteristic of this type
31. Such contracts are normally entered into on a lump sum basis.
of contract is the combination of most
32. See Greaves (Contractors) Ltd. v Baynham Meikle and Partners [1975] 4 BLR 56;
(if not all) of the essential tasks of a
[1975] 1 WLR 1095, CA.
project e.g. design procurement, 33. See PWD Form DB/T 2002 Edn.
manufacture, fabrication, production, 34. Who should ideally of the ‘domestic’ type although there is a tendency to include
construction and management into a ‘nominated’ ones.
single package. Taken to the extreme, 35. Popularly called ‘Works Contractors’ or ‘Trade Contractors’.
the arrangement also places the task 36. The management contractor is normally entitled to be reimbursed for all payments
of financing, procuring approvals, made to sub-contractors in addition to his own fee for the management services
complete fitting out, technology- provided.
transfer and the like on the 37. See JCT Management Contract - JCT MC 87.
contractor. 38. See below.

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is unfortunately deficient in the (i) ‘Develop and construct’ contract: There are no published standard
availability of standard forms of this is similar to a design and form contracts governing any of the
conditions of contract. On the local build contract, but a concept above hybrids and the practice is to
level, no particular authority, design is prepared by employ ‘ad hoc’ or ‘bespoke’ forms
institution or body has published any independent professionals customized for the particular project
such form. Hence, there is a tendency engaged by the employer before or application.
to use either ‘bespoke’ forms or the design and build contractor
modified foreign forms such as JCT is selected 46; ■ Term contracts
MC 87 39 or the ICE New Engineering
Contract 40. (ii) ‘Design and manage’ contract: A ‘term contract’ is one by which
This is similar to a management an employer seeks to make provision
■ Construction management contract, but the contractor is for the carrying out of certain
also responsible for detailed categories of work (usually minor
As aptly named, construction design or for managing the works of alteration or repair and/or
management contracts are a sub-set design process; maintenance) during a specified
of the general corpus of management period of time 47. Depending upon the
type of contracts and as such share (iii) ‘Design and construction terms on which tenders are invited
common characteristics with management’ contract: This is and accepted, the resulting legal
management contracts. These have similar to construction relationship may be a contract which
metamorphosed recently into an management but the construction binds the contractor to carry out
alternative to the latter type of manager is also responsible for whatever work of the specified
contracts and are being employed detailed design or for managing description the employer chooses to
mainly on large and complex projects the design process. order during the period stated 48.
having a multiplicity of trades, users
and designers 41 . In essence, a
construction management contract is
an arrangement under which the
employer enters into a direct
contractual relationship with each of
the specialist contractors 42, while at
the same time employing a
‘construction manager’ to provide
managerial and supervisory services
for the project.
The obligations undertaken by the
construction manager in such a case
depend upon the terms of the contract
by which he is employed 43.
Owing to the novelty of this
method of contract procurement,
there is a paucity of standard forms
of conditions of contract available for
use by the local construction industry. 39. JCT Standard Form of Management Contract (1987 Edn).
The tendency is to either employ a 40. ICE New Engineering Contract Option F - Management Contract.
‘bespoke’ form or to use the JCT CM 41. See ‘Construction Management Form - Report and Guidance’ the Centre for
94 Form 44, albeit in a modified form. Strategic Studies in Construction, University of Reading [1991].
42. Also called ‘Trade Contractors’ or ‘Works Contractors’.
A further alternative is to draw up a
43. See Rosehaugh Stanhope (Broadgate phase 6) plc v Redpath Dorman Long Ltd.
series of contracts i.e. between the
[1990] 50 BLR 69, CA; Beaufort House Development Ltd v Zimmcor (International)
employers and firstly the construction
Inc [1990] 50 BLR 91, CA.
manager, secondly each member of 44. The JCT Standard Form of Construction Management (1994 Edition).
the design team and thirdly each 45. See Piyush Joshi ‘Law Relating to Infrastructure Projects’ at P22-25.
specialist trade contractor. 46. This being basically to avoid the purported shortcomings of the other forms of
‘Package Deal’ types of contracts.
■ Hybrids 47. The period is usually 1 year but there are instances in local practice where a
longer period of up to 5 years has been employed.
In addition to the main types of 48. Percival Ltd. v LCC Asylums and Mental Deficiency Committee (1918) 87 LJKB
contract strategy described above, 677. The JCT Measured Term Contract (1989) permits either party to determine
there have also developed hybrids the contract by giving notice, but requires the contractor to carry out all orders
such as 45: which can be completed before the expiry of such notice.

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Alternatively, the acceptance of a original and continuation There are no published local
tender may result in a ‘standing offer’ contracts are dealt with standard forms of conditions of
by the contractor, which ripens into separately. If and when the latter contract governing the above
a contract on each occasion that an arises, the original contract may miscellaneous contracts and use is
order is placed but which may be be used as a basis for realizing made of ‘ad hoc’ or ‘bespoke’ forms.
revoked at any time 49. the continuation contract 53
At the moment, there is no local SPECIAL PARTIES
standard form of conditions of (iv) ‘Periodic contract’: This is similar
contract for a term contract though to a term contract, but the ■ The Government departments
there is a tendency to either modify execution of work or supply of
the JCT Standard Form of Measured goods is required at intervals, The extent to which contracts can
Term Contract (1989 Edition) or to regularly or on demand rather be made on behalf of the Federal
generate ‘bespoke’ forms. than being continuous for a Government, and the Governments of
stated time 54. the states is governed by the
■ Miscellaneous Contracts Government Contracts Act 1949 57.
(v) ‘Partnering contract’: This For the procedure pertaining to the
Over and above the common contract is in essence an enforcement of such contracts and
methods of contract procurement extension to the normal serial matters relating to proceedings by and
described above, there exist other contract whereby over a pre- against the Federal Government and
types of contracts that are being determined period of time, the the Government of the states, the
utilized by the local construction contractor automatically receives applicable statutes are the
industry. These are essentially all new contracts from the Government Contracts Act 1949 and
variations of the conventional employer with payment to be The Government Proceedings Act
methods and have been developed made by reference to an initially 1956 58.
to address specific uses. Such agreed formula 55. In general, a construction contract
contracts include, inter alia, the entered into on behalf of the
following: (vi) ‘Independent contract’: This is Government 59 is enforceable by and
essentially a ‘contract for against the Government.
(i) ‘Build, operate and transfer 50 services’ whereby the party Accordingly, the Government is
contract’: This is a type of a undertaking a stipulated task for bound by a contract made by a proper
privately financed contract an agreed consideration is free to agent acting within the scope of his
whereby the contractor finances select his own mode of doing it. authority but not otherwise 60. A
the project, designs it, He is neither under the control Government Officer who enters into
undertakes the construction, or direction of the other 56. a contract within the scope of his
owns and operates it over the
concession period and on its
expiry transfers the beneficial 49. Great Northern Rly Co v Witham [1873] LR 9 CP 16.
ownership of the project back to 50. Also called ‘BOT’ Contract. See also Piyush Joshi ‘Law Relating to Infrastructure
the employer 51. Projects’ at P22-25.
51. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
(ii) ‘Serial contract’: This is a contract Pre-Contract Award Practice’ at P132-138.
resulting from a procedure called 52. See The Aqua Group ‘Tenders and Contracts for Building’ (2nd Edn.) at P 119.
‘serial tendering’. Fundamentally, 53. See Ir. Harbans Singh K.S ‘Engineering and Construction Contracts Management:
a serial tender is a standing offer Law and Principles’ at P256.
to carry out work for more than 54. See Robinson, Lavers, Tan & Chan ‘Construction Law in Singapore and Malaysia’
one project in accordance with [2nd Edn.] at P428.
the tender submitted for the 55. See ‘Dispute Avoidance and Resolution Task Force (DART) of the American
Arbitration Association Report on partnering at P86.
initial project, or based on
56. E.g. Consultants, Suppliers, etc. See Stevenson Jordan & Harrison v MacDonald &
hypothetical bills of quantities
Evans [1952] 1 TLR 101 and Syed Mubarak bin Syed Ahmad v Majlis Peguam
representing the average project
Negara [2001] 4 MLJ 167.
of a series 52. 57. Rev. 1973 (Act 120)
58. Rev. 1988 (Act 359). See generally also the Rules of the High Court 1980 Ord. 73
(iii) ‘Continuation contract’: This is an for proceeding by and against the Government.
‘ad hoc’ arrangement to extend 59. It does not include municipal councils and public corporations.
the scope of the initial or original 60. Under the Government Contract Act 1949 (Act 120) SS 2 & 3, all contracts made
contract beyond its original in Malaysia on behalf of the Government shall, if reduced in writing, be made in
ambit i.e. there is no standing the name of the Government and signed or authorized as provided for under the
offer to do more work than that Act. Any authorization under S 2 or 3 shall be in the form set out in the schedule
originally envisaged. The to the Government Contracts Act 1949 (Act 120).

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authority is not liable to be sued Contracts made by or on


personally upon any contract behalf of a corporation which
m a d e i n t h a t c a p a c i t y 61 . if made by private persons
Ac t i o n s b y o r a g a i n s t t h e would be required to be in
Government are instituted or writing, or which would be
defended by the Attorney valid although made by parole
General 62. only, may be similarly made on
behalf of a corporation by any
■ Local authorities person acting under its express
or implied authority whether
A local authority 63 may by seal or not.
enter into contracts inclusive of For partnerships 72 , when
construction contracts either party is a member of the
necessary for the discharge of partnership, the partnership
any of its functions 64. A local will be liable under the contract
authority must make standing if the contracting party was
orders with regard to contracts acting within the scope of his
for the execution of works or authority 73 . In general, a
the supply of goods or materials member of a partnership is
65
. However, a contractor is not regarded as an agent of the
bound to inquire whether the firm and binds the other
relevant standing orders have partners in making any
been complied with, and non- contract falling within the
compliance by itself does not normal course of business of
invalidate any contract 66 . the firm 74.
A local authority is bound by
any contract entered into by a
committee to which the necessary
61. Government Contracts Act 1949 (Act 120) S 8 also provides that a public officer
powers have been delegated 67, or
shall be personally liable when he expressly pledges his personal credit or where
by any officer acting within his
he contracts otherwise than as an agent of the Government. According to S 6, no
actual or ostensible authority 68 . contracts entered into except in accordance with the Act shall be deemed to have
Protection is afforded to local been made by the authority of the Government. See also Dunn v Macdonald
authorities or persons acting in the [1897] 1 QB 401; affd [1897] 1 QB 555, CA; Sim Siok Eng v Government of Malaysia
execution of statutory or other [1978] 1 MLJ 15.
public duties in respect of any act, 62. For the Federal Government, the Attorney General. For the state of Sabah and
neglect or default done or Sarawak, the Attorney General of such state and for all other states, the Legal
committed by the Public Advisor of such state.
Authorities Protection Act 1948 69. 63. Defined in Local Government Act 1976 (Act 171) to include any City Council,
Municipal Council or District Council. S13 stipulates that every local authority
■ Companies, corporations and shall be a body corporate.
partnerships 64. See Local Government Act 1976 (Act 171) S 36(1).
65. See Local Government Act 1976 (Act 171) S 36(2).
Companies, corporations and 66. See North West Leicestershire District Council v East Midlands Housing Association
partnerships may enter into Ltd. [1981] 3 All ER 364, [1981] 1 WLR 1396, CA.
construction contracts like any 67. See Local Government Act 1976 (Act 171) S 36(2).
other person. In fact the formalities 68. As to the ostensible authority of various officers see A Roberts & Co Ltd. v
Leicestershire County Council [1961] Ch 555, [1961] 2 All ER 545; Carlton
required for the execution of
Contractors v Bexley Corpn [1962] 60 LGR 331. Cf North West Leicestershire District
contracts by companies,
Council v East Midlands Housing Association Ltd. [1981] 3 All ER 364, [1981] 1
corporations and partnerships are
WLR 1396, CA.
effectively identical to those for 69. Act 198, See also Local Government Act 1976 (Act 171) S124.
individuals, save for particular 70. See e.g. Companies Act 1965 (Act 125), Partnership Act 1961 (Act 135), etc.
requirements as stipulated in the 71. Companies Act 1965 (Act 125) S 35(4).
respective statutory enactments 70. 72. For a definition of a partnership see Partnership Act 1961 (Act 135) S 3(1) and
A company may choose to make a Gulazam v Noorazman and Sobath [1957] 23 MLJ 45; Ratna Ammal & Anor v Tan
contract in writing, under its Chow Soo [1964] 30 MLJ 399.
common seal or a contract may be 73. See Partnership Act 1961 (Act 135) S 7 & 8. See also Pembinaan Thin Chai Sdn
made on behalf of the person by Bhd v Citra Muda Sdn Bhd & Anor [2002] 3 MLJ 107.
any person under its express or 74. See Chan King Yue v Lee @ Wong [1962] MLJ 379; Bannatyne v D&C Mac Iyer
implied authority 71. [1906] 1 K.B. 103.

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FORMATION OF CONTRACT the contractor to keep his offer open or goods as the employer may require
88
, unless that undertaking is made by during a specified period, the legal
■ Negotiated contracts deed or given for consideration 89. relationship which is brought into
An unsuccessful tenderer is existence by the acceptance of a tender
The formation of construction normally not entitled to recover the depends upon the terms of the
contracts is governed by the ordinary cost of preparing his tender from the invitation to tender.
contractual rules of offer and employer 90 , except where the
acceptance 75. Where a contractor invitation to tender was given ■ Purchase Orders
quotes a price for works in a document fraudulently and without any intention
headed ‘estimate’ this may be treated of accepting it in any event 91 . The purchase order system is one
as an offer 76. Acceptance must be However, a promise by the employer of the methods of contract
absolute and unqualified 77 and in full to pay for such services may be implied procurement based essentially on the
conformity with any requirements laid where the work involved far exceeds nature of the work and its value
down in the offer 78. what would normally be required of utilized by employers as distinct from
Any purported acceptance may, if the contractor or where the employer the tender system discussed above 93.
it alters the terms of the offer or is able to make profitable use of the Synonymous with the ‘quotation’
introduces new terms, be regarded as information supplied 92. system, the purchase order system is
a counter-offer and thus a rejection Where an employer invites tenders used principally for minor works 94.
of the original offer 79. Where the from contractors to supply such work The calling of quotations by the
parties ‘negotiate’ by delivering
inconsistent standard-form documents
to each other, the usual outcome is
that, when work commences or 75. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
materials are supplied, this will be Law and Principles’ at P61 to 81.
deemed to constitute acceptance of the 76. Croshaw v Pritchard and Renwick [1899] 16 TLR 45. An inaccurate estimate
last document delivered 80. which is not an offer may give rise to liability in the tort of negligence: see J & J C
Where a contract is concluded after Abrams Ltd v Ancliffe [1978] 2 NZLR 420.
the contractor has commenced the 77. Section 7(a) Contracts Act 1950 (Act 136).
78. See Rajeswari Thedshana Murthy v Kin Nam Realty Development Sdn. Bhd. [1993]
works, it may easily be concluded that
1 MLJ 88.
the parties intended the contract to
79. Hyde v Wrench [1840] 3 Beav. 334, 49 ER 132; Trollope & Colls Ltd. and Holland,
govern all the work, including what
Hannen & Cubitts Ltd. v Atomic Power Construction Ltd. [1962] 3 All ER 1035.
has already been done 81. 80. Chichester Joinery Ltd. v John Mowlem & Co plc. [1987] 42 BLR 100; Butler Machine
Tool Co. v Ex-Cell-O-Corp. [1979] 1 All ER 965.
■ Tenders 81. Trollope & Colls Ltd and Holland, Hannen & Cubitts Ltd v Atomic Power
Constructions Ltd [1962] 3 All ER 1035 [1963] 1 WLR 333.
In general, an invitation to 82. Defined by Lord Parker as ‘an offer to receive offers’ in Fisher v Bell [1961] QB 394.
contractors to submit tenders to carry 83. Spencer v Harding [1870] LR 5 CP 561.
out construction works is not an offer 84. Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC
but merely an invitation to treat 82; 207, [1985] 2 All ER 966, HL.
the employer is in consequence under 85. Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3
no obligation to accept the lowest or All ER 25, [1990] 1 WLR 1195, CA; cf Fairclough Building Ltd v Port Talbot
any of the tenders received 83 . Borough Council [1992] 62 BLR 82, CA; Hughes Aircraft Systems
However, an express undertaking by International v Airservices Australia [1997] 146 ALR 1.
the employer to accept the lowest 86. Section 5(1) Contracts Act 1950 (Act 136).
tender will be binding upon the 87. Section 6 Contracts Act 1950 (Act 136). See also Cook Islands Shipping
submission of a tender which conforms Co Ltd v Colson Builders Ltd [1975] 1 NZLR 422.
with any conditions laid down 84. 88. Routledge v Grant [1828] 4 Bing 653; Dickinson v Dodds [1876] 2 Ch D
463.
Moreover, the employer may in other
89. The Canadian courts have upheld such undertakings despite the absence
cases be under an implied obligation
of consideration: see R v Ron Engineering Ltd [1981] 119 DLR (3d) 267.
to give reasonable consideration to any
Most local employers protect themselves against withdrawal by requiring
tender submitted in accordance with the contractor to furnish a ‘tender’ or ‘bid’ bond.
the published conditions 85. 90. Harris v Nickerson [1873] LR 8 QB 286; William Lacey (Hounslow) Ltd v
The unconditional acceptance of a Davis [1957] 2 All ER 712 at 715.
tender creates a binding contract. Until 91. Richardson v Silvester [1873] LR 9 QB 34.
such acceptance occurs, the contractor 92. William Lacey (Hounslow) Ltd. v Davis [1957] 2 All ER 712, [1957] 1 WLR
is free to withdraw his tender 86 by 132; Marston Construction Co. Ltd. v Kigass Ltd. [1989] 46 BLR 109.
giving notice of withdrawal to the 93. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contract
employer 87 . This will be so Management: Pre-Contract Award Practice’ at P511 to 515.
notwithstanding any undertaking by 94. E.g. supply items, repair, renovation, maintenance, etc.

T H E I N G E N I E U R 14
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employer is in the legal sense or (exceptionally) it may create an since consideration exists in the
tantamount to an invitation to treat. ancillary or interim contract which form of an implied promise by the
The contractor’s submission of a will entitle the recipient to recover his employer to pay a reasonable sum.
quotation in response to the wasted costs if the intended future A promise by an employer to pay
employer’s request will legally contract does not materialize 101. an additional sum in return for the
constitute the making of an ‘offer’ Where a letter of intent does not contractor’s mere carrying out of
or ‘proposal’. The mere labelling of result in any kind of contractual existing contractual obligations is
the submission as a quotation is not relationship, a recipient who carries given without consideration and is
conclusive of its legal effect. The out work in accordance with its thus unenforceable 105, unless the
contents will have to be carefully terms may nevertheless be entitled court is able to discern sufficient
scrutinized to elicit the intention of to payments on a restitutionary practical benefit to the employer
the submitting party 95. The formal basis 102 e.g. on a quantum merit f r o m t h e a r r a n g e m e n t 10 6 .
issue of the purchase order by the basis. Furthermore, a contractor may file
employer constitutes an acceptance a claim on an act done prior to a
of the quotation (or offer) in the ■ Consideration promise made by the employer
contractual sense and thereby provided the contractor had done
perfects the contract. To be enforceable at law, a or abstained from doing something
promise must be supported by pursuant to the desire of the
■ Letters of intent valuable consideration 103 . A employer and not necessarily in
unilateral declaration is not enough pursuance of a promise to be made
A letter of intent is a document to make a contract and that no by the latter 107.
which expresses an intention to enter question of contract under seal
into a contract with the recipient at arises unless it falls within one of ■ Formalities
some time in the future 96. Its legal the exceptions in Section 26 of the
effects, if any, depend upon the true C o n t r a c t s Ac t 1 9 5 0 10 4 . A n The general legal position is that
construction of the words used 97 and undertaking by a contractor to the formation of a construction
the relevant circumstances between carry out work where no price is contract requires no particular
the parties 98. The document may agreed is generally enforceable, formalities. Such a contract may
have no legal effect at all 99; it may
constitute an offer of payment which
the recipient is free to accept by 95. Croshaw v Pritchard [1899] 16 TLR 45. See also Zain Azahari bin Zainal
performance of specified services 100; Abidin v Wearne Brothers (1983) Sdn Bhd [2002] 1 MLJ 254.
96. Its normal purpose is to reassure the recipient. Cf the ‘letter of comfort’
sent by a parent company: Kleinwort Benson Ltd v Malaysia Mining Corpn
Bhd [1989] 1 All ER 785, CA.
97. British Steel Corpn v Cleveland Bridge and Engineering Co Ltd [1984] 1 All
ER 504 at 509-510 per Robert Goff J.
98. Mashaha Navigation Sdn. Bhd. v Palm Oil Products (M) Bhd. & Anor [1989]
1 CLJ 393, HC.
99. As in Ayer Hitam Tin Dredging Malaysia Bhd. v YC Chin Enterprises Sdn.
Bhd. [1994] 2 MLJ 754, [1994] 2 SCR 90, SC.
100. Turriff Construction Ltd v Regalia Knitting Mills Ltd [1971] 9 BLR 20; cf
Monk Construction Ltd v Norwich Union Life Assurance Society [1992] 62
BLR 107, CA.
101. Such a contract might also render the recipient liable for defective
performance.
102. British Steel Corpn v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER
504, in which the absence of a contract precluded a counter-claim by the employer
for alleged delays in performing the work in question. See also Contracts Act
1950 (Act 136) S71 and Siow Weng Fatt v Susur Rotan Mining Ltd. [1967] 2 MLJ
118, PC and Wilson Smithelt & Cape (Sugar) Ltd. v Bangladesh Sugar & Food
Industries Corpn [1986] 1 Lloyd’s Rep 378.
103. See Section 2(d) Contracts Act 1950 (Act 136) for the definition of consideration.
104. Per Gill FJ in Guthrie Waugh Bhd. v Malaippan Muthucumani [1972] 2 MLJ 62, FC.
105. Stilk v Myrick [1809] 2 Camp 317; Sharpe v San Paulo Rly Co [1873] 8 Ch App
597.
106. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, [1990] 1 All ER
512, CA.
107. Per Gunn Chit Tuan SCJ in South East Asia Insurance Bhd. v Nasir Ibrahim [1992]
2 MLJ 362, SC; cf Section 2(d) and 26(b) Contracts Act 1950 (Act 136).

T H E I N G E N I E U R 15
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be validly made orally 108 , by (iii) Appendix to the conditions: of construction, quality of
conduct or in writing. Contracts by Certain information specific to finishes and standards of
conduct are difficult to establish a particular contract, such as workmanship 117 to be provided.
evidentially and are often dates of commencement or It may also specify levels of
encountered where parties have had completion and amounts of performance which individual
a course of dealing before. A further liquidated damages, is items of work are required to
illustration of the above, occasions commonly required to be achieve;
where an employer makes an offer inserted by the parties in an
to a contractor for the performance Appendix to the conditions (vi) Bill of quantities: This
of certain works upon stated terms, before the contract is executed; document itemises in great
and without making any express detail the contract work as
acceptance, or counter-offer, the (iv) Drawings and plans: Drawings described in the drawings and
contractor carries out the work 109. are prepared by whoever is the specifications 118. It may,
The bulk of construction contracts responsible to the employer for but need not constitute an
are either in writing 110 or evidenced the design of all or part of the exhaustive statement of the
in writing 111. Written evidence is proposed works, and are the work which the contractor
also required for a contract of major vehicle for conveying the undertakes to perform in return
guarantee 112 , under which the intentions of the designer to the for the agreed price. Where, as
contractual performance of one of contractor. Among other is common, the bill of quantities
the parties is guaranteed by a third matters, they provide is required by the contract to
party. information as to the shape, be drawn up in accordance with
appearance, location and a particular standard method of
interaction of the component measurement 119, any deviation
SCOPE OF CONTRACT parts of the proposed works; from the prescribed method
may entitle the contractor to
■ Contract documents (v) Specifications: This document claim payment for additional
amplifies the contract drawings work 120;
There are no particular by providing a verbal
restrictions upon the documents description of such methods as (vii) Schedule of rates 121: Where
by which a construction contract the scope of work 116, methods there are no priced bill of
may be formed. It is trite that the
contents of the said documents
must accurately and completely 108. In practice most domestic sub-contracts and minor works are made orally. The
record the express terms and principal problem here is merely from the evidential point of view in the event of
conditions of agreement reached a dispute.
by the parties inclusive of all 109. Peter Lind & Co. Ltd. v Mersey Docks & Harbour Board [1972] 2 Lloyd’s Rep. 235;
rights, duties, obligations and New Zealand Shipping Co. Ltd. v Satterthwaite & Co. Ltd. [1975] A.C. 154 (P.C.).
liabilities. The following is a brief 110. See Section 10(2) Contracts Act 1950 (Act 136).
description of the types of 111. As required by a particular statutory enactment.
documents which constitute the 112. Although Section 79 Contracts Act 1950 (Act 136) permits the guarantee to be
contract documents 113 : also in an oral form.
113. The actual contents varies with the type of contract and the requirements of the
(i) Agreement or articles of particular form of contract used. For further details see Ir. Harbans Singh K.S.
agreement: This document 114 ‘Engineering and Construction Contracts Management: Pre-Contract Award
describes in general terms the Practice’ at P536 to 574.
114. Or an informal equivalent such as an exchange of correspondence indicating offer
parties, the contract works and
and acceptance.
the price, and evidences the
115. Sometimes ‘bespoke’ or ‘ad hoc’.
intention of the parties to be
116. For contract based on Drawings and Specifications. See JKR Form 203 (Rev. 10/
bound; 83).
117. And design where this is part of the contractor’s scope.
(ii) Conditions of contract: Detailed 118. Bills of quantities (or B.Q.) may not be required for smaller or less complex projects
conditions, often in standard where the drawings and specifications themselves provide sufficient information
form 115 (with or without or in the event the contract is of the ‘package deal’ type.
amendments), amplify and 119. For building works this is currently the ‘Standard Method of Measurement of
explain the basic obligations of Building Works’ as published by the Institution of Surveyors, Malaysia and for
the parties and lay down Civil Engineering is the ‘Civil Engineering Standard Method of Measurement’
administrative procedures to be (CESMM) as published by CIDB, Malaysia.
followed during the progress of 120. See C Bryant & Son Ltd v Birmingham Hospital Saturday Fund [1938] 1 All ER 503.
the works; 121. Also called ‘Schedule of Unit Rates’ in some contracts.

T H E I N G E N I E U R 16
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quantities 122 , a document executed by the parties. The Construction of Contract


setting out rates applicable to conditions of contract may
various categories of contract expressly define the documents Where a contract is made in
work may be required for the which constitute the contract 125, writing, the meaning to be given to
assessment of interim and may make provision for the its express terms is a question of law.
payments, the valuation of priority of documents in the case of The court will seek to give effect to
variations or (in a measure and discrepancies 126. the intention of the parties as
value contract) the calculation Standard sets of contract expressed in the written documents
130
of the total amount due to the conditions are sometimes . It is settled law that a written
contractor; incorporated by reference into document is presumed to have
contracts which are not formally embodied all material terms and
(viii) Programme or method executed 127. Such cases can lead conditions and no extrinsic evidence
statement: Although a to uncertainty as to which particular will be permitted to contradict, vary,
contractor is commonly set of conditions is intended for add to or subtract from the written
required to furnish such incorporation 128. These problems terms save for exceptions permitted
documents 123 , they are are especially acute in relation to by the law 131.
frequently defined by the sub-contracts which purport to If a written document contains
contract in such a way that incorporate some or all the an ambiguity which cannot
there is no obligation on either provisions of the main contract 129. otherwise be satisfactorily
party to comply with the dates
or methods contained in them.
In such cases these documents
are regarded merely as aids in
project planning and
coordination;

(ix) Miscellaneous documents:


Various other documents may
be required for sufficiency,
clarity and completeness
purposes. These include, inter
alia, documents such as the
contractor’s tender
submissions, any addenda
and/or clarifications, post
tender submission
negotiations, documents
amending the offer in any
way and the like; and

(x) Design and build documents:


Certain design and build
contracts replace the documents 122. In contracts based on drawings and specifications or design and build contracts.
listed above with three 123. See the effect of a tender submission being incorporated in Yorkshire Water
alternative documents Authority v Sir Alfred McAlpine & Sons (Northern) Ltd. [1985] 32 BLR 114 and
comprising the ‘Employer’s Havant Borough Council v South Coast Shipping Co. Ltd. [1996] CILL 1146.
124. See PWD Form DB/T 2002 Edn.
Requirements’ issued by the
125. See the second recital and clause 1(a)(i) JKR Form 203A (Rev. 10/83).
employer and the ‘Contractor’s
126. See clause 4.1 CIDB Standard Form of Contract for Building Works (2000 Edn.).
Proposals’ and the ‘Contract
127. These may arise from e.g. an exchange of correspondence, or an informal
Sum Analysis’ submitted by the notification that a tender has been accepted.
contractor 124. 128. See e.g. Killby & Gayford Ltd v Selincourt Ltd [1973] 3 BLR 104, CA; SP Chua Pte.
Ltd. v Lee Kim Tah (Pte.) Ltd. [1993] 3 SLR 122.
Incorporation and Priority of 129. See e.g. Royden (M) Sdn. Bhd. v Syarikat Pembenaan Yeoh Tiong Lay Sdn. Bhd.
Documents [1992] 1 MLJ 33.
130. See Mulpha Pacific Sdn Bhd v Paramount Corp Bhd [2003] 4 MLJ 357; Shore v
A formal construction contract Wilson [1842] 9 Cl & F 355, HL; Investors Compensation Scheme v West
usually contains a number of Bromiwich Building Society [1998] 1 All ER 98, HL.
documents which are incorporated 131. See Section 92 Evidence Act 1950 (Act 56); cf Tindok Besar Estate v Tinjar Co.
by reference into the agreement [1977] 2 MLJ 229.

T H E I N G E N I E U R 18
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resolved, it will be construed pertaining to a particular type of two broad categories may be
adversely to the party who transaction 144, the courts based on discerned 147. First, there are those
proffered it for execution under the intention of the parties 145 and usual terms which the law implies into
the ‘contra proferantum’ rule 132 . certain provisions contained in all contracts of a certain type unless
In seeking the meaning of a statute, or generally by law 146. the parties have shown an intention
contract, written words are There is a paucity of terms to exclude or modify them. In relation
normally presumed to take implied by custom and usage and to construction contracts, such
precedence over printed words in by statute or law in construction implied terms include the employer’s
the event of inconsistency 133 . contracts. However, in respect of obligations to co-operate with and not
However, this presumption can be construction contracts, the courts do to hinder the contractor and the
reversed by a clear provision in
make various implications of which contractor’s obligations as to the
the contract 134 . Furthermore,
standard of work and the time for
clauses and words are to be
completion.
construed not by itself standing
Second, a term may be implied
alone, but in the light of other
words appearing in the context in into an individual contract where the
which it is used and all other court finds that the parties must have
c l a u s e s r e l a t i n g t h e r e b y 135. intended it to form part of their
Where possible, the grammatical contract 148, and where the transaction
and ordinary sense of words is to would otherwise be inefficacious,
be adhered to, unless they lead to futile and absurd 149. The conditions
some absurdity or to some for such an implication are that it
repugnance or inconsistency with
the rest of the document, in which
case the words may be modified 132. Per Lord Brightman in Kandasami v Mohamed Mustafa [1983] 2 MLJ 85, [1983]
so as to avoid that absurdity or 4 PCC 183, PC. For a recent application of this rule see MBF Finance Bhd v
inconsistency 136. Sim Peng Bee @ Sim Bay Bee & Anor [2003] 5 MLJ 303.
The construction of a contract 133. Robertson v French [1803] 3 East 130 applied in Bumiputera Malaysia Berhad
also involves the application of a Kuala Trengganu v Mae Perkayuan Sdn. Bhd. [1998] 2 MLJ 76; [1993] 1 SCR
host of cannons of construction 385, SC.
a n d p r o c e d u r a l g u i d e s 137 134. John Mowlem & Co Ltd v British Insulated Callenders Pension Trust Ltd [1977]
3 Con LR 64, DC.
including the following, namely,
135. Per Salleh Abbas FJ in Trengganu State Economic Development Corporation v
words as interpreted must be Nade Finco Ltd. [1982] 1 MLJ 365, FC.
consistent with the spirit and 136. Grey v Pearson [1875] 6 HLC 61 at 106. See also Polygram Records Sdn. Bhd.
l e t t e r o f t h e a g r e e m e n t 138, v The Search & Anor [1994] 3 MLJ 127, HC.
typographical errors may be 137. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts
corrected to give effect to the Management: Law and Principles’ at P292 to 299.
parties’ intention 139, the contract 138. Lim Yee Teck & Ors v Shell (M) Trading Sdn. Bhd. [1985] 2 MLJ, 265; [1985] 4
must be construed as at the date PCC 433, PC.
i t w a s m a d e 140 a n d a i d s t o 139. Ng Siew Wah & Ors v MAA Holdings Sdn. Bhd. & Anor [1985] 2 MLJ 332, SC.
interpretation within the contract 140. City Investments Sdn. Bhd. v Koperasi Serbaguna Cuepacs Tanggungan Berhad
[1985] 1 MLJ 285, FC, [1988] 1 SCR 122; 4 PCC 709, PC
document itself be considered in
141. Allen v Pink [1838] 4 M & W 140; J Evans & Sons (Portsmouth) Ltd v Andrea
the construction process. Where
Merzario Ltd [1976] 2 All ER 930, CA.
a contract is partly oral or made 142. Smith v Hughes [1871] LR 6 QB 597; British Crane Hire Corpn v Ipswich Plant
by conduct 141 , the ascertainment Hire Ltd [1975] QB 303 1 All ER 1059, CA.
of the terms of the contract is a 143. Hamid Abdul Rashid, Dr. v Jurusan Malaysia Consultants (Sued as a Firm) [1997]
question of fact 142 . 1 AMR 637.
144. Hamzah & Yeang Sdn. Bhd. v Lazar Sdn. Bhd. [1985] 1 CLJ 72, FC and Udachin
Implied Terms Development Sdn. Bhd. v Datin Peggy Taylor [1985] 1 MLJ 121, FC.
145. Sababumi (Sandakan) Sdn. Bhd. v Datuk Yap Pak Leong [1998] 3 MLJ 151, FC.
A construction contract may be 146. E.g. S14 to 16 Sale of Goods Act 1957 (Act 382), S6 Hire Purchase Act 1967
(Act 212), etc.
subject to certain terms that are
147. Liverpool City Council v Irwin [1977] AC 239 at 255,257, HL.
expressly included in the contract.
148. Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 2
In seeking to establish the intention All ER 260 at 268, HL, per Lord Pearson.
of the parties to a contract, certain 149. Liverpool City Council v Irwin [1977] AC 239 at 263, HL, per Lord Salmon and
terms need to be implied 143; these Hamid Abdul Rashid, Dr. v Jurusan Malaysia Consultants (Sued as a Firm) [1997] 1
being namely by custom and usage AMR 637.

T H E I N G E N I E U R 19
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knowledge and serve as an


introduction for further study/
updating as it is irrefutable that one
cannot escape the direct or indirect
effects of such contracts in whatever
capacity one is involved in the
engineering/construction industry.

REFERENCES

1. Ir. Harbans Singh K.S.,


‘Engineering and Construction
Contracts Management: Law &
Principles and Pre-Contract
Award’.
2. Ir. Harbans Singh K.S.,
‘Malaysian Precedents and
Forms: Engineering and
Construction Contracts’, MLJ
must be reasonable and equitable; it dealings, rights, obligations and Sdn. Bhd.
must be necessary to give business liabilities. It can therefore be inferred
efficacy to the contract, so that no that this metamorphosis has served 3. Piyush Joshi ‘Law Relating to
term will be implied if the contract is as the seed of crystallization of the Infrastructure Projects’,
effective without it 150; it must be species of contracts called Butterworths
so obvious that ‘it goes without ‘construction’ contracts; the topic of 4. Robinson, Lavers, Tan & Chan,
saying’ 151; it must be capable of clear review of this article. ‘Construction Law in
expression and it must not contradict Legal practitioners are well Singapore and Malaysia’ [2nd
any express term of the contract 152. conversant with the intricacies of the Edn.], Butterworths.
Where the parties have contracted on subject matter at hand. However,
the basis of a detailed standard form most of the players in the construction 5. Sir Peter Mallet, ‘The
document, the courts are generally industry such as engineers, architects, Encyclopedia of Forms and
unwilling to imply terms on this basis, quantity surveyors, employers, etc. Precedents: Building and
even where to do so would improve have at most times a fairly Engineering Contracts’ [5th
the contract 153; although there are rudimentary awareness of the Edn.], Butterworths.
exceptions 154. contracts which they are privy to or 6. The Aqua Group, ‘Tenders and
have to deal with. For a non-legally Contracts For Building’ [2nd
SUMMARY trained practitioner, this can be Edn.]
intimidating and practically mind
Construction contracts are as boggling. Perhaps, the essence of the 7. V. Sinnadurai, ‘Law of
varied in their form nature, type and instant paper will equip such Contract’ [3 rd Edn.] Lexis-
content as there the projects or works practitioners with the basic Nexis-Butterworths. BEM
they circumscribe within their ambit.
From a mere handshake agreement to
a multi-party, multi-volume express 150. ‘The Moorcock’ [1889] PD 64 at P68 applied in Sababumi (Sandakan) Sdn. Bhd. v
document, they span the complete Datuk Yap Pak Leong [1998] 3 MLJ 151, FC; [1997] 1 MLJ 587, CA.
spectrum of contracts that are hitherto 151. Reigate v Union Manufacturing Co (Rambottom) Ltd. [1918] 1 KB 592; and Yap
known to mankind. Whatever the Nyo Nyok v Bath Pharmacy Sdn. Bhd. [1993] 2 MLJ 25, HC.
purpose behind their conception and 152. BP Refinery (Westernport) Pty Ltd v Hastings Shire Council [1977] 52 ALJR 20 at
eventual formalization, the 26, PC.
importance of construction contracts 153. See e.g. Greater London Council v Cleveland Bridge and Engineering Co Ltd [1986]
34 BLR 50, CA (no implied term as to regular and diligent progress); KC Lim &
especially in Malaysia has evolved
Associates Sdn. v Pembenaan Udarama Sdn. Bhd. [1980] 2 MLJ 26, FC (no implied
over the years as the construction term that developer was able to carry on the project at or reasonably near the
industry has matured from ad-hoc architect’s estimated costs), etc.
arrangements into formal/legalistic 154. See Bruno Zornow (Builders) Ltd v Beechcroft Developments Ltd [1990] 51 BLR 16
relationships evidenced by express (implication of fixed date for completion). 143. Hamid Abdul Rashid, Dr. v Jurusan
pronouncements of the parties’ Malaysia Consultants (Sued as a Firm) [1997] 1 AMR 637.

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