The Mutual Termination of Construction Contract is a crucial document used when both parties to a Malaysian construction contract agree to end their contractual relationship before the natural completion of the project. This document is essential when circumstances such as project viability changes, funding issues, or strategic realignments necessitate an early but amicable conclusion to the construction project. It must comply with Malaysian construction law, including CIDB regulations and the Contracts Act 1950, while addressing practical aspects such as site handover, material disposal, and final accounts. The agreement protects both parties' interests by clearly defining the termination terms, outstanding obligations, and mutual releases, helping prevent future disputes and ensuring a clean break in the contractual relationship.
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1. Parties: Details of the employer/principal and contractor, including registration numbers and addresses
2. Background: Information about the original contract, project details, and mutual decision to terminate
3. Definitions: Definitions of key terms used in the termination agreement
4. Effective Date of Termination: Clear statement of when the termination takes effect
5. Outstanding Works and Payments: Details of any incomplete works and pending payments
6. Final Account Settlement: Process and terms for final payment calculation and settlement
7. Release and Discharge: Mutual release from future obligations under the original contract
8. Return of Materials and Documents: Provisions for handling construction materials, equipment, and project documents
9. Site Handover: Process and timeline for handover of the construction site
10. Confidentiality: Obligations regarding confidential information post-termination
11. Governing Law: Confirmation of Malaysian law as governing law
12. Execution: Signature blocks and execution formalities
1. Retention of Rights: Used when certain rights need to be preserved post-termination
2. Insurance and Bonds: Include when there are outstanding insurance claims or performance bonds to be addressed
3. Dispute Resolution: Include when specific dispute resolution mechanisms are needed for post-termination issues
4. Employee Matters: Include when there are significant workforce considerations to be addressed
5. Intellectual Property Rights: Include when there are design rights or other IP matters to be resolved
6. Third Party Rights: Include when there are subcontractors or suppliers whose rights need to be addressed
7. Tax Matters: Include when there are specific tax implications to be addressed
1. Schedule 1 - Original Contract Details: Copy or summary of the original contract details and amendments
2. Schedule 2 - Outstanding Works Schedule: Detailed list of incomplete works and their status
3. Schedule 3 - Final Account Statement: Detailed breakdown of final account calculations
4. Schedule 4 - Asset Register: List of materials, equipment and documents to be returned or transferred
5. Schedule 5 - Handover Checklist: Detailed checklist for site handover process
6. Appendix A - Form of Release: Standard form for mutual release and discharge
7. Appendix B - Required Notices: Copies of notices required under Malaysian law or the original contract
Relevant legal definitions
Agreement
Original Contract
Construction Works
Site
Termination Date
Final Account
Outstanding Works
Completion Certificate
Contract Documents
Project
Principal
Contractor
Construction Period
Contract Sum
Retention Sum
Performance Bond
Practical Completion
Defects Liability Period
Construction Materials
Project Documents
Construction Equipment
Professional Team
Variation
Works Specifications
Progress Payment
Construction Schedule
Site Records
Quality Assurance Documents
As-Built Drawings
Environmental Requirements
Original Contract
Construction Works
Site
Termination Date
Final Account
Outstanding Works
Completion Certificate
Contract Documents
Project
Principal
Contractor
Construction Period
Contract Sum
Retention Sum
Performance Bond
Practical Completion
Defects Liability Period
Construction Materials
Project Documents
Construction Equipment
Professional Team
Variation
Works Specifications
Progress Payment
Construction Schedule
Site Records
Quality Assurance Documents
As-Built Drawings
Environmental Requirements
Clauses
Recitals
Definitions
Termination
Final Account Settlement
Outstanding Works
Site Handover
Materials and Equipment
Document Handover
Release and Discharge
Intellectual Property
Confidentiality
Warranties
Insurance
Indemnification
Work in Progress
Payment Terms
Dispute Resolution
Force Majeure
Notices
Assignment
Severability
Entire Agreement
Governing Law
Third Party Rights
Compliance
Health and Safety
Environmental Protection
Labor and Employment
Performance Securities
Tax Matters
Definitions
Termination
Final Account Settlement
Outstanding Works
Site Handover
Materials and Equipment
Document Handover
Release and Discharge
Intellectual Property
Confidentiality
Warranties
Insurance
Indemnification
Work in Progress
Payment Terms
Dispute Resolution
Force Majeure
Notices
Assignment
Severability
Entire Agreement
Governing Law
Third Party Rights
Compliance
Health and Safety
Environmental Protection
Labor and Employment
Performance Securities
Tax Matters
Relevant Industries
Commercial Construction
Residential Development
Industrial Construction
Infrastructure Development
Government/Public Works
Healthcare Construction
Education Construction
Retail Development
Hospitality Construction
Transportation Infrastructure
Relevant Teams
Legal
Construction
Project Management
Commercial
Finance
Operations
Procurement
Risk Management
Compliance
Technical Services
Relevant Roles
Project Director
Construction Manager
Contract Administrator
Legal Counsel
Project Manager
Quantity Surveyor
Site Manager
Commercial Director
Risk Manager
Procurement Manager
Finance Director
Chief Executive Officer
Operations Director
Technical Director
Compliance Officer
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