Standard Construction Contract for Malaysia

Standard Construction Contract Template for Malaysia

A comprehensive construction contract template compliant with Malaysian law and regulations, particularly the Construction Industry Development Board (CIDB) Act 1994 and Construction Industry Payment and Adjudication Act 2012 (CIPAA). This document establishes the legal framework for construction projects in Malaysia, defining the rights, obligations, and responsibilities of all parties involved. It includes detailed provisions for project execution, payment terms, variation procedures, dispute resolution mechanisms, and compliance with local building regulations and environmental requirements.

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What is a Standard Construction Contract?

This Standard Construction Contract is designed for use in Malaysian construction projects, providing a comprehensive framework for managing construction relationships between employers and contractors. The document incorporates requirements from key Malaysian legislation including the CIDB Act 1994, CIPAA 2012, and relevant building and safety regulations. It is particularly suitable for medium to large-scale construction projects where a detailed contractual framework is needed. The contract addresses essential aspects such as payment mechanisms, variation procedures, quality standards, and dispute resolution, while ensuring compliance with local regulatory requirements. It can be adapted for various construction project types while maintaining consistency with Malaysian construction law and industry practices.

What sections should be included in a Standard Construction Contract?

1. Parties: Identification and details of the Employer and Contractor, including registration numbers and addresses

2. Background: Context of the construction project and basis for the contract

3. Definitions and Interpretation: Definitions of key terms and rules for interpreting the contract

4. Contract Documents: Hierarchy and list of documents forming part of the contract

5. Contractor's Obligations: Core obligations including execution of works, standard of workmanship, and compliance requirements

6. Employer's Obligations: Key responsibilities including site access, permits, and payment obligations

7. Contract Price and Payment: Payment terms, methods, and schedules in compliance with CIPAA 2012

8. Time for Completion: Project timeline, completion dates, and provisions for extensions of time

9. Variations: Procedures for changes to scope, valuation of variations, and approval process

10. Quality and Defects: Quality standards, inspection procedures, and defects liability period

11. Insurance and Indemnities: Required insurance coverage and indemnification obligations

12. Force Majeure: Events constituting force majeure and consequential rights and obligations

13. Termination: Grounds and procedures for contract termination by either party

14. Dispute Resolution: Procedures for dispute resolution including mediation and arbitration

15. General Provisions: Miscellaneous legal provisions including notices, governing law, and assignments

What sections are optional to include in a Standard Construction Contract?

1. Performance Security: Required when project value exceeds certain threshold or upon employer's requirement

2. Nominated Subcontractors: Include when employer wishes to nominate specific subcontractors

3. Design Obligations: Required for design-and-build contracts where contractor has design responsibility

4. Environmental Compliance: Detailed section needed for projects with significant environmental impact

5. Site Safety and Security: Enhanced section for high-risk construction projects

6. Materials and Equipment: Detailed section when specific materials or equipment requirements exist

7. Testing and Commissioning: Required for projects involving mechanical/electrical installations

8. Liquidated Damages: Include when specific completion dates are critical

9. Retention Money: Include when employer requires retention sum for quality assurance

What schedules should be included in a Standard Construction Contract?

1. Schedule 1: Contract Details: Key project information, contract sum, completion date, and parties' details

2. Schedule 2: Scope of Works: Detailed description of works to be performed

3. Schedule 3: Contract Drawings: List and copies of approved construction drawings

4. Schedule 4: Specifications: Technical specifications and quality standards

5. Schedule 5: Bill of Quantities: Detailed breakdown of quantities and rates

6. Schedule 6: Payment Schedule: Payment milestones and payment terms

7. Schedule 7: Programme of Works: Detailed construction timeline and milestones

8. Schedule 8: Site Requirements: Site-specific requirements and conditions

9. Appendix A: Forms and Notices: Standard forms for variations, claims, and other notices

10. Appendix B: Insurance Requirements: Detailed insurance requirements and minimum coverage

11. Appendix C: Health and Safety Requirements: Safety standards and procedures to be followed

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Commercial Construction

Residential Development

Industrial Construction

Infrastructure Development

Public Works

Healthcare Construction

Educational Facilities

Retail Construction

Hospitality Construction

Mixed-use Development

Relevant Teams

Legal

Construction

Commercial

Procurement

Operations

Risk and Compliance

Project Management

Technical Services

Contract Administration

Quality Assurance

Relevant Roles

Project Manager

Construction Manager

Contract Administrator

Legal Counsel

Quantity Surveyor

Site Manager

Commercial Manager

Risk Manager

Procurement Manager

Chief Engineer

Project Director

Construction Director

Legal Director

Technical Director

Compliance Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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