cover feature

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

THE INGENIEUR 6

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
law 3.
The law of contract forms the core
of the field of construction law and
in due recognition of its significance,
this article has been penned to
elucidate the basic considerations vis-
à-vis the species of contracts going
under the label of ‘construction
contracts’. The discussion is confined
merely to the essential matters so that
the reader can grasp a ‘macro’ view
of this important subject without
getting bogged down in the intricate
details. With brevity and relevance
in mind, the principal considerations
have been addressed and the reader
is encouraged to make reference to
other legal treatises if a deeper
appreciation of the topic is desired.
CONTRACTS GENERALLY
Nature Of Construction Contracts
A construction contract, for the
purposes of this article, is a contract
under which one party 4 (commonly
called the Contractor) agrees for
valuable consideration to undertake
to carry out works for another party
(commonly called the Employer 5)
involving design (where applicable),
fabrication, erection, alteration, repair
or demolition of structures and/or
installations on a site 6 made available
by the latter. It covers a whole range
of contracts i.e. from a simple oral
agreement to repair a house roof to a
mega highway contract. Such contracts
are usually termed ‘building contracts’
cover feature
when they relate to buildings and undertaken by the contractor and the
‘engineering contracts’ when they relate means by which those obligations
to infrastructure 7, systems 8 and may be varied from time to time; the
equipment installations 9 . The time for completion and interim
distinction between these terms is of control of the progress of the works;
no legal significance, and indeed the machinery for payment of the
construction contracts as a class are contractor; supervision of the works
regarded by Malaysian law, not as a on behalf of the employer; insurance
separate category of contracts but a against a range of risks; and the
part of the general law of contract. remedies available to the parties in
In most cases, the only parties to respect of default.
a construction contract are the The Malaysian construction
Employer and the Contractor 10. industry relies essentially on a
However, in actual practice, in all number of types of forms of contract;
likelihood, a construction project these being notably the standard
frequently involves a large number forms of contract, modified standard
of contributors or participants who forms of contract and ‘ad hoc’ or
are contractually interlinked by a ‘bespoke’ forms of contract. The
matrix of contractual arrangements. principal standard forms in common
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
Forms of Construction Contracts Pertubuhan Akitek Malaysia. For
public sector contracts, the Public
The main matters for which a Works Department 11 has drafted and
construction contract normally makes published an employer’s specific
provision are the extent of obligations ‘standard’ set of forms of contract.
1. B.E. (S’pore), P.E., C. Eng., LLB (Hons) London, CLP, DipICArb, Director HSH Consult
Sdn. Bhd.
2. As statutorily prescribed e.g. Limitation Act 1953 (Rev. 1981), etc.
3. For international contracts, private international law may be also relevant.
4. This includes a corporation.
5. Also called ‘the client’ or ‘the purchaser’ or ‘the authority’.
6. Land or place which may be allotted or used for the purposes of carrying out the
work.
7. Such as highways, airports, harbours, etc.
8. Inclusive of utilities.
9. Such as mechanical, electrical, telecommunication, heavy engineering, etc.
10. In a sub-contract, the main contractor is in effect the employer and the sub-
contractor is in effect the contractor.
11. or, Jabatan Kerja Raya (JKR).
THE INGENIEUR 7
cover feature
Lately, the Construction Industry
Development Board (CIDB) has issued
a standard form of contract for
building works 12. These forms of
contract may be used as published,
but they are frequently amended. A
true standard form i.e. one which is
produced by a body which is
representative of the industry e.g. the
Construction Industry Development
Board (CIDB), is in principle unlikely
to attract the operation of the ‘contra
proferantum’ principle 13. However,
the position may well be different
where an employer or contractor
repeatedly contracts on the basis of
standard form contract containing his
own amendments 14 or one that is self-
styled as a standard form 15.
Other standard forms of contract
in used in the construction industry
include those published by particular
employers e.g. Tenaga Nasional
Berhad, Putrajaya Holdings, Telekom
Malaysia Berhad and the like for their
specific projects and a sprinkling of
foreign forms. The latter include
those standard forms generated by
bodies such as the Joint Contracts
Tribunal (JCT), the Institution of Civil
Engineers (ICE), the International
Federation of Consulting Engineers
(FIDIC) and various international
bodies for use in relation to specialist
works 16.
Roles of the parties
In addition to the employer and
the contractor, the operation of a
construction contract commonly
involves a number of other persons
not party to the contract itself 17.
Except where the contractor
undertakes to design as well as to
construct the works 18, the employer
will usually either undertake the
design departmentally 19 or
commission the design from a
professionally qualified person e.g.
architect or engineer whose rights
and obligations will be governed by
the contract under which he is
engaged 20.
Most sizeable construction
contracts make provision for the
employer to be represented during the
progress of the works by one or more
contract administrators 21. Such
person or persons may be given
authority to act as the employer’s
agent in supervising the works and
transmitting information and
instructions to the contractor; they
may also be empowered by the
construction contract itself to exercise
certification and other decision-
making powers which are binding
upon both the employer and the
contractor.
The principal contract
administrator has traditionally been
the engineer or architect responsible
for designing the works, although this
is by no means necessarily so. A
recent trend especially in ‘Design and
Build’ and ‘Management’ types of they are often referred to as
contracts has been for non- ‘nominated’ where they are selected
professionals such as project by the employer, who then instructs
managers, construction managers and the main contractor to enter into the
the like to undertake the said role. In relevant sub-contract 22.
addition, many contracts provide for
the appointment of a quantity
surveyor to carry out some of the TYPES OF CONTRACT
administrative functions. A sub- PROCUREMENT
contractor is one who carries out part
of the contract, and who works under ■ Traditional General Contracts
a contract with the main contractor
who is for all intents and purposes of Appearing under various labels
the sub-contract, the former’s such as ‘General’ contracts,
employer. A sub-contractor who ‘Employer-design’ contracts and
supplies only materials but undertakes ‘Design-bid-build’ contracts, these
no work or other services under the contracts are basically characterized
sub-contract is commonly called a by the separation of the design from
‘supplier’. Sub-contractors and the production or manufacture 23
suppliers are referred to as ‘domestic’ elements of the contract. Under this
where they are selected by and the contract procurement route, the
responsibility of the main contractor; employer causes the design of the
12. Which includes a Main Contract Form and one for the Nominated Sub-Contract.
13. Union Workshop (Construction) Co. v Ng Chow Ho Construction Co. Sdn. Bhd.
[1978] 2 MLJ 229.
14. Chester Grosvenor Hotel Co Ltd v Alfred McAlpine Management Ltd (1991) 56
BLR 115. See also Barnard Pipeline Technology Ltd. v Marston Construction Co Ltd
[1992] CILL 743.
15. E.g. the JKR or PWD Standard Forms.
16. Notably the Institution of Electrical Engineers, the Institution of Mechanical
Engineers and the Institution of Chemical Engineers to name a few.
17. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
Law and Principles’ at P10-19.
18. See Design and Build Contracts.
19. Example, the Public Works Department by ‘in-house’ designers.
20. e.g. BEM Standard Form of Agreement (BEM Form 2000 Edn)
21. Called S.O., Engineer, Architect, Employer’s Representative, etc. depending on the
form of contract employed.
22. Other common categories of sub-contractors include ‘designated (or named) sub-
contractors, ‘selected’ sub-contractors, ‘specified’ sub-contractors, etc.
23. i.e. construction or installation.
THE INGENIEUR 8

works to be prepared by his
professional designers 24 and then
invites the contractor to tender on
the basis of the completed design 25.
The contractor builds or
manufactures what the designers
have specified. Since the design
element is within the ambit of the
employer’s obligations, he
accordingly assumes all
responsibility for all design work
undertaken. The contractor is only
answerable for the building or
construction aspects of the works i.e.
the quality of materials used and
workmanship involved in the
contract.
Another significant characteristic
of this form of procurement is that a
single main contractor 26 undertakes
total responsibility to the employer
for all the work under the contract.
In so far as parts of the work are in
fact carried out by other
organisations, these operate as sub-
contractors to the main contractor
and do not enter into direct
contractual relations with the
employer 27. However, where sub-
contractors are selected by the
employer 28, the main contractor’s
responsibility is frequently
circumscribed and a limited form of
contract is entered between the
employer and the chosen sub-
contractor.
Accordingly, the contractor
shoulders full responsibility and sole
liability for the design and
construction elements of the works
in so far as these are included within
the ambit of his obligations. In
instances of default or breach by the
contractor, the onus is not on the
employer to distinguish the particular
element involved be this design,
quality of materials or workmanship
or the party actually culpable. His
redress is solely at the contractor’s
expense 32.
Selection of the contractor is
normally based on competitive
tendering or negotiations and
payment effected on either an interim,
milestone or lump sum basis. It is
common under such an arrangement
to find that the supervisory powers
of the employer’s representative are
more limited than those of a contract
administrator under a traditional
general contract 33. Hence, unlike
traditional general contracting, the
employer’s representative plays a
limited administrative role which may
be confined to conducting
independent checks and auditing the
contractor’s works. The contractor,
his sub-contractors 34 and professional
advisors are responsible for all aspects
of the works inclusive of managing
the contract up to its final realization.
cover feature
■ Management contracts
A comparatively recent
development on large and complex
projects has been the emergence of
the ‘management contractor’, whose
only role is to manage, co-ordinate
and supervise the work of numerous
specialists by whom the whole of the
construction work is carried out.
Under a modern management
contract, these specialists are
employed as sub-contractors 35 to the
main or management contractor 36,
but the latter is relieved of any
responsibility to the employer for sub-
contractor defaults 37. The underlying
philosophy of this species of contract
procurement is that the management
of the construction process constitutes
a particular expertise which can be
distinctly identified and accordingly
addressed through the employment of
the management contractor. The
latter is for all intents and purposes
not a builder in the strict sense but
an independent professional
providing essentially a management
service. This common thread runs,
in addition through the construction
management route of contract
procurement 38.
Compared to traditional general
contracting or design and build types
of contracts, management contracting

■ Design and Build Contracts

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

THE INGENIEUR 9
cover feature
is unfortunately deficient in the
availability of standard forms of
conditions of contract. On the local
level, no particular authority,
institution or body has published any
such form. Hence, there is a tendency
to use either ‘bespoke’ forms or
modified foreign forms such as JCT
MC 87 39 or the ICE New Engineering
Contract 40.
■ Construction management
As aptly named, construction
management contracts are a sub-set
of the general corpus of management
type of contracts and as such share
common characteristics with
management contracts. These have
metamorphosed recently into an
alternative to the latter type of
contracts and are being employed
mainly on large and complex projects
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.
The tendency is to either employ a
‘bespoke’ form or to use the JCT CM
94 Form 44, albeit in a modified form.
A further alternative is to draw up a
series of contracts i.e. between the
employers and firstly the construction
manager, secondly each member of
the design team and thirdly each
specialist trade contractor.
■ Hybrids
In addition to the main types of
contract strategy described above,
there have also developed hybrids
such as 45:
(i) ‘Develop and construct’ contract: There are no published standard
this is similar to a design and form contracts governing any of the
build contract, but a concept above hybrids and the practice is to
design is prepared by employ ‘ad hoc’ or ‘bespoke’ forms
independent professionals customized for the particular project
engaged by the employer before or application.
the design and build contractor
is selected 46; ■ Term contracts
(ii) ‘Design and manage’ contract: A ‘term contract’ is one by which
This is similar to a management an employer seeks to make provision
contract, but the contractor is for the carrying out of certain
also responsible for detailed categories of work (usually minor
design or for managing the works of alteration or repair and/or
design process; maintenance) during a specified
period of time 47. Depending upon the
(iii) ‘Design and construction terms on which tenders are invited
management’ contract: This is and accepted, the resulting legal
similar to construction relationship may be a contract which
management but the construction binds the contractor to carry out
manager is also responsible for whatever work of the specified
detailed design or for managing description the employer chooses to
the design process. order during the period stated 48.
39. JCT Standard Form of Management Contract (1987 Edn).
40. ICE New Engineering Contract Option F - Management Contract.
41. See ‘Construction Management Form - Report and Guidance’ the Centre for
Strategic Studies in Construction, University of Reading [1991].
42. Also called ‘Trade Contractors’ or ‘Works Contractors’.
43. See Rosehaugh Stanhope (Broadgate phase 6) plc v Redpath Dorman Long Ltd.
[1990] 50 BLR 69, CA; Beaufort House Development Ltd v Zimmcor (International)
Inc [1990] 50 BLR 91, CA.
44. The JCT Standard Form of Construction Management (1994 Edition).
45. See Piyush Joshi ‘Law Relating to Infrastructure Projects’ at P22-25.
46. This being basically to avoid the purported shortcomings of the other forms of
‘Package Deal’ types of contracts.
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.
48. Percival Ltd. v LCC Asylums and Mental Deficiency Committee (1918) 87 LJKB
677. The JCT Measured Term Contract (1989) permits either party to determine
the contract by giving notice, but requires the contractor to carry out all orders
which can be completed before the expiry of such notice.
T H E I N G E N I E U R 10

Alternatively, the acceptance of a
tender may result in a ‘standing offer’
by the contractor, which ripens into
a contract on each occasion that an
order is placed but which may be
revoked at any time 49.
At the moment, there is no local
standard form of conditions of
contract for a term contract though
there is a tendency to either modify
the JCT Standard Form of Measured
Term Contract (1989 Edition) or to
generate ‘bespoke’ forms.
■ Miscellaneous Contracts
Over and above the common
methods of contract procurement
described above, there exist other
types of contracts that are being
utilized by the local construction
industry. These are essentially
variations of the conventional
methods and have been developed
to address specific uses. Such
contracts include, inter alia, the
following:
(i) ‘Build, operate and transfer 50
contract’: This is a type of a
privately financed contract
whereby the contractor finances
the project, designs it,
undertakes the construction,
owns and operates it over the
concession period and on its
expiry transfers the beneficial
ownership of the project back to
the employer 51.
(ii) ‘Serial contract’: This is a contract
resulting from a procedure called
‘serial tendering’. Fundamentally,
a serial tender is a standing offer
to carry out work for more than
one project in accordance with
the tender submitted for the
initial project, or based on
hypothetical bills of quantities
representing the average project
of a series 52.
(iii) ‘Continuation contract’: This is an
‘ad hoc’ arrangement to extend
the scope of the initial or original
contract beyond its original
ambit i.e. there is no standing
offer to do more work than that
originally envisaged. The
cover feature
original and continuation There are no published local
contracts are dealt with standard forms of conditions of
separately. If and when the latter contract governing the above
arises, the original contract may miscellaneous contracts and use is
be used as a basis for realizing made of ‘ad hoc’ or ‘bespoke’ forms.
the continuation contract 53
SPECIAL PARTIES
(iv) ‘Periodic contract’: This is similar
to a term contract, but the ■ The Government departments
execution of work or supply of
goods is required at intervals, The extent to which contracts can
regularly or on demand rather be made on behalf of the Federal
than being continuous for a Government, and the Governments of
stated time 54. the states is governed by the
Government Contracts Act 1949 57.
(v) ‘Partnering contract’: This For the procedure pertaining to the
contract is in essence an enforcement of such contracts and
extension to the normal serial matters relating to proceedings by and
contract whereby over a pre- against the Federal Government and
determined period of time, the the Government of the states, the
contractor automatically receives applicable statutes are the
all new contracts from the Government Contracts Act 1949 and
employer with payment to be The Government Proceedings Act
made by reference to an initially 1956 58.
agreed formula 55. In general, a construction contract
entered into on behalf of the
(vi) ‘Independent contract’: This is Government 59 is enforceable by and
essentially a ‘contract for against the Government.
services’ whereby the party Accordingly, the Government is
undertaking a stipulated task for bound by a contract made by a proper
an agreed consideration is free to agent acting within the scope of his
select his own mode of doing it. authority but not otherwise 60. A
He is neither under the control Government Officer who enters into
or direction of the other 56. a contract within the scope of his
49. Great Northern Rly Co v Witham [1873] LR 9 CP 16.
50. Also called ‘BOT’ Contract. See also Piyush Joshi ‘Law Relating to Infrastructure
Projects’ at P22-25.
51. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
Pre-Contract Award Practice’ at P132-138.
52. See The Aqua Group ‘Tenders and Contracts for Building’ (2nd Edn.) at P 119.
53. See Ir. Harbans Singh K.S ‘Engineering and Construction Contracts Management:
Law and Principles’ at P256.
54. See Robinson, Lavers, Tan & Chan ‘Construction Law in Singapore and Malaysia’
[2nd Edn.] at P428.
55. See ‘Dispute Avoidance and Resolution Task Force (DART) of the American
Arbitration Association Report on partnering at P86.
56. E.g. Consultants, Suppliers, etc. See Stevenson Jordan & Harrison v MacDonald &
Evans [1952] 1 TLR 101 and Syed Mubarak bin Syed Ahmad v Majlis Peguam
Negara [2001] 4 MLJ 167.
57. Rev. 1973 (Act 120)
58. Rev. 1988 (Act 359). See generally also the Rules of the High Court 1980 Ord. 73
for proceeding by and against the Government.
59. It does not include municipal councils and public corporations.
60. Under the Government Contract Act 1949 (Act 120) SS 2 & 3, all contracts made
in Malaysia on behalf of the Government shall, if reduced in writing, be made in
the name of the Government and signed or authorized as provided for under the
Act. Any authorization under S 2 or 3 shall be in the form set out in the schedule
to the Government Contracts Act 1949 (Act 120).
T H E I N G E N I E U R 11
cover feature
authority is not liable to be sued
personally upon any contract
m a d e i n t h a t c a p a c i t y 61 .
Ac t i o n s b y o r a g a i n s t t h e
Government are instituted or
defended by the Attorney
General 62.
■ Local authorities
A local authority 63 may
enter into contracts inclusive of
construction contracts
necessary for the discharge of
any of its functions 64. A local
authority must make standing
orders with regard to contracts
for the execution of works or
the supply of goods or materials
65
. However, a contractor is not
bound to inquire whether the
relevant standing orders have
been complied with, and non-
compliance by itself does not
invalidate any contract 66 .
A local authority is bound by
any contract entered into by a
committee to which the necessary
powers have been delegated 67, or
by any officer acting within his
actual or ostensible authority 68 .
Protection is afforded to local
authorities or persons acting in the
execution of statutory or other
public duties in respect of any act,
neglect or default done or
committed by the Public
Authorities Protection Act 1948 69.
■ Companies, corporations and
partnerships
Companies, corporations and
partnerships may enter into
construction contracts like any
other person. In fact the formalities
required for the execution of
contracts by companies,
corporations and partnerships are
effectively identical to those for
individuals, save for particular
requirements as stipulated in the
respective statutory enactments 70.
A company may choose to make a
contract in writing, under its
common seal or a contract may be
made on behalf of the person by
any person under its express or
implied authority 71.
Contracts made by or on
behalf of a corporation which
if made by private persons
would be required to be in
writing, or which would be
valid although made by parole
only, may be similarly made on
behalf of a corporation by any
person acting under its express
or implied authority whether
by seal or not.
For partnerships 72 , when
either party is a member of the
partnership, the partnership
will be liable under the contract
if the contracting party was
acting within the scope of his
authority 73 . In general, a
member of a partnership is
regarded as an agent of the
firm and binds the other
partners in making any
contract falling within the
normal course of business of
the firm 74.
61. Government Contracts Act 1949 (Act 120) S 8 also provides that a public officer
shall be personally liable when he expressly pledges his personal credit or where
he contracts otherwise than as an agent of the Government. According to S 6, no
contracts entered into except in accordance with the Act shall be deemed to have
been made by the authority of the Government. See also Dunn v Macdonald
[1897] 1 QB 401; affd [1897] 1 QB 555, CA; Sim Siok Eng v Government of Malaysia
[1978] 1 MLJ 15.
62. For the Federal Government, the Attorney General. For the state of Sabah and
Sarawak, the Attorney General of such state and for all other states, the Legal
Advisor of such state.
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
shall be a body corporate.
64. See Local Government Act 1976 (Act 171) S 36(1).
65. See Local Government Act 1976 (Act 171) S 36(2).
66. See North West Leicestershire District Council v East Midlands Housing Association
Ltd. [1981] 3 All ER 364, [1981] 1 WLR 1396, CA.
67. See Local Government Act 1976 (Act 171) S 36(2).
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
Contractors v Bexley Corpn [1962] 60 LGR 331. Cf North West Leicestershire District
Council v East Midlands Housing Association Ltd. [1981] 3 All ER 364, [1981] 1
WLR 1396, CA.
69. Act 198, See also Local Government Act 1976 (Act 171) S124.
70. See e.g. Companies Act 1965 (Act 125), Partnership Act 1961 (Act 135), etc.
71. Companies Act 1965 (Act 125) S 35(4).
72. For a definition of a partnership see Partnership Act 1961 (Act 135) S 3(1) and
Gulazam v Noorazman and Sobath [1957] 23 MLJ 45; Ratna Ammal & Anor v Tan
Chow Soo [1964] 30 MLJ 399.
73. See Partnership Act 1961 (Act 135) S 7 & 8. See also Pembinaan Thin Chai Sdn
Bhd v Citra Muda Sdn Bhd & Anor [2002] 3 MLJ 107.
74. See Chan King Yue v Lee @ Wong [1962] MLJ 379; Bannatyne v D&C Mac Iyer
[1906] 1 K.B. 103.
T H E I N G E N I E U R 12
cover feature
FORMATION OF CONTRACT
■ Negotiated contracts
The formation of construction
contracts is governed by the ordinary
contractual rules of offer and
acceptance 75. Where a contractor
quotes a price for works in a document
headed ‘estimate’ this may be treated
as an offer 76. Acceptance must be
absolute and unqualified 77 and in full
conformity with any requirements laid
down in the offer 78.
Any purported acceptance may, if
it alters the terms of the offer or
introduces new terms, be regarded as
a counter-offer and thus a rejection
of the original offer 79. Where the
parties ‘negotiate’ by delivering
inconsistent standard-form documents
to each other, the usual outcome is
that, when work commences or
materials are supplied, this will be
deemed to constitute acceptance of the
last document delivered 80.
Where a contract is concluded after
the contractor has commenced the
works, it may easily be concluded that
the parties intended the contract to
govern all the work, including what
has already been done 81.
■ Tenders
In general, an invitation to
contractors to submit tenders to carry
out construction works is not an offer
but merely an invitation to treat 82;
the employer is in consequence under
no obligation to accept the lowest or
any of the tenders received 83 .
However, an express undertaking by
the employer to accept the lowest
tender will be binding upon the
submission of a tender which conforms
with any conditions laid down 84.
Moreover, the employer may in other
cases be under an implied obligation
to give reasonable consideration to any
tender submitted in accordance with
the published conditions 85.
The unconditional acceptance of a
tender creates a binding contract. Until
such acceptance occurs, the contractor
is free to withdraw his tender 86 by
giving notice of withdrawal to the
employer 87 . This will be so
notwithstanding any undertaking by
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
deed or given for consideration 89. relationship which is brought into
An unsuccessful tenderer is existence by the acceptance of a tender
normally not entitled to recover the depends upon the terms of the
cost of preparing his tender from the invitation to tender.
employer 90 , except where the
invitation to tender was given ■ Purchase Orders
fraudulently and without any intention
of accepting it in any event 91 . The purchase order system is one
However, a promise by the employer of the methods of contract
to pay for such services may be implied procurement based essentially on the
where the work involved far exceeds nature of the work and its value
what would normally be required of utilized by employers as distinct from
the contractor or where the employer the tender system discussed above 93.
is able to make profitable use of the Synonymous with the ‘quotation’
information supplied 92. system, the purchase order system is
Where an employer invites tenders used principally for minor works 94.
from contractors to supply such work The calling of quotations by the
75. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts Management:
Law and Principles’ at P61 to 81.
76. Croshaw v Pritchard and Renwick [1899] 16 TLR 45. An inaccurate estimate
which is not an offer may give rise to liability in the tort of negligence: see J & J C
Abrams Ltd v Ancliffe [1978] 2 NZLR 420.
77. Section 7(a) Contracts Act 1950 (Act 136).
78. See Rajeswari Thedshana Murthy v Kin Nam Realty Development Sdn. Bhd. [1993]
1 MLJ 88.
79. Hyde v Wrench [1840] 3 Beav. 334, 49 ER 132; Trollope & Colls Ltd. and Holland,
Hannen & Cubitts Ltd. v Atomic Power Construction Ltd. [1962] 3 All ER 1035.
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.
81. Trollope & Colls Ltd and Holland, Hannen & Cubitts Ltd v Atomic Power
Constructions Ltd [1962] 3 All ER 1035 [1963] 1 WLR 333.
82. Defined by Lord Parker as ‘an offer to receive offers’ in Fisher v Bell [1961] QB 394.
83. Spencer v Harding [1870] LR 5 CP 561.
84. Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC
207, [1985] 2 All ER 966, HL.
85. Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3
All ER 25, [1990] 1 WLR 1195, CA; cf Fairclough Building Ltd v Port Talbot
Borough Council [1992] 62 BLR 82, CA; Hughes Aircraft Systems
International v Airservices Australia [1997] 146 ALR 1.
86. Section 5(1) Contracts Act 1950 (Act 136).
87. Section 6 Contracts Act 1950 (Act 136). See also Cook Islands Shipping
Co Ltd v Colson Builders Ltd [1975] 1 NZLR 422.
88. Routledge v Grant [1828] 4 Bing 653; Dickinson v Dodds [1876] 2 Ch D
463.
89. The Canadian courts have upheld such undertakings despite the absence
of consideration: see R v Ron Engineering Ltd [1981] 119 DLR (3d) 267.
Most local employers protect themselves against withdrawal by requiring
the contractor to furnish a ‘tender’ or ‘bid’ bond.
90. Harris v Nickerson [1873] LR 8 QB 286; William Lacey (Hounslow) Ltd v
Davis [1957] 2 All ER 712 at 715.
91. Richardson v Silvester [1873] LR 9 QB 34.
92. William Lacey (Hounslow) Ltd. v Davis [1957] 2 All ER 712, [1957] 1 WLR
132; Marston Construction Co. Ltd. v Kigass Ltd. [1989] 46 BLR 109.
93. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contract
Management: Pre-Contract Award Practice’ at P511 to 515.
94. E.g. supply items, repair, renovation, maintenance, etc.
T H E I N G E N I E U R 14

employer is in the legal sense
tantamount to an invitation to treat.
The contractor’s submission of a
quotation in response to the
employer’s request will legally
constitute the making of an ‘offer’
or ‘proposal’. The mere labelling of
the submission as a quotation is not
conclusive of its legal effect. The
contents will have to be carefully
scrutinized to elicit the intention of
the submitting party 95. The formal
issue of the purchase order by the
employer constitutes an acceptance
of the quotation (or offer) in the
contractual sense and thereby
perfects the contract.
■ Letters of intent
A letter of intent is a document
which expresses an intention to enter
into a contract with the recipient at
some time in the future 96. Its legal
effects, if any, depend upon the true
construction of the words used 97 and
the relevant circumstances between
the parties 98. The document may
have no legal effect at all 99; it may
constitute an offer of payment which
the recipient is free to accept by
performance of specified services 100;
cover feature
or (exceptionally) it may create an since consideration exists in the
ancillary or interim contract which form of an implied promise by the
will entitle the recipient to recover his employer to pay a reasonable sum.
wasted costs if the intended future A promise by an employer to pay
contract does not materialize 101. an additional sum in return for the
Where a letter of intent does not contractor’s mere carrying out of
result in any kind of contractual existing contractual obligations is
relationship, a recipient who carries given without consideration and is
out work in accordance with its thus unenforceable 105, unless the
terms may nevertheless be entitled court is able to discern sufficient
to payments on a restitutionary practical benefit to the employer
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 .
basis. Furthermore, a contractor may file
a claim on an act done prior to a
■ Consideration promise made by the employer
provided the contractor had done
To be enforceable at law, a or abstained from doing something
promise must be supported by pursuant to the desire of the
valuable consideration 103 . A employer and not necessarily in
unilateral declaration is not enough pursuance of a promise to be made
to make a contract and that no by the latter 107.
question of contract under seal
arises unless it falls within one of ■ Formalities
the exceptions in Section 26 of the
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
undertaking by a contractor to the formation of a construction
carry out work where no price is contract requires no particular
agreed is generally enforceable, formalities. Such a contract may
95. Croshaw v Pritchard [1899] 16 TLR 45. See also Zain Azahari bin Zainal
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
cover feature
be validly made orally 108 , by
conduct or in writing. Contracts by
conduct are difficult to establish
evidentially and are often
encountered where parties have had
a course of dealing before. A further
illustration of the above, occasions
where an employer makes an offer
to a contractor for the performance
of certain works upon stated terms,
and without making any express
acceptance, or counter-offer, the
contractor carries out the work 109.
The bulk of construction contracts
are either in writing 110 or evidenced
in writing 111. Written evidence is
also required for a contract of
guarantee 112 , under which the
contractual performance of one of
the parties is guaranteed by a third
party.
SCOPE OF CONTRACT
■ Contract documents
There are no particular
restrictions upon the documents
by which a construction contract
may be formed. It is trite that the
contents of the said documents
must accurately and completely
record the express terms and
conditions of agreement reached
by the parties inclusive of all
rights, duties, obligations and
liabilities. The following is a brief
description of the types of
documents which constitute the
contract documents 113 :
(i) Agreement or articles of
agreement: This document 114
describes in general terms the
parties, the contract works and
the price, and evidences the
intention of the parties to be
bound;
(ii) Conditions of contract: Detailed
conditions, often in standard
form 115 (with or without
amendments), amplify and
explain the basic obligations of
the parties and lay down
administrative procedures to be
followed during the progress of
the works;
(iii) Appendix to the conditions: of construction, quality of
Certain information specific to finishes and standards of
a particular contract, such as workmanship 117 to be provided.
dates of commencement or It may also specify levels of
completion and amounts of performance which individual
liquidated damages, is items of work are required to
commonly required to be achieve;
inserted by the parties in an
Appendix to the conditions (vi) Bill of quantities: This
before the contract is executed; document itemises in great
detail the contract work as
(iv) Drawings and plans: Drawings described in the drawings and
are prepared by whoever is the specifications 118. It may,
responsible to the employer for but need not constitute an
the design of all or part of the exhaustive statement of the
proposed works, and are the work which the contractor
major vehicle for conveying the undertakes to perform in return
intentions of the designer to the for the agreed price. Where, as
contractor. Among other is common, the bill of quantities
matters, they provide is required by the contract to
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
parts of the proposed works; from the prescribed method
may entitle the contractor to
(v) Specifications: This document claim payment for additional
amplifies the contract drawings work 120;
by providing a verbal
description of such methods as (vii) Schedule of rates 121: Where
the scope of work 116, methods there are no priced bill of
108. In practice most domestic sub-contracts and minor works are made orally. The
principal problem here is merely from the evidential point of view in the event of
a dispute.
109. Peter Lind & Co. Ltd. v Mersey Docks & Harbour Board [1972] 2 Lloyd’s Rep. 235;
New Zealand Shipping Co. Ltd. v Satterthwaite & Co. Ltd. [1975] A.C. 154 (P.C.).
110. See Section 10(2) Contracts Act 1950 (Act 136).
111. As required by a particular statutory enactment.
112. Although Section 79 Contracts Act 1950 (Act 136) permits the guarantee to be
also in an oral form.
113. The actual contents varies with the type of contract and the requirements of the
particular form of contract used. For further details see Ir. Harbans Singh K.S.
‘Engineering and Construction Contracts Management: Pre-Contract Award
Practice’ at P536 to 574.
114. Or an informal equivalent such as an exchange of correspondence indicating offer
and acceptance.
115. Sometimes ‘bespoke’ or ‘ad hoc’.
116. For contract based on Drawings and Specifications. See JKR Form 203 (Rev. 10/
83).
117. And design where this is part of the contractor’s scope.
118. Bills of quantities (or B.Q.) may not be required for smaller or less complex projects
where the drawings and specifications themselves provide sufficient information
or in the event the contract is of the ‘package deal’ type.
119. For building works this is currently the ‘Standard Method of Measurement of
Building Works’ as published by the Institution of Surveyors, Malaysia and for
Civil Engineering is the ‘Civil Engineering Standard Method of Measurement’
(CESMM) as published by CIDB, Malaysia.
120. See C Bryant & Son Ltd v Birmingham Hospital Saturday Fund [1938] 1 All ER 503.
121. Also called ‘Schedule of Unit Rates’ in some contracts.
T H E I N G E N I E U R 16
cover feature

quantities 122 , a document executed by the parties. The Construction of Contract

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

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

T H E I N G E N I E U R 18

resolved, it will be construed
adversely to the party who
proffered it for execution under
the ‘contra proferantum’ rule 132 .
In seeking the meaning of a
contract, written words are
normally presumed to take
precedence over printed words in
the event of inconsistency 133 .
However, this presumption can be
reversed by a clear provision in
the contract 134 . Furthermore,
clauses and words are to be
construed not by itself standing
alone, but in the light of other
words appearing in the context in
which it is used and all other
c l a u s e s r e l a t i n g t h e r e b y 135.
Where possible, the grammatical
and ordinary sense of words is to
be adhered to, unless they lead to
some absurdity or to some
repugnance or inconsistency with
the rest of the document, in which
case the words may be modified
so as to avoid that absurdity or
inconsistency 136.
The construction of a contract
also involves the application of a
host of cannons of construction
a n d p r o c e d u r a l g u i d e s 137
including the following, namely,
words as interpreted must be
consistent with the spirit and
l e t t e r o f t h e a g r e e m e n t 138,
typographical errors may be
corrected to give effect to the
parties’ intention 139, the contract
must be construed as at the date
i t w a s m a d e 140 a n d a i d s t o
interpretation within the contract
document itself be considered in
the construction process. Where
a contract is partly oral or made
by conduct 141 , the ascertainment
of the terms of the contract is a
question of fact 142 .
Implied Terms
A construction contract may be
subject to certain terms that are
expressly included in the contract.
In seeking to establish the intention
of the parties to a contract, certain
terms need to be implied 143; these
being namely by custom and usage
cover feature
pertaining to a particular type of two broad categories may be
transaction 144, the courts based on discerned 147. First, there are those
the intention of the parties 145 and usual terms which the law implies into
certain provisions contained in all contracts of a certain type unless
statute, or generally by law 146. the parties have shown an intention
There is a paucity of terms to exclude or modify them. In relation
implied by custom and usage and to construction contracts, such
by statute or law in construction implied terms include the employer’s
contracts. However, in respect of obligations to co-operate with and not
construction contracts, the courts do to hinder the contractor and the
make various implications of which contractor’s obligations as to the
standard of work and the time for
completion.
Second, a term may be implied
into an individual contract where the
court finds that the parties must have
intended it to form part of their
contract 148, and where the transaction
would otherwise be inefficacious,
futile and absurd 149. The conditions
for such an implication are that it
132. Per Lord Brightman in Kandasami v Mohamed Mustafa [1983] 2 MLJ 85, [1983]
4 PCC 183, PC. For a recent application of this rule see MBF Finance Bhd v
Sim Peng Bee @ Sim Bay Bee & Anor [2003] 5 MLJ 303.
133. Robertson v French [1803] 3 East 130 applied in Bumiputera Malaysia Berhad
Kuala Trengganu v Mae Perkayuan Sdn. Bhd. [1998] 2 MLJ 76; [1993] 1 SCR
385, SC.
134. John Mowlem & Co Ltd v British Insulated Callenders Pension Trust Ltd [1977]
3 Con LR 64, DC.
135. Per Salleh Abbas FJ in Trengganu State Economic Development Corporation v
Nade Finco Ltd. [1982] 1 MLJ 365, FC.
136. Grey v Pearson [1875] 6 HLC 61 at 106. See also Polygram Records Sdn. Bhd.
v The Search & Anor [1994] 3 MLJ 127, HC.
137. See Ir. Harbans Singh K.S. ‘Engineering and Construction Contracts
Management: Law and Principles’ at P292 to 299.
138. Lim Yee Teck & Ors v Shell (M) Trading Sdn. Bhd. [1985] 2 MLJ, 265; [1985] 4
PCC 433, PC.
139. Ng Siew Wah & Ors v MAA Holdings Sdn. Bhd. & Anor [1985] 2 MLJ 332, SC.
140. City Investments Sdn. Bhd. v Koperasi Serbaguna Cuepacs Tanggungan Berhad
[1985] 1 MLJ 285, FC, [1988] 1 SCR 122; 4 PCC 709, PC
141. Allen v Pink [1838] 4 M & W 140; J Evans & Sons (Portsmouth) Ltd v Andrea
Merzario Ltd [1976] 2 All ER 930, CA.
142. Smith v Hughes [1871] LR 6 QB 597; British Crane Hire Corpn v Ipswich Plant
Hire Ltd [1975] QB 303 1 All ER 1059, CA.
143. Hamid Abdul Rashid, Dr. v Jurusan Malaysia Consultants (Sued as a Firm) [1997]
1 AMR 637.
144. Hamzah & Yeang Sdn. Bhd. v Lazar Sdn. Bhd. [1985] 1 CLJ 72, FC and Udachin
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.
146. E.g. S14 to 16 Sale of Goods Act 1957 (Act 382), S6 Hire Purchase Act 1967
(Act 212), etc.
147. Liverpool City Council v Irwin [1977] AC 239 at 255,257, HL.
148. Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 2
All ER 260 at 268, HL, per Lord Pearson.
149. Liverpool City Council v Irwin [1977] AC 239 at 263, HL, per Lord Salmon and
Hamid Abdul Rashid, Dr. v Jurusan Malaysia Consultants (Sued as a Firm) [1997] 1
AMR 637.
T H E I N G E N I E U R 19
cover feature
must be reasonable and equitable; it
must be necessary to give business
efficacy to the contract, so that no
term will be implied if the contract is
effective without it 150; it must be
so obvious that ‘it goes without
saying’ 151; it must be capable of clear
expression and it must not contradict
any express term of the contract 152.
Where the parties have contracted on
the basis of a detailed standard form
document, the courts are generally
unwilling to imply terms on this basis,
even where to do so would improve
the contract 153; although there are
exceptions 154.
SUMMARY
Construction contracts are as
varied in their form nature, type and
content as there the projects or works
they circumscribe within their ambit.
From a mere handshake agreement to
a multi-party, multi-volume express
document, they span the complete
spectrum of contracts that are hitherto
known to mankind. Whatever the
purpose behind their conception and
eventual formalization, the
importance of construction contracts
especially in Malaysia has evolved
over the years as the construction
industry has matured from ad-hoc
arrangements into formal/legalistic
relationships evidenced by express
pronouncements of the parties’
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
dealings, rights, obligations and Sdn. Bhd.
liabilities. It can therefore be inferred
that this metamorphosis has served 3. Piyush Joshi ‘Law Relating to
as the seed of crystallization of the Infrastructure Projects’,
species of contracts called Butterworths
‘construction’ contracts; the topic of 4. Robinson, Lavers, Tan & Chan,
review of this article. ‘Construction Law in
Legal practitioners are well Singapore and Malaysia’ [2nd
conversant with the intricacies of the Edn.], Butterworths.
subject matter at hand. However,
most of the players in the construction 5. Sir Peter Mallet, ‘The
industry such as engineers, architects, Encyclopedia of Forms and
quantity surveyors, employers, etc. Precedents: Building and
have at most times a fairly Engineering Contracts’ [5th
rudimentary awareness of the Edn.], Butterworths.
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
trained practitioner, this can be Edn.]
intimidating and practically mind
boggling. Perhaps, the essence of the 7. V. Sinnadurai, ‘Law of
instant paper will equip such Contract’ [3 rd Edn.] Lexis-
practitioners with the basic Nexis-Butterworths. BEM
150. ‘The Moorcock’ [1889] PD 64 at P68 applied in Sababumi (Sandakan) Sdn. Bhd. v
Datuk Yap Pak Leong [1998] 3 MLJ 151, FC; [1997] 1 MLJ 587, CA.
151. Reigate v Union Manufacturing Co (Rambottom) Ltd. [1918] 1 KB 592; and Yap
Nyo Nyok v Bath Pharmacy Sdn. Bhd. [1993] 2 MLJ 25, HC.
152. BP Refinery (Westernport) Pty Ltd v Hastings Shire Council [1977] 52 ALJR 20 at
26, PC.
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 &
Associates Sdn. v Pembenaan Udarama Sdn. Bhd. [1980] 2 MLJ 26, FC (no implied
term that developer was able to carry on the project at or reasonably near the
architect’s estimated costs), etc.
154. See Bruno Zornow (Builders) Ltd v Beechcroft Developments Ltd [1990] 51 BLR 16
(implication of fixed date for completion). 143. Hamid Abdul Rashid, Dr. v Jurusan
Malaysia Consultants (Sued as a Firm) [1997] 1 AMR 637.
T H E I N G E N I E U R 20