20090716-PAM 2006-A User's Manual

CHARLTON MARTIN ONE DAY SEMINAR
PAM 2006 A USERS MANUAL THURSDAY 16 JULY 2009
Mission and Vision

Our mission is to provide high quality consultancy services which are relevant to our clients needs and circumstances in any particular situation. Our vision is to be the construction contracts consultant of choice within the Asia Pacific Region.
www.charltonmartin.com
About Charlton Martin Group

Worldwide construction contract consultancy provider dealing specifically with the many disputes and varied problems frequently arising in: Construction Engineering Oil & Gas Power Process Petrochemical
About Charlton Martin Group

Mike Charlton and Rod Martin have combined in excess of thirty five years experience of working in the Asia Pacific region.
Previously as CEO and Group Regional Director (Asia), respectively of the Knowles Group they successfully managed, developed and maintained the Knowles consultancy businesses in Asia.
In 2007, they started their own consultancy practice across Asia Pacific and now have businesses in Hong Kong, Singapore and Malaysia
Our Offices
Hong Kong
Malaysia
Singapore International Consultancy Coverage
Our Services
Advice and Detailed Analysis of Contractual Problems
Whether the problem has arisen under a standard form of contract or sub-contract or under any other form of contract, definitive advice and analysis of any problem or dispute can be provided. Detailed guidance on administration of main contracts and sub-contracts generally throughout the project is also offered.
Contractual Claims
Choice of Contract
Preparation of Contract Documents
On behalf of Employers / Owners
On behalf of Contractors / Sub-Contractors
Advice on the appropriate form of contract and method of appointment of a contractor or sub-contractor Advice to the Employer/Owner on contract procedures, administration of the contract and potential problem areas.
Drafting contracts, subcontracts, Joint Venture agreements; modifying standard forms of contract and sub-contract; drafting special conditions and preliminary clauses; checking contract documents and advising on suitability.
Our Services
Regular Advice Throughout the Project (Retainer Services)
Regular attendance at employers/owners, contractors' or subcontractors' offices, at monthly or other suitable intervals, discuss financial and contractual difficulties and disputes on all current contracts. Advice on notices to be given under the contract. Dealing with correspondence between employers, consultants, main contractor, sub contractors and suppliers.
Arbitration
Mediation
Expert Witness Services
As arbitration advisers, preparing a client's case from issuing a notice of arbitration including advice on the appointment of an arbitrator, preparation of pleadings, discovery of documents and representing a party before the arbitral tribunal. For many of our clients, arbitration is an unfamiliar process. We explain the process and procedures adopted which are required to be followed in detail.
As representative of a party with a dispute referred to mediation, we explain the procedure and assist to prepare for the entire process including drafting agreements upon successful closure. We also act as the appointed mediator in disputes referred to mediation.
Preparation of Expert Witness reports on most construction matters, including claims evaluation, delay analysis, etc., with subsequent attendance at litigation or arbitration proceedings as necessary.
Our Services
Project Planning / Project Management Services
Providing planning, coordination and management of projects from inception through to completion. Adhoc planning services to support Extension of Time claims prepared on behalf of Contractors or to defend the Employer's position on receipt of such claims from Contractors.
Seminars & Training
Staff Secondment
Professional Search Services

We work in partnership with our Clients to source the best talent for their organisation. The search for the right candidate can be specifically directed only to those who possess the potential to fill the role in a broader capacity than simply having the right qualifications.
The whole spectrum of construction contracts and construction related topics is covered, and training is organised to suit individual client's requirements either "in house" or at public venues. The training service includes provision of comprehensive training material and provision of experienced lecturers and all organisational matters. Public seminars are presented regularly with subject matter relevant to construction contracts and related topics.
Secondment of Contract Administrators and Project Managers to site, together with full back up as required. This service is flexible and caters to Employers/Owners, Contractors and Subcontractors needs on live construction projects irrespective of the size, location or nature of the project.
Programme
09:10 10:00 10:00 10:40 10:40 11:00 11:00 12:00 12:00 12:30 12:30 14:00 14:00 14:45 14:45 15:30 15:30 15:45 15:45 16:30 16:30 17:00 17:00 Session 1 Rodney Martin Session 2 Michael Charlton Tea / Coffee Break Session 3 Rodney Martin Questions & Discussion Lunch Session 4 Michael Charlton Session 5 Rodney Martin Tea / Coffee Break Session 6 Michael Charlton Questions & Discussion Close
www.charltonmartin.com 10
Session 1 by Rodney Martin
11
Session 1
Introduction to Construction Contracts History of the PAM Form Background and Intended Use Structure of the Contract Definitions New Features and Key Changes in PAM 2006 Comparison with other Malaysian Forms
INTRODUCTION TO CONSTRUCTION CONTRACTS

What is a Construction Contract? A building contract is an entire contract for the sale of goods and work and labour for a lump sum price payable by installments as the goods are delivered and the work is done. (Lord Diplock Modern Engg v Gilbert-Ash 1974)
Note building contract now construction contract
Governed by the Contracts Act 1950
13
All elements of a simple contract must be present:

Offer Acceptance Consideration
As with any contract, the contract will be: Voidable if there has been fraud or misrepresentation by either
party
Void if there has been a mistake about a fundamental matter
14
Only the Contract Documents contain the terms of the contract
Distinguished from other documents available or representations made at time of tender E.g. Reps about site conditions or report on soil conditions Where these meant to be in or out of the contract? If out then of no legal effect If in then any inaccuracy causing loss has remedy in damages
15
Common Construction Contract Documents:

-Articles of Agreement -Conditions of Contract -Drawings -Bills of Quantities -Schedule of Rates -Specification -Other documents sometimes included (tender docs) Where the agreement is stated in contract documents difficult to argue that anything else is a term of the contract
16
Construction contract arrangements are now varied and complex

Traditional model Traditional model with partial design by contractor Design and Build Construction Management
Available Standard Forms

PAM IEM CIDB PWD International e.g. FIDIC
17
Why do we have Standard Forms?

Avoids re-inventing the wheel
Expense and time of setting out all rights and obligations of the parties for each project would be considerable
Provides high level of certainty

Contains the key principles of customs, practices and processes supported by judicial precedents handed down by the courts
18
HISTORY OF THE PAM FORM
PAM/ISM 1969 Form

Based on the JCT 1963 form with all its deficiencies
PAM 1998 Form

Comprehensively redrafted to deal with the problems of PAM 1969
PAM 2006 Form

Not a radical redraft but some important significant changes More of a facelift than a new model!
19
BACKGROUND AND INTENDED USE

PAM 2006 has two versions:
Lump Sum Contract Without Quantities (drawings and specs) Lump Sum Contract With Quantities
Adjustments to the Lump Sum for variations and loss & expense Modified entire contract to cater for interim payments and retention Subject to general law of contract (Contracts Act 1950 & case law)
20
Conditions Did you know?

PAM 2006 defines Conditions as the Conditions of Contract
Conditions in the legal sense has more precise meaning:

Contractual terms include both conditions and warranties A condition is an essential term of a contract A warranty is a less significant term than a condition Breach of condition = discharges from further performance of the contract (e.g. refusal to pay) Breach of warranty = damages (e.g. interest for late payment)
21
But thats not all

Many express terms exist within a standard form like PAM 2006
But certain terms may be implied into the contract : implied terms
Give business efficacy to the agreement Fill the gaps where the express terms do not deal with the subject matter in dispute
Courts use implied terms to represent:

presumed intention of the parties the commercial bargain of the contract
But only where necessary to give business efficacy and not otherwise
22
Examples of Implied Terms in Construction Contracts

The Employer will take all steps reasonably necessary to enable the Contractor to discharge his obligations under the contract and to execute the Works in a regular and orderly manner The Employer would not hinder or prevent the Contractor from carrying out his contractual obligations or from executing the Works in a regular and orderly manner.
23
Standard Forms To Amend or Not to Amend?

Standard Forms are recognisable, familiar and understood
Therefore good reasons not to amend

A no amendment policy may not suit all If amendments are necessary care must be taken to avoid disputes due to poor drafting
24
STRUCTURE OF THE PAM CONTRACT Articles of Agreement

Contain the Recitals (Agreement Date; Parties; and Nature & Description of the Work)
Articles
Contractors Obligations; Contract Sum; Architect & Other Consultants; Definitions; and Meanings
Attestation / Signatories of the Parties
Conditions of Contract
1 to 38
Appendix
Convenient collection of specific data for each contract such as LD amount, DLP period, Insurance cover, etc.
25
DEFINITIONS
41 new definitions (59 in PAM 2006 versus 18 in PAM 98)
But many simply cross references with definitions in Conditions (e.g. see Variation and Practical Completion) Useful Source for reference purposes
Certain New Definitions to Note:
Day; Defects; Force Majeure; Lump Sum Contract; Person; Site
26
DEFINITIONS
Day
New definition under PAM 2006 Any day other than gazetted holiday at place of works Care must be taken when preparing programme and applying for EOT
Defects
New definition under PAM 2006 due to materials and workmanship not in accordance with the Contract Includes faulty design where Contractor carries out design Includes NSC defects
27
DEFINITIONS
Force Majeure
New definition under PAM 2006 Restricted definition But should reduce disputes
Lump Sum Contract

Fixed Price Contract subject only to adjustment as prescribed in contract Forgot to include Provisional Sums and PC Sums in definition
28
DEFINITIONS
Person
Used for ease of reference to describe the variety of legal entities which Consultants are capable of being from sole practitioner to limited liability company
Site
Includes other land and places obtained by the Contractor and accepted by the Employer as forming part of the Site.
29
NEW FEATURES AND KEY CHANGES IN PAM 2006

Rights to Set-off by Employer
Right to Interest for Late Payment

Right to Suspend the Works for Non-Payment
Retention Monies in Trust fund on Request
30
NEW FEATURES AND KEY CHANGES IN PAM 2006

Notices a Condition Precedent
7 Additional Relevant Events for Extension of Time including: Re-nomination of NSC / NS Suspension due to Non-Payment Definition of Variation
Adjudication
31
COMPARISON WITH OTHER MALAYSIAN FORMS

Private Sector PAM 2006 IEM Civil Engineering Construction 1989 IEM Mechanical & Electrical Installation 1994 CIDB Contract for Building Works 2000 No Malaysian Private Sector Design & Build Standard Form Public Sector PWD 203A / 203 PWD Design & Build / Turnkey Contract DB/T
Session 2 by Michael Charlton
33
1.0
Contractors Obligations
Clause 1.1 obligation to complete Works as required by Architect in accordance with Contract Not to the reasonable satisfaction of Architect as PAM 1998 avoids architect taking responsibility for exercising his discretion.
Clause 1.2 responsible for safety and adequacy of site operations irrespective of approval by Consultants temporary works = Contractors design responsibility
34
1.0
Contractors Obligations
Clause 1.3 Contractor responsible his alternative design must be fit for purpose (irrespective of approval by Consultants) Fit for purpose = higher standard than that imposed on architect or engineer, who must design to a reasonable level of skill and care If particular purpose not stated in Contract, Contractor only can design to fit normal purpose contemplated at time of Contract signing Advice Employer must state particular purpose in Contract Claiuse 1.4 no obligation to search for discrepancy or divergence
35
2.0
Architects Instructions
Clause 2.1 Forthwith comply with all A.I.
Time for compliance = not less than 7 days Contractor take care to comply, otherwise Employer engage others and backcharge Contractor
Advice- Contractor must start compliance before 7 days expire and ask for more time to complete compliance, if necessary. What is meant by comply? Contractor must Confirm verbal instruction as Confirmation of A.I. All A.I. must be in writing before Contractor receives certification for variation work, no provision for verbal instructions
3.0
Contract Documents, Programme and As-Built Drawings
Clause 3.1 certainty in order of precedence if discrepancy

3.1(a) 3.1(b) 3.1(c) the Letter of Award; the Articles of Agreement; the Conditions of Contract;
3.1(d)
3.1(e) 3.1(f)
the Contract Drawings;

the Contract Bills; and other documents incorporated in the Contract Documents, unless expressly stated to be excluded in any of the Contract Document.
37
3.0
Contract Documents, Programme and As-Built Drawings
Clause 3.4 Architect must issue construction drawings for Contractor to start construction on time as per Works Programme C responsible for managing the information Clause 3.6 programme not a contract document, but changes to specified sequence of work may be a variation (Clause 11.1(d)(iv)
Clause 3.7 Works Programme or updated Works Programme may basis for EOT claim and assessment
Contractor must apply to Architect in advance for detailed drawings record date application and date received drawings for future EOT claim
38
4.0
Statutory Obligations, Notices, Fees and Charges
Clause 4.2 Before start works, Contractor responsible to notify discrepancy between Contract Documents and laws, if he finds them
Architect must issue instruction , otherwise changes caused by laws = deemed variation
Contractor claim variation but difficulties if he carries out work as drawings which do not comply with statutory obligations
39
5.0
Levels and Setting Out of the Works
Clause 5.1 If error in Contractors setting out, Employer may make appropriate deduction for set-off
Unclear what is appropriate deduction
Ruxley v Forsyth [1996] - Contractor built swimming pool depth about 1 feet lesser than specification, court awarded loss of amenity as unreasonable to reinstate pool
40
6.0
Materials, Goods and Workmanship to Conform to Description, Testing and Inspection
Clause 6.1 all work to conform with Contract requirements, otherwise defective Clause 6.3 instruct open up works for inspection, difficulty if part of work complies and part does not Clause 6.5(e) option to deal with defects includes leaving defect in Works subject to appropriate set off by Employer see Ruxley v Forsyth [1996]
Warranty by Manufacturer does not release Contractor from liability
41
7.0
Royalties and Intellectual Property Rights
Clause 7.1 Contractor to indemnify Employer against loss or claim arising from Contractor infringing intellectual property rights (e.g. design rights)
42
8.0
Site Agent
Clause 8.1 Contractors site agent (normally project manager) must be competent and employed full time Frequently contract requirements lays down specific qualifications and experience
Clause 8.3 Architects power to remove incompetent site agent-but must NOT be unreasonable or vexatious avoid abuse
43
9.0
Access to the Works
Clause 9.1 Contractual right for Architect and Consultant to be given reasonable access to Works and to factories. Subcontracts to have same provision
44
10.0 Site Staff Clause 10.2 Instructions from Employers Site staff has NO effect unless:-
- instruction in writing
- Architect delegates authority to Site Staff in writing Directions involving variation to be confirmed by AI Site staff include clerks of works, resident architect or engineer, inspector or works etc
45
TEA / COFFEE BREAK
Session 3 by Rodney Martin
47
11.0 Variations Provisional and Prime Cost Sums

Why do we have Variation Clauses?
Employer given power to vary the Works as a right
No need to get Contractors agreement each time Architect has no implied authority to contract for the Employer Contractor would not get paid for AIs if no VO clause
Pre-agreed rules for valuing variations
PAM 2006 has a comprehensive Variations Clause


Definition of Variation (11.1) the alteration or modification of the design, quality or quantity of the Works including the addition, omission, or substitution of any work as well as the alteration of the kind or standard of any materials and goods to be used in the Works and the removal of any works other than defective work as instructed. also changes in: limitation of working hours working space access to or utilization of any part of the Site executing and completing the Works in any order
49

PAM 2006 has a comprehensive definition for Variations
Removed old PAM 98 change to alter the ultimate use to which the Works will be put which is an improvement otherwise the principle of the variation clause would be violated
Chadmax Plastics v Hansen 1984 variation omitting 98% of scope of work exceeded authority to vary the work
50

No Variation shall vitiate the contract (11.2)
Vitiate = to impair the legal validity of a contract But if the Variation is a valid Variation under the 11.1 definition how could it vitiate the contract?
Contractor to proceed pending valuation of the Variation (11.3)

Contractor must proceed with due diligence and expedition West Faulkner v Newham 1994 means: continuously, industriously and efficiently with appropriate physical resources So once Contractor receives a Variation Instruction he must get on with it whether or not the price is agreed
51

Architect may issue instructions after Practical Completion to deal with Appropriate Authority and Service Provider (11.3) But once Practical Completion achieved the Works are deemed complete and usually the power of Architect to issue Variation Instructions ends This makes 11.3 illogical either the work is complete or it is not AIs to be issued for expenditure of PC and Provisional Sums (11.4) Variations to be measured and valued by the QS (11.5)
52

Valuation Rules (11.6)
Apply Contract Rates and Prices - 11.6(a) Where Work is similar in character, executed under similar conditions and does not significantly change work in Contract Apply Fairly Adjusted Contract Rates and Prices - 11.6(b) Where work is similar in character, but executed under different conditions or similar character and conditions but there is a significant change in quantity of work Apply Fair Market Rates and Prices Determined by the QS - 11.6(c) Where work is not of similar character to work in Contract Apply Daywork Rates 11.6(d) Where work cannot be properly measured and valued in accordance with first three rules based on verified daywork sheets
53

Omitted Items to be valued at Contract Rates - 11.6(e)
If substantial change to the conditions in which remaining work carried out then the valuation rules apply for remaining work
Provisional Quantities to be re-measured and valued using Contract Rates
54

PAM 2006 Introduces fair market rates for work not of similar character
Radical departure from PAM 98 which maintained reference to Contract Rate Contractor takes no pricing risk for such work Contractor can dispute QSs determination of what is a fair market rate
Different from fair valuation which usually refers to the Contractors overall level of Contract Pricing and level of profitability
Charrington v Wooder (1914) market price of a commodity was to be construed with reference to the surrounding circumstances
55

Claims for loss & expense arising from a Variation (11.7)
Provided not recovered under any provision of 11.6 Strict compliance with notice requirements essential or right lost Initial estimate and calculations with notice within 28 days of AI or CAI Full particulars within 28 days of completion of Variation Amount ascertained to be included in interim certificates and added to Contract Sum
56
12.0 Contract Bills

The relevance of the BQ as a Contract Document (12.1)
BQ linked to amount of work included in Contract Sum BQ prepared in accordance with SMM unless otherwise expressly stated SMM is incorporated into the Contract by reference any variance from the SMM must be expressly stated in the Contract Documents Now the ordinary rule that the written word prevails over the printed form is intact - PAM 2006 has removed old sub-clause12.2 from PAM 1998 which stated:
Nothing contained in the Contract Bills shall override, modify or affect in any way whatsoever the application or interpretation of that which is contained
In these Conditions
57
12.0 Contract Bills

The Contact is a Lump Sum Contract (12.2)
Any errors in the Contract Bills shall not vitiate the contract Errors to be corrected by the Architect or consultant But does not say such corrections may amount to a Variation? Not a re-measurement contract so adjustments only for: Variations Expenditure of P.C. and Provisional Sums Measurement of Approx Quantities
58
13.0 Contract Sum

Same principle as Clause 12 Lump Sum Contract No adjustments for arithmetic errors or pricing errors No contractual link between Lump Sum Contract Price and BQ total Errors in rates to be rationalised by Architect or Consultant without change to Contract Sum before Contract signed BUT
If Contract Sum will not change as a result what is the point? Who is the Architect or Consultant to say Rates or Prices are in error? The rates are what they are for a variety of reasons pricing strategy? Unilateral variation of the contract? Is PAM 98 better?
any error whether arithmetic or not in the computation of the Contract Sum shall be deemed to have been accepted by the parties hereto.
59
14.0 Materials and Goods

Materials and goods once delivered and paid for become property of Employer Contractor to have obtained adequate title to materials and goods Title usually is retained by seller until full payment (S25(1) Sale of Goods Act) Contractor warrants title in materials and goods free of encumbrances once value included in interim payment applications Employer can recover any loss (14.4) Contractor responsible for loss or damage to materials & goods on site (14.3)
60
15.0 Practical Completion and Defects Liability

Practical Completion a state of readiness for use or occupation by the owner and free from any known omissions and defects which are not merely trivial The Architect certifies this important event Important because: preparation of final accounts follow release of performance bond commencement of the defects liability period release of one part of the retention passing of risks associated with the completed works
61

PAM 2006: When in the opinion of the Architect the Employer can have full use of their Works for the intended purpose, notwithstanding minor defects (subject to Contractors written undertaking to make good such defects within a reasonable time, the Works are Practically Complete (15.1) PAM 2006 is therefore consistent with the accepted definition PAM 98 did not attempt to define the term but instead used the words the Contractor has performed and completed all the necessary Works specified in the Contract
62

The Contractor now must give written notice to the Architect as soon as he thinks the whole of the Works are Practically Completed This is new. PAM 98 required the Architect to act when he formed the view Within 14 days of Contractors notice, Architect must: Notify Contractor why Works are not Practically Completed; or Issue a Certificate of Practical Completion
63

Defects Liability Period Begins at Practical Completion
Contractor to make good defects listed at PC (15.3) and at end of DLP (15.4) If Contractor fails, Employer has three options: Grant Contractor additional time Employ others and set-off the cost Accept the defects and set-off an appropriate amount New to PAM 2006 (15.5), Architect can issue an AI at any time during the DLP requiring any critical defects to be made good within a reasonable time Contractor has the right to remedy all defects during the DLP (default 12 month period) Contractor to notify Architect at end of DLP when all defects made good
If Architect agrees he issues a Certificate accordingly or a notice giving reasons why he disagrees
64
16.0 Partial Possession By Employer
Employer takes early possession of a part of the Works (the Occupied Part with consent of Contractor before Practical Completion BUT
Where Contract Completion Date has lapsed and a Certificate of Non Completion issued, no such consent of Contractor required (provided no unreasonable disturbance)
65

When Employer takes possession of an Occupied Part:
Architect issues cert of Partial Completion for the Occupied Part within 14 days stating value of part
Practical Completion takes place and DLP commences for the part from date of occupation by Employer Liquidated Damages reduced by the ratio of the value of occupied part to the Contract Sum Half Retention Sum for the value of the Occupied Part is released When defects in the Occupied Part are made good a cert is issued Remaining Retention Sum is released within 14 days of cert of Occupied Part www.charltonmartin.com 66

Architect will issue an instruction to remove any construction plant or equipment, materials or goods in the Occupied Part Q: Is there finality for the Occupied Part? A: No. There is no final settlement for any Occupied Part until the Final Certificate for the whole Works is issued Partial Possession is not Sectional Completion
67
17.0 Assignment And Sub-Contracting

The transfer by a party of his rights under a contract to another
Generally the law does not permit assignment of contractual liabilities

Usually consent of other party required (not unreasonably withheld)
Exceptions:
Employer assigning rights, interests or benefits to a financial institution
Contractor assigning any payment due or to become due to a financial institution
68
17.0 Assignment And Sub-Contracting

Sub-Contracting is not assignment because both rights and obligations as passed to the sub-contractor Contractor cannot wholly or substantially sub-contract the Works unless provided in the Contract (17.3)
Failure to comply with any of the provisions of Clause 17 are grounds for Employer to terminate
69
QUESTIONS AND DISCUSSION
LUNCH BREAK
Session 4 By Michael Charlton
72
18.0 Injury to Person Or Loss And/Or Damage Of Property And Indemnity To Employer Clause 18 Contractor to indemnify the Employer against any loss or claim under common law or statute for:18.1 Personal injury or death of any person 18.2 Loss or damage to any real or personal property incl Employers property and the Works 18.3 Workmens claim, Workmens Compensation Act 1952, and Employees Social Security Act 1969.
73
18.0 Injury to Person Or Loss And/Or Damage Of Property And Indemnity To Employer
discharge liability
Primary Liability: Promisor Principal Debtor
owes debt/liability 3rd party
Diagram 1 - a contract of indemnity relationship
74
owes debt/liability Primary

Liability: Secondary Liability: Guarantor
Principal Debtor
Creditor
gives guarantee
Diagram 2 - a contract of guarantee relationship
75
causes injury
discharges liability for claim Primary Liability: Contractor Employer
owes liability for claim 3rd party
claims damages for injury

Diagram 3- Clause 18.1
76
18.0 Injury to Person Or Loss And/Or Damage Of Property And Indemnity To Employer Conditions for indemnity:18.1 All loss or claim must be caused negligence/omission/default/breach of contract by Contractors
18.2 Even if partly caused by Employers negligence/default, Contractors indemnity shall not be defeated or reduced Sukumaran v Building Construction [1969] (surveyor stood in dangerous location, 50% liable) 18.3 Contractors liability for indemnity arises when Employer incurs loss County v Jenner [1976] Loss in indemnity means financial loss - Anglian v Crawshaw [2001]
77
19.0 Insurance against injury to person and loss and/or damage of property Clause 19 purpose aid Contractor in managing risks in Clause 18 by transferring risks to Insurer But Contractor is still liable to Employer for risks not covered by Insurer e.g. consequential loss- Without prejudice to his liability under Clause 18
Insurance under Clause 19 is a condition precedent to commencement of the Works:a) b) not practical on site Estoppel Boustead v Arab-Malaysian Merchant Bank [1995]
78
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.1 joint names of Employer, Contractor, sub-contractor and interested parties Unclear who are interested parties practical suggestion, identify them, otherwise void for uncertainty
Interested parties do not include consultants who are defined as third parties
79
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.1 joint names of Employer, Contractor, sub-contractors and interested parties Petrofina v Magnaload [1983] a) b) c) Accident at oil refinery caused by sub-sub-contractors negligence Sub-contractors = sub-sub-contractors (inseparately connected, avoid overlapping/cross-claims) sub-contractors could claim benefit under policy that covers main contract and sub-contract works although not parties to policy.
80
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.1 Public Liability insures against:a) personal injuries or death to any person Any person=pedestrian, employee Contractor
of
Employer,
Consultants,
- Employee to employee extensions endorsement to indemnify employee of Insured making a claim against Insured
b) Loss or damage to real or personal property - real property = building adjacent to site - personal property = pedestrian car
81
19.0 Insurance against injury to person and loss and/or damage of property Endorsements to Public Liability Cross liability As though each Insured party is separately insured allow one Insured to sue another Insured for causing loss Deem employees of Employer and Consultants = 3rd parties Waive subrogation rights a) Subrogation = Insurer right to step into shoes of Injured Party to sue defaulting party who caused injury b) Petrofina v Magnaload If defaulting party is the Insured, NO subrogation rights
Auto extension/renewal up to Certificate of Making Good Defects a) No certainty of date, Not practical, May not be accepted by Insurer
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.1 criteria to claim Public Liability: a) b) Loss arise out of Works Irrespective whether Loss caused by negligence/default of Employer, Contractor, sub-contractor, interested parties
Practical suggestion check fine print - Exclude wilful negligence = not negligence - Re City Equitable [1925] wilful if person knew and intended the action
83
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.2 Contractor and sub-contractors to register all local workmen under Employees Social Security Scheme (SOCSO) Local workmen are no longer covered under Workmens Compensation Act 1952 from 1 July 1992.
If sub-contractor fails to pay monthly contribution for local workmen, Contractor or Employer may be liable Advised to check
84
19.0 Insurance against injury to person and loss and/or damage of property Clause 19.3- Workmen Compensation Insurance - Contractor only needs to insure local workmen not covered under SOCSO. Hence, reduce amount of estimated wages to reduce premium Clause 19.4 all foreign workers (manual) covered under Workmens Compensation (Foreign Workers Scheme) - suggestion: Contractor to ask from sub-contractors policy on Workmens Compensation (Foreign Workers Scheme) for all foreign workers (manual) Insurance policies valid until Completion Date (cover Works) + Maintenance Cover until 3 months after Defects Liability Period (cover defect remedial works) If delay Works or defect remedial works - Extend policy 1 month before expiry
20.0 Insurance of New Buildings/Works or Existing Building by the Contractor or the Employer 3 options to insure Works under CAR policy 20A- Insure Works or construction of new buildings by the Contractor 20B and 20C- Insure Works or construction of new or existing buildings by the Employer - Contractor still liable for risk of damage to Works under Clause 18 - insurance preferred by Employer if overlapping work packages, lower premium but higher deductibles for Contractor to bear - may not be economical for Contractor to insure deductibles
86
20.0 Insurance of New Buildings/Works or Existing Building by the Contractor or the Employer
Clauses 18.2 & 18.4 Contractor liable to indemnify Employer for damage to Works even if negligence/default partly responsibility of Employer/Consultants - E.g. faulty Consultants design or negligence in supervision of Works
Advice- check CAR policy does it exclude faulty design or workmanship? - get endorsement to cover faulty design or workmanship - check plant hirers or sub-contractors Plant policy, if necessary insure under CAR policy
87
20.0 Insurance of New Buildings/Works or Existing Building by the Contractor or the Employer
CAR policy for Works valid until Completion Date + Maintenance Cover until 3 months after DLP
If delay to Works, extend CAR policy 1 month before the date of expiry
a) b)
Good practice Advice- compile extended insurance receipt for Loss and Expense claim if delay caused by Employer
88
20.0 Insurance of New Buildings/Works or Existing Building by the Contractor or the Employer Clause 20.A.4 in event of claim Contractors obligation to restore, replace and repair damaged Works No need to wait for insurance claim Repair is not a VO Indemnity Clause 18.2 & Clause 20.A.4 - Gold v Patman [1958] Contractors risk = damage to Works even by natural catastrophe Clause 20.A.4 - unclear what is meant by an instalment payment to Contractor by Employer on insurance claim - Advice- Contractor to clarify at tender
89
21.0 Date of Commencement, Postponement and Completion Date
Clause 21.1 Possession of Site given on Date of Commencement Site means entire Site not so much of the as necessary to carry out the Works Avoid two different dates in Letter Award Site Possession provides contractual licence to enter whole site, cannot be revoked during Contract Period Hounslow v Twickenham [1970] Merton v Stanley Hugh Leach (1985) Employers implied duty not to prevent or hinder Contractors works
90
Clause 21.2 several Dates of Commencement for several Sections of the Works , potential for confusion unless Site is redefined. Each Section = as if separate contract - but PAM 2006 silent on retention fund, implied proportion retention fund according to value of Section Practical suggestion insert proportioned retention fund in Appendix Limit of Retention Fund= 5% of Contract Sum Avoid inconsistent terms Contract Sum/Contract Price/Revised Contract Sum
91
Clause 21.4 instruction to suspend Works (period < 3 months) - claim EOT and Loss and Expense (additional premium insure period of suspension) - Cannot instruct to suspend > 3 months avoid abuse by Employer with financial problem - if suspension > 3 months, Contractor option to terminate (Clause 26)
92
22.0 Damages for Non Completion Clause 22.1 : Upon the issuance of the Certificate of Non-Completion (CNC), the Contractor shall pay Liquidated Damages Lion Engineering v Pauchuan Development [1997] - CNC = condition precedent to Liquidated Damages Cantrell v Wright [2003] - must issue CNC before Final Certificate Engineering Construction v Attorney General [1994] - must issue CNC before Contract terminated
93
22.0 Damages for Non - Completion Clause 3.1 : Order of precedence- Letter of Award prevail over Conditions of contract Practical suggestion if tender negotiation resulted in discounted Liquidated Damages rate, Contractor to ensure new rate is reflected in Letter Award see Session 2 page 8 - Cannot rely on tender negotiation minutes of meeting as it falls under the lowest order of precedence other documents incorporated in the Contract Documents
94
22.0 Damages for Non Completion Clause 22.2 No need for Employer to prove actual loss, circumvent Selva Kumar v Thiagarajah [1995] But unless the contrary is proven by the Contractor - affirms Sakinas v Siew Yik Hau [2002] if Contractor proves LD not due if it could be assessed by settled methods, Employer needs to prove actual loss Clause 22.3 If EOT given after 1st CNC, Architect must issue 2nd CNC if cannot meet extended Completion Date before deduct LD - affirms Bell v CBF Residential (1989)
95
23.0 Extension of Time (EOT) Clause 23.1 Notice of intention to claim EOT + estimate + records = condition precedent to EOT Clause 23.1 Within 28 days of Delay Ending, Contractor to submit final claim for EOT + full supporting records (if Contractor needs more than 28 days, ask Architect for more time, failure to provide details means deemed relevant event will not delay completion, i.e. waived right to EOT) Putrajaya v Digital Green [2008] - deem = assuming something to be a fact which may/may not be the case
96
23.0 Extension of Time (EOT) Architects duties Architect to assess EOT after delaying factor ceasesaffirms Lian Soon Construction v Guan Qian Realty [2001] (good practice to grant interim EOT for Contractor to target new Completion Date, avoid constructive acceleration) Architect to issue Certificate of EOT within 6 weeks of receipt of particulars but what if Architect exceed 6 weeks? Employers breach? Hiap Hong v Hong Huat Development [2001] - Employer not undertake Architect will exercise certification powers
What are Contractors recourse if Architect refuses to give EOT?

23.0 Extension of Time (EOT) Architects duties Lian Soon Construction v Guan Qian Realty [2001] - a EOT decision = foundation for delay certificate (=CNC) before deduct Liquidated Damages (LD) - Architect should avoid granting a block EOT, should consider separate delay events effect on Completion Date Arab Malaysian v ASM Development [1998] - if Architect wrong in refusing EOT, then no basis for Employers deduction of LD
Advice: Architect to give correct EOT to preserve Employers right to LD
98
23.0 Extension of Time (EOT) Architects duties Clause 23.5(b) -Architect express power to grant EOT despite Contractor not made claim note Peninsula v Abigroup Contractors [2002], Superintendent had no right to grant EOT without notice but court held contractor could not rely on prevention by employer in overcoming notice requirement.
99
23.0 Extension of Time (EOT) Contractors duties Clause 23.6 Contractor to use best endeavours to prevent/ reduce delay Re-sequence works=mitigate delay, claim mitigation cost Rapsican v Global Container [2002] If Employers delay, Contractor should get EOT - no need to increase resources/accelerate unless instructed by Architect and paid by Employer Architect to take care in instructing Contractor! If Contractors delay, Architect has right to instruct Contractor to increase resources to accelerate at own cost
100
23.0 Extension of Time (EOT) Relevant Events (grounds for EOT) Force majeure government ban on heavy traffic Exceptionally inclement weather compare average past 5-10 years rainfall with present rainfall Delay in re-nomination of NSC (new in PAM 2006) Employers act of prevention (wide) Delay caused by change to law (new in PAM 2006) Delay in replacing Consultants (new in PAM 2006) Delay in executing higher Provisional Quantity (new in PAM 2006) Delay in suspending Works due to Employers late payment (new in PAM 2006) Delay in suspending Works due to Consultants withdrawal from supervision of Works (new in PAM 2006) Delay in suspending works by Local Authoritys order (new in PAM 2006)
101
Session 5 By Rodney Martin
102
24.0 Loss And/Or Expense Caused By Matters Affecting The Regular Progress Of The Works
Contractor has right to claim loss & expense due to delay or disruption events subject to condition precedents:
Notice to Architect within 28 days of start of event or issue of AI / CAI with initial estimate and supporting calculations Submit to Architect or QS complete particulars of his claim with substantiating records and calculations within 28 days after the event has ended
Failure to comply means Contractor looses right to claim
103
24.0 Loss And/Or Expense Caused By Matters Affecting The Progress Of The Works

Regular
Contractor to keep contemporary records of loss & expense including sub-cons (24.2) Matters allowing loss & expense to be claimed:
Late information Delayed site possession Compliance with Postponement or Suspension AI Delay by contractors engaged by Employer Delay by Employer in supplying goods and materials Opening up the works (unless defects found) Any act of prevention or breach of Contract by Employer Delay resulting from antiquities AI Appointment of a replacement Person under Articles 3,4,5 and 6 Compliance with a Neighbour dispute AI Inaccurate Provisional Quantities Employers delay in giving site access Suspension by the Contractor due to late payment or compliance with bye-laws Suspension by the Contractor on instruction of Appropriate Authority or SP due to negligence of E, A or C
104
24.0 Loss And/Or Expense Caused By Matters Affecting The Regular Progress Of The Works
Matters not allowing loss & expense to be claimed (outside Employers control):
Force Majeure Exceptionally Inclement Weather Insurance clause contingencies Civil Commotion Delay by NSC Delay in re-nomination of NSC War Damage Change in Law and Regulations Delay by Appropriate Authority & Service Providers
Architect or QS to ascertain amount of L&E from time to time and add to Contract Sum by way of interim certificate
105
25.0 Determination of Contractors Employment By Employer

Employer may determine employment of Contractor when in default as follows:
Fails to commence the Works without reasonable cause

Wholly or substantially suspends the Works without reasonable cause Fails to proceed regularly and diligently with the works Persistent refusal or neglect to comply with an AI Assigns rights or wholly / substantially sub-contracts without consent of employer Abandons the Works
106

Procedure is very important (25.2)
Notice of default by registered post or hand from Architect or Employer Notice must not be:
unreasonable (to take advantage of accidental error or omission), or vexatious (without good grounds to cause annoyance or embarrassment or irritation
If default continues for 14 days then Within 10 days notice of determination from Employer
If not issued then go back to beginning (fresh default notice)
107
25.0 Determination of Contractors Employment By Employer Contractors employment is then determined

Other provisions continue such as:
Valuation of the Works (25.5) Reference of a dispute to Arbitration (34)
Automatic determination on Contractors insolvency, arrangement with creditors or winding up (25.3) Is (25.3) an infringement of bankruptcy laws? right of trustee or liquidator to elect to carry on or disclaim the contract So perhaps look for an alternative right to determine such as suspension or abandonment
Effective against receivers not covered by bankruptcy laws
108

Post determination procedure (25.4)
Contractor vacates the site and Employer may us his plant, equipment, goods and materials but has no right to sell them Right to use plant may be at odds with owners of hired plant but 25.4(a) assignment of hire agreements to Employer within 21 days of determination
Right to have agreements for supply of materials/goods or any sub-contract assigned to Employer within 21 days - 25.4(b)
Architect may instruct the removal of any plant, equipment, materials or goods belonging to Contractor 25.4(c)
109

Post determination procedure (25.4)
No further payment to Contractor until Works completed Contractor liable to pay Employer all additional costs incurred in completing the remaining works including loss & expense 25.4(d)
Extra over cost of replacement contractor Cost of removing Contractors plant & equipment Additional consultants fees Liquidated Damages up to determination if Completion Date already lapsed
110

Site Inspection between Architect and Contractor within 28 days (25.5) Architect or QS to produce a final account for the parties to consider within 6 months from the completion of the remaining Works (25.6), including:
Total value of Works completed up to date of termination (certified and not certified) Total amount of the cost of engaging a replacement contractor Liquidated Damages to be recovered Total amount of any set-off against the Contractor Total amount of any Loss & Expense suffered by the Employer
The Parties must dispute within 3 months or else account is considered agreed If the amount of the final account is greater than the amount which would have been payable to the contractor (a notional FA) the difference is a debt due from the Contractor to the Employer

PAM 2006 25.6(a) wording is an anomaly:
If the said amount is less than the said total amount, the difference shall be a debt payable to the Contractor by the Employer So if the Employers total costs after replacing the Contractor and finishing the Works are less than would have been paid to the defaulting Contractor, then the Employer should pay money back to the defaulting Contractor? Surely the correct position is that the Employer has suffered no loss and has no claim against the defaulting original Contractor
112

If final account disputed then notice must be given to other party within 3 months with reasons and records - 25.6(b) Architect or QS must decide within 3 months of final account dispute notice whether to amend the final account If either party disagrees then they have 3 months to refer the matter to arbitration under Clause 34 otherwise the FA is conclusive and agreed by the parties Departure from the Limitations Act which gives the parties 6 years to refer But 25.8 states that the Employers rights at common law and statute are not prejudiced by the provisions of Clause25.0 So the Employers rights are preserved but the Contractor has to refer any dispute within 3 months is this practical?
113

Mandatory obligation on Contractor to give back Site within 14 days -25.7
If Contractor disputes Employers Notice of determination he must still go Contractor has no right to continue with the Works where he disputes Only remedy is damages for breach of contract (unlawful termination)
See Kong Wah Housing v Desplan Construction (1991)
114
26.0 Clause Determination of Own Employment By Contractor

Contractor may determine his own Employment due to the following Employer defaults:
Failure to pay any amount due after LD and set-off 26.1(a) Interference by Employer 26.1(b) (any not just improper or fraudulent as in PAM98) Failure to nominate a new Architect or Consultant 26.1(c) Suspension of whole Works for continuous 3 month period due to:
AIs (on discrepancies, postponed site possession and postponed Works) Late instructions or information by Architect Delay or failure by Employer appointed Contractors The opening up of the works for testing
115

Similar Notice requirements and procedure as Clause 25 Employer insolvency is grounds for automatic determination
Contractor to leave site within 14 days

Payment for work done plus loss & expense arising Joint valuation within 28 days of determination by Contractor Architect and QS Contractor to prepare the final account (unique to PAM 2006) within 6 months of determination Employer has 3 months to dispute the FA otherwise deemed agreed
Same limitation period issue for Employer here having to refer any dispute on the FA to arbitration within 3 months
116

Payment due after FA settled less LDs and set-off LDs no longer payable if the Contractor validly determines his employment and at that time no LDs have accrued because completion date yet to arrive
General or un-liquidated damages still recoverable subject to proof of loss
117
27.0 Nominated Sub-Contractors

NSC is responsible for design in NSC Works and not the Contractor Objection by Contractor to nomination within 14 days of AI Terms of the Sub-Contract to include:
Works must be to reasonable satisfaction of the Architect and Contractor Contractors obligations as to performance passed down to NSC Indemnity from NSC to Contractor as given by Contractor to Employer Indemnity against negligence, omission or fault EOT from Contractor subject to Architects recommendation (but not mandatory) Architect to issue CPC not Contractor Contractors right to claim loss/expense due to delay by NSC NSC right to payment within 7 days after Period of Honouring Certificates even where Employer has not paid Contractor Right of Architect to access NSC premises for inspections
118

Right to Object to Nomination
Contractor has right to object to nomination if documentary evidence of poor financial and technical capacity of NSC which would jeopardise the Work progress - 27.3 Architect can cancel instruction, re-nominate or override Contractors objection by issuing an instruction to appoint the NSC 27.4 Unfair See 27.9 Contractor still responsible for NSC performance
Payment to NSC
Payment proof to be provided by Contractor to Architect prior to issuing interim or penultimate certificates 27.6 Direct payment by Employer if Contractor cannot justify non-payment
But Employer not obliged to pay NSC and NSCs only recourse for non-payment is to sue Contractor KM Quarry Sdn Bhd v Ho Hup Construction (2006)
See also 27.10 - no privity of contract between Employer and NSC www.charltonmartin.com 119

Final Payment in Advance to NSC
Architect can certify final payment to NSC before final payment is due to the Contractor 27.7
NSC Termination
Architects consent needed as a CP before Contractor can terminate the NSCs employment 27.8 Contractor must issue a report to the Architect and NSC stating the default and the Architect can ask the NSC to respond to the allegations Architect obliged to re-nominate 27.11
120

Final Account Procedure upon termination 27.11
Similar in principal to Main Contractor termination Employer to pay any additional cost of re-nomination if cannot be recovered from defaulting terminated NSC
EOT for delay due to terminated NSC but no L & E 27.11

Time taken to re-nominate Any extra time needed by re-nominated NSC Contractor not entitled to loss & expense
121

Termination by NSC with cause 27.12
Contractor liable to pay any additional cost of re-nomination Contractor liable to pay Employer any additional costs incurred No EOT for Contractor unless proof of wrongful termination by NSC
Contractor has right to tender for PC Sum and Provisional Sum work 27.14
122
28.0 Nominated Suppliers

NS Contract of Sale to include 28.2:
Goods of quality and standard specified Make good defects Comply with delivery programme Ownership to pass upon delivery to Contractor (whether or not paid for) Payment within 7 days of Period of Honouring Certs
Right to reasonable objection 28.3 (similar to 27.3) Architect may:

issue further instructions to remove objection cancel the instruction and omit the materials or goods re-nominate
123
28.0 Nominated Suppliers

NS payment provisions similar to NSC 28.5 & 28.6 Contractor responsible for any of NSs : negligence omission Default
- 28.7
No privity of contract between Employer and NS 28.8
124
29.0 Works By Craftsmen, Tradesmen Or Other Contractors Employed or Engaged By the Employer
Permission for Employers direct contractors to enter the site and carry out direct related Works Employer responsible for any delay caused
EOT and L&E claimable in event of critical delay
125
TEA / COFFEE BREAK
Session 6 By Michael Charlton
127
30.0 Certificates and Payment Clause 30.1 : onus on Contractor to submit payment application each month, otherwise NO interim certificate Tuck Sin Engineering Sdn Bhd v Yee Heng [2007] - Architects payment certificate = condition precedent to payment Clause 30.3 : Architect to revise previous payment certificate to correct error
Anwar v Teo Hee Lai Building Construction [2007] - revised certificate must be issued when occasion arises for correction
128
30.0 Certificates and Payment Clause 30.6(a) : Within 14 days of request by Contractor, Employer duty to set aside retention fund in separate trust account Enable Contractor to access retention fund if Employer insolvent, otherwise lose retention as in MacJordan v Brookmount (1992) Clause 30.6(b) Employer notify Contractor reason for deducting against retention fund avoid abuse Clause 30.6(c) & (d) Architect to release 1st and 2nd moiety of retention within 14 days from CPC and CMGD respectively -certainty
129
30.0 Certificates and Payment Clause 30.7 : If Employer fails to pay certified amount by 21 days of Architects certificate, Contractor to give 1st notice of default If Employer continues default for another 14 days, Contractor to give notice of suspension until full payment Contractor gets EOT, loss and expense for suspension (eg insurance premium)
130
30.0 Certificates and Payment Clause 30.10(a) : If Employer / Contractor fails to give notice disputing QSs final account within 3 months of receipt, final account = conclusive QS to study Contractors reasons of dispute, and decide if to amend final account If Employer / Contractor still disputes QSs decision/ amended final account, he must refer the dispute to arbitration within another 3 months, otherwise final account = conclusive Practical suggestion give notice of dispute/arbitration to buy more time whilst negotiating final account
131
30.0 Certificates and Payment Clause 30.14 : Architect to issue Final Certificate within:- 21 days after another 21 days of the Penultimate Certificate , or - 28 days after the issue of CMGD Clause 30.15 : Onus on Contractor to ensure Employer makes payment of all previous certificates - as Final Certificate states the net sums certified after less all previous certificates
132
30.0 Certificates and Payment Clause 30.16 : Final Certificate = conclusive on final value of Works except LD, set-off, interest payment But not conclusive as to quality of materials and workmanship complying with Contract Affirms SA Shee Sarawak v Sejadu [2000] final certificate= conclusive on balance sums due, NOT sufficiency of materials and workmanship
133
30.0 Certificates and Payment Clause 30.17 : entitles Contractor to simple interest for Employers late payment of certified sum at Maybank BLR + 1% Payment certificate shows certified sum, must not show Liquidated Damages or set-off Employer can deduct Liquidated Damages and set-off against certified sum
Advice - Take care to check and avoid Employers wrongful deduction of Liquidated Damages and set-off
134
31.0 Outbreak of Hostilities Clause 31.1 : in the event of war, allows Employer or Contractor to terminate by notice Advice - Once terminated, Contractor to: - protect Works - take photographs of completed Works to prove value of Works completed up to termination - carry out joint site valuation only if permits
135
32.0 War Damage Clause 32.1(b) : Architect may give AI instructing Contractor to remove damaged Works and protect the Works, deemed to be a variation
136
33.0 Antiquities Clause 33.1 : When discover antiquities, requires Contractor to suspend Works and request further instruction Contractor gets EOT for suspension
137
34.0 Adjudication and Arbitration Clause 34.1 : Speedy resolution of dispute on Employers set-off via an agreed adjudicator avoids disruption to Works But parties can agree to refer other dispute to adjudicator Clause 34.4 temporary binding effect of adjudicators decision until Practical Completion
Parties have 6 weeks to give notice refer dispute on adjudicators decision to arbitration, otherwise decision is final and binding
6 weeks too short- compel parties to negotiate and settle
138
34.0 Adjudication and Arbitration Clause 34.6 : any party may start arbitration by Notice to appoint arbitrator Arbitrators award = final and binding except for circumstances (e.g. misconduct) Arbitrators powers: - rectify the Contract - certification, open up and review (e.g. under-certification) - revise Architects certificates or decision
- award pre-award and post-award interest
139
34.0 Adjudication and Arbitration Clause 34.9 : Best endeavours by Contractor, Employer and Nominated SubContractor to appoint same arbitrator to hear same/connected dispute involving subcontractor Clause 34.9 =Similar to tripartite arbitration agreement affirms Lafarge v Shepherd Hill [2001] Clause 34.10 cannot start arbitration until practical completion or termination unless urgent: - Questioning Architects authority to issue instruction - war outbreak - improper withholding certificate - improper withholding of payment to Contractor
140
35.0 Mediation Clause 35.1 : flexibility for parties to mediate = commercial negotiation (separate from adjudication and arbitration)
Mediation = NOT condition precedent to adjudication and arbitration
141
36.0 Notice Clause 36.3 : Importance of proof of delivery of notice by:- notice by hand : acknowledgement of receipt - notice by registered post : receipt of posting from Post Office (useful when party refuse to acknowledge receipt)
142
37.0 Performance Bond Clause 37.1 : Submit Performance Bond 5% Contract Sum brefore commence Works Esso Petroleum Malaysia v Kago Petroleum [1995] - unconditional bond= call on bond triggers banks liability to pay - no need prove breach by Contractor Bond valid until 3 months after practical completion Employer must return Bond within 28 days of Contractors termination in practice if Employer disputes Contractors right to terminate, unlikely return Bond
143
38.0 Governing Law Clause 38.1 : Malaysian law applies to PAM 2006 Contract (foreign case-law = persuasive authorities, though not binding)
144
QUESTIONS AND DISCUSSION
Contract Administration In A Day

THURSDAY, 19 NOVEMBER 2009
CLOSE

20090716-PAM 2006-A User's Manual

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

20090716-PAM 2006-A User's Manual

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

20090716-PAM 2006-A User's Manual

Uploaded by

Copyright:

Available Formats

CHARLTON MARTIN ONE DAY SEMINAR

PAM 2006 A USERS MANUAL THURSDAY 16 JULY 2009

Mission and Vision

About Charlton Martin Group

About Charlton Martin Group

Preparation of Contract Documents

On behalf of Employers / Owners

On behalf of Contractors / Sub-Contractors

Expert Witness Services

Seminars & Training

Professional Search Services

Session 1 by Rodney Martin

INTRODUCTION TO CONSTRUCTION CONTRACTS

Note building contract now construction contract

Governed by the Contracts Act 1950

All elements of a simple contract must be present:

Void if there has been a mistake about a fundamental matter

Only the Contract Documents contain the terms of the contract

Common Construction Contract Documents:

Construction contract arrangements are now varied and complex

Available Standard Forms

Why do we have Standard Forms?

Provides high level of certainty

HISTORY OF THE PAM FORM

PAM/ISM 1969 Form

PAM 1998 Form

PAM 2006 Form

BACKGROUND AND INTENDED USE

Conditions Did you know?

Conditions in the legal sense has more precise meaning:

But thats not all

Courts use implied terms to represent:

Examples of Implied Terms in Construction Contracts

Standard Forms To Amend or Not to Amend?

Therefore good reasons not to amend

STRUCTURE OF THE PAM CONTRACT Articles of Agreement

Attestation / Signatories of the Parties

Lump Sum Contract

NEW FEATURES AND KEY CHANGES IN PAM 2006

Right to Interest for Late Payment

Retention Monies in Trust fund on Request

NEW FEATURES AND KEY CHANGES IN PAM 2006

COMPARISON WITH OTHER MALAYSIAN FORMS

Session 2 by Michael Charlton

Clause 2.1 Forthwith comply with all A.I.

Contract Documents, Programme and As-Built Drawings

Clause 3.1 certainty in order of precedence if discrepancy

the Contract Drawings;

Contract Documents, Programme and As-Built Drawings

Statutory Obligations, Notices, Fees and Charges

Levels and Setting Out of the Works

Unclear what is appropriate deduction

Materials, Goods and Workmanship to Conform to Description, Testing and Inspection

Warranty by Manufacturer does not release Contractor from liability

Royalties and Intellectual Property Rights

Access to the Works

CHARLTON MARTIN ONE DAY SEMINAR

TEA / COFFEE BREAK

Session 3 by Rodney Martin