11/19/2020

BACKGROUND
Current IEM Conditions of Contract for
WEBINAR ON • Civil Engineering Works:
IEM FORM OF CONTRACT FOR IEM.CE 2011 - 3rd Edition January 2017
CIVIL ENGINEERING WORKS • M&E Engineering Works :
IEM.ME 2012 – 3rd Edition January 2017:
• Nominated Sub-Contract Works:
An Overview IEM.NSC 2017 – December 2017
By Ir. Wong See Foong FIEM, FIFireE, P.E.P.C.

OBJECTIVE DRAFTING GUIDELINES

• A form of contract that is DISTINCTIVELY • Contractually equitable with balanced allocation

IEM. of contractual risks
• Simple, practical and straightforward
• Language used to be simple and clear
• Intended for Engineering Works where • Role and duties of Engineer clearly defined
the Engineer is the contract • Price certainty enhanced with clarity
administrater • Project management techniques incorporated
• High degree of certainty
• Procedural steps enhanced

FORM AND LAYOUT LANGUAGE

• Minimize legalese
The form is divided into: • Enhance certainty by maintaining common
phrases and words that have been
• Articles of Agreement judicially defined or interpreted, e.g.
• Conditions of Contract and Appendices “regularly and diligently”
• Option Modules • “shall” verses “must”
• Proforma of Performance Bond • Use of plain English
• Ultimately, to remain as a LEGAL
DOCUMENT

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DRAFTING PHILOSOPHY/POLICY DEFINITIONS AND INTERPRETATTIONS

• Engineer is responsible for design (except • Important definitions listed in Clause 1 for
certain designs undertaken by contractor). defined words and terms used in more
• Engineer to act as impartial and independent than one clause.
certifier.
• Contractor to undertake and be responsible
for construction. • In some cases, certain words and terms
which are only used in a particular clause
• Employer to make payment for work done.
are defined in the clause itself.
• Allows a mixture of re-measured items and
lump sum items.

ENGINEER AND ENGINEER’S

PARTIES TO CONTRACT
REPRESENTATIVES
Engineer
• Employer • Duties that must be carried out
• Contractor (Clause 2.1(1))
• Authorities that may be exercised but not
• “Joint and Several Liability” clause for for amending the Contract (Clause 2.2(1))
partnerships, joint ventures and “The Engineer” to be named individual
consortiums (Clause 1.5) (Clause 2.3):
₋ evidential reason
₋ purpose of certification

ENGINEER AND ENGINEER’S ENGINEER AND ENGINEER’S

REPRESENTATIVES REPRESENTATIVES
Engineer’s instruction (Clause 3.1)
Concept of delegation in terms of duty verses
authority (Clause 2.5);
• Assistants to the Engineer / Engineer’s
• Engineer delegates his AUTHORITIES (but Representatives to “Watch and supervise” :
not duty) to Engineers Representative (not (Clause 2.6)
so in PAM Contracts); • No authority to issue instructions that vary
• Limitations / Constraints in delegation the contract (Clause 2.6)
(Clause 2.5 (4)) particularly for certification • To be impartial, reasonable and act in a
timely manner (Clause 2.7)

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ENGINEER’S INSTRUCTIONS CONTRACT DOCUMENTS

• Engineer’s instruction must be in writing • Documents forming the contract listed in

(Clause 3.1) Clause 4.1 (1). Also Article 3 of Articles of
Agreement
• Confirmation of oral instruction (Clause • Documents to be mutually explanatory
3.2) (Clause 4.2)
• Malaysian laws shall apply and language is
• Failure to comply with Engineer’s English (Clause4.6(2))
Instructions (Clause 3.3)

DRAWINGS DRAWINGS
• Contract Drawings are part of Contract • Delay in issuing further drawings required for
Documents carrying out the works will give rise to:
• Engineer must issue further drawings by way • Extension of Time under Clause 44
of instructions (Clause 5.3(4)) • Additional costs under Clause 53
• “Further drawings” are not to be issued by
way of letters, site memos of even just
sketches without any covering letters /memos • EOT and Cost claims by the Contractor must
• NB. Further drawings are not considered as be served within reasonable time subject to
contract documents Clause 5.3(3)

CONTRACTOR’S DESIGNS CONTRACTOR’S DESIGNS

• Can be for both Permanent Works (e.g. works • Subject to Engineer’s approval
which are patented ) or Temporary Works (Clause
6.1 and 6.3)
• Delay in Engineer’s approval (Clause 6.4(1))
• Documents described in Clause 6.1(5) & (6) will lead to:
• Drawings or sketches – Extension of Time under Clause 44
• Specifications
– Additional costs which Clause 53
• Calculations
• O&M manuals
• Endorsed by Professional Engineer (Clause 6.1(7))

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EMPLOYER’S OBLIGATIONS CONTRACTOR’S OBLIGATIONS

Employer’s Obligation (Clause 7.1) Contractor’s Obligations (Clause 8.1)
• To give access and possession of site • To Design (if and to the extent required under
• To ensure land use is correctly categorized the Contract)
• To ensure all planning approvals obtained • Construct, complete and remedy any defects
• Must not obstruct or interfere in the • Provide management, supervision, labour,
Contractor’s performance plant , equipment, goods and materials
• Must appoint the Engineer • Must ensure adequacy and safety of
operations

PERFORMANCE SECURITY PERFORMANCE SECURITY

• In the form of a guarantee or bond (Clause • “On Demand” bond or “ Conditional Bond’?
10.1 (2)); • Conditional bond : commercial viability is
• Usual provisions on validity and extension of mostly lost
validity are included • On Demand bond : subject to abuse
• No “Payment Bond” • Compromise : in between
• “On Demand Bond” or “Conditional Bond” Only condition imposed is the issuance of the
• Arbitrator to retain jurisdiction on bond Certificate of Default issued by Engineer
(Clause 10.1(6))

PERFORMANCE SECURITY PERFORMANCE SECURITY

• Proforma of Performance Bond reflects this Requirements of the Bond (Clause 10.2) :
requirement • Must substantially be in the form provided
• If bond is called, money belongs to Contractor • Issued by a bank or financial institution
and remainder must be to the account of the approved by the Employer
Contractor • Valid until Date of Completion (or any
– Included in Certificate of Termination Costs; extended date)
Clause 61.4(2)(e) ; Clause 62.4(2)(e)

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PERFORMANCE SECURITY PERFORMANCE SECURITY

Extension of Performance Bond (Clause 10.3) Proceeds from Performance Bond (Clause 10.5)
• Extension of validity of the submitted bond must • Proceeds of the performance bond must be
be at lease 30 days before expiry
used to remedy the default of the Contractor
• Expenses in extension is claimable as Costs
specified in the Certificate of Default
Call on Performance Bond (Clause 10.4)
• Engineer must have issued Certificate of Default. • Any balance to be returned to the Contractor
• Claim must be accompanied by Certificate of
Default

SITE CONTRACTOR’S SUBMISSIONS

Important to appreciate the “Site” Contractor’s Submissions (Clause 14) to include:
• Geographical limit of Engineer’s • Master Program (Clause 14.2)
authorities • format and details as required by the Engineer.
• Limit of Insurance coverage • Engineer does not approve but can require
• Contractor’s licence to occupy amendment for “errors, inconsistencies and
incoherence”.
Clause 11.3 • Engineer can instruct for revision to Master
• Contractor to clear site, clean, etc. Program.
• Engineer to be informed of dump site, etc. • Revision does not constitute notice for EOT or EOT
itself.

CONTRACTOR’S SUBMISSIONS CONTRACTOR’S SUBMISSIONS

• General Method Statement (Clause 14.3) • S Curves reflecting Master Program (Clause
Based on 4M’s: 14.5)
• Manpower • Physical progress
• Machinery • Financial progress
• Materials • Means of monitoring
• Methodology • S-curve must reflect Master Program

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CONTRACTOR’S SUBMISSIONS SITE ADMINISTRATION

• Organization chart (Clause 14.4) • Contractor must provide supervision by skilled
• Plant utilization program (Clause 14.6) and experienced personnel (Clause 15.1)
• Labour forecast (Clause 14.7) • Site Manager is Contractor’s representative on
• Monthly Report (Clause 14.8) site to receive instructions on behalf of the
Contractor (Clause 15.2)
– Requirements in Clause 14.8 (2)
• Contractor’s Employees to be suitably skilled
and experienced (Clause 15.3)
• Days and hours of working (Clause 15.4)

SETTING OUT SITE SAFETY AND SECURITY

• Responsibility of Contractor for setting out Site Security (Clause 19.1)
(Clause 17.1(1)).
• Contractor must inform Engineer if he does not • Contractor responsible for safety of personnel
have all the information for setting out (Clause until end of defects liability period.
17.1 (3) & (4)); if Engineer delays in giving
information, EoT and Costs are claimable (Clause • Contractor must appoint Safety Officer.
17.1(5)) • Comply with Factories & Machinery Act and
• Error in setting out Occupational Safety and Health Act.
– If it is Contractor’s error, no claims permitted;
– If it is Engineer’s error, EoT and Costs claimable • All costs for compliance deemed to be in the
• Approval of setting out by Engineer required. Contract Sum.

SITE SAFETY AND SECURITY CARE OF THE WORKS

Site Security (Clause 19.2) • Contractor is responsible up to issuance
• Contractor must provide all security measures of Certificate of Completion (not till
“for the protection of the Works, persons entitled Certificate of Making Good).
to be on Site and convenience of public. • Without prejudice to insurance
• Engineer may instruct for security measures requirements.
which are “necessary or required” (Clause
• Contractor cannot be held responsible if
19.2(2)).
damages are caused by Employer’s Risks.
• Employer is responsible for safety and security of
those works not forming part of the Works • Employer’s Risk defined under Clause
(Clause 19.3) 20.4

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INSURANCE OF WORKS INSURANCE OF WORKS

Two options: For All Risks Insurance coverage by Employer

• To be provided by the Contractor (Clause 21.1(1)) :
(Clause 21A) • Contractor liable for deductible (Clause 21.5)
• Copy of insurance policy for Contractor (Clause
• To be provided by the Employer
21.3)
(Clause 21B)
• Contractor at liberty to take out separate
In both cases, the obligation is to insurance
provide coverage until Certificate of • Contractor to comply with policy conditions
Completion (Clause 21.6)

INDEMNITY INDEMNITY
Indemnity (Clause 22) • Irrespective of who is responsible, Contractor
• Contractor to indemnity Employer against losses, must make good the damages/losses first
expenses, costs, damages, liability, claims for (Clause 22.4)
death/injury t persons & loss/damage to property
(Clause 22.1)
• Failure by the Contractor to rectify damages/
• Indemnity not defeated by negligence, omission losses, the Engineer can engage third party
etc. (Clause 22.3(2))
and charge the amount involved to the
• Contribution to damages is reduced if Employer Contractor (Clause 22.5).
or his agent is responsible (Clause 22.3(1).

INSURANCE FOR WORKMEN COMPLIANCE WITH LAWS

Workmen Insurances: • Contractor to comply with all applicable
• SOCSO for Malaysians (Clause 23.1) laws (Clause 24.1)
• Workmen Compensation for non-Malaysian • Payment of CIDB levy by Contractor
Workmen (Clause 23.2)
(Clause 24.1(3))
• Insurance for Malaysians not subject to
SOCSO (Clause 23.3) • To comply with requirements of service
providers such as TNB, Telekom, etc. All
Default in compliance Employer may pay on his fees paid are claimable as Costs (Clause
behalf and deduct (Clause 23.4) 24.1(6))

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COMPLIANCE WITH LAWS PATENTS RIGHTS AND ROYALTIES

• For change of laws after submission of • Contractor to indemnify Employer against
Tender, Contractor is entitled to claim for all claims, costs, damages, etc. for
Costs (Clause 24.3). infringement of any intellectual property
rights (Clause 25.1).
• This includes changes to service
provider’s requirements. • All royalties for sand aggregate, etc. must
be paid by the Contractor (Clause 25.2).

ENVIRONMENTAL MANAGEMENT &

ANTIQUITIES AND FOSSILS
QUALITY ASSURANCE
• All antiquities found on Site (as between
the Employer and Contractor) belong to • Contractor is to comply with the
the Employer (Clause 26.1). Environmental Quality Act 1974(Clause
26.1).
• Contractor is to protect antiquities/fossils
discovered, and any EoT and Costs are • Contractor must submit Quality Plan, if
claimable (Clause 26.2). required.

MATERIALS AND EQUIPMENT MATERIALS AND EQUIPMENT

SUPPLIED BY EMPLOYER SUPPLIED BY EMPLOYER
• An area which gives rise to many Two possible options:
controversies /disputes • Supply by Employer is a requirement of
• Common complaints /disputes the Contract (Clause 33.1)
– Premature deduction • Separate supply agreement between
– Disputed amount Employer and Contractor (Clause 33.2)
• A new provision to cater for this issue
• Ownership of materials, plant when
brought to Site is with the Employer.

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MATERIALS AND EQUIPMENT MATERIALS AND EQUIPMENT

SUPPLIED BY EMPLOYER SUPPLIED BY EMPLOYER
Supply by Employer is a Contract requirement Separate Supply Contract (Clause 33.2)
(Clause 33.1) • As if the Contractor is making own
• Detailed procedural guidelines laid down arrangement (Clause 33.2(2)).
• Provisions as procedure of supply / delivery • Employer is not responsible for any delay:
and acknowledgement of supply / delivery
• No EoT
• Passing of risks
• No Costs
• Delay in supply by Employer will cause:
• EoT Clause 44
• Cost Clause 53

MATERIALS AND WORKMANSHIP EXAMINATION BEFORE COVERING UP

• Materials for incorporation into the Works • Contractor not to cover Works before
must be of a kind specified in the Contract, in Engineer has the opportunity to inspect them
accordance with Engineer’s instructions and (Clause 37.1(1)).
subject to tests if the Engineer requires
(Clause 36.1(1)). • Breach of Clause 37.1(1) can entitle Engineer
• Contractor is to supply samples (Clause 36.2). to instruct the Contractor to open up the
• Contractor to test materials at his own costs Works at the Contractor’s own costs.
(Clause 36.3).

EXAMINATION BEFORE COVERING UP REMOVAL OF REJECTED WORKS

The Engineer may instruct the Contractor to • Contractor to remove all rejected Works and
open up covered Works for inspection (Clause materials (Clause 38.1(1)).
37.2(1)).
• Contractor is to be informed by the Engineer
• If any part of the Works is found to be of the reason of non-acceptance of the Works
defective, the Contractor shall bear the cost of
uncovering and making good (Clause 37.2(3)). and materials (Clause 38.1(4)).
• If the Works are in order, the Contractor will • Employer or Engineer on his behalf may
be paid the cost of uncovering and making engage third party to remove rejected
good (Clause 37.2(4)). works/materials and set off costs.

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REMOVAL OF REJECTED WORKS PLANT, EQUIPMENT & MATERIALS

• Where the removal of rejected Works may • Plant and equipment is solely for the
cause more damage or is disproportionate to execution of the Works (Clause 39.1(1)).
the un-damage works, Employer may choose • Plant etc. not to be removed without the
to let the Works remain as it is but the Engineer’s permission once brought into the
Contractor is nevertheless in breach. (Clause Site (Clause 39.1(2)).
38.3). • The same applies to unfixed materials (Clause
• A diminution in value can be agreed for the 39.2).
breach.

PLANT, EQUIPMENT & MATERIALS DATE FOR COMPLETION

• For removal no approval is necessary after the Date for Completion (Clause 40.1(1))
Certificate of completion is issued. (Clause • Date is specified in Letter of Acceptance or in
39.3).
the Appendix;
• Employer is not liable for damage and
Contractor can take out his own insurance • Based on date for commencement specified
coverage for his plant (Clause 39.4). by the Engineer to be not more than 30 days
• Conditions for use of hired/leased plant and after receipt of letter of acceptance;
equipment after termination to be included • Mutually agreed date between Employer and
(Clause 39.5). Contractor.

SITE POSSESSION SUSPENSION

Contract may define: (Clause 41.1) If there are no contractual provision, Engineer
• Extent of site possession which is to be given has no authority to instruct suspension of
Works.
to the Contractor;
• If Engineer is so authorised, the Contractor is
• Order in which portions of the Site is to be not obligated to suspend unless so instructed.
given; Refer to Clause 42.1(1) and 42.1(3);
• Sequence of construction (departure from • If suspension is issued, Contractor must
principle that the Contractor is solely comply and provide protection of the Works.
responsible for construction) • EoT and Costs are claimable.

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SUSPENSION SUSPENSION
Consequence of Suspension: Prolonged suspension of more than 3 months
• EoT under Clause44 (Clause 42.3):
• Costs under Clause 53
However, EoT and Costs are not claimable if
suspension is: • If suspension is only for part of the Works, can
• Already provided for in the Contract consider as omission (Clause 42.3(2)(a))
• Necessitated by breach of the Contractor
• Caused by event which is the responsibility of the
Contractor • If suspension is for the whole of the Works,
• Necessitated for safety reasons Contractor can terminate (Clause 42.3(2)(b))

DATE FOR COMPLETION EXTENDED DATE FOR COMPLETION

Engineer can vary Date for Completion, either Grounds for Extension of Time (Clause 44.1(1)):
advance it or postpone it (Clause 43.2): • Variation under Clause 51;
• By express provisions of the Contract;
• Must be in good faith; • Occurrence of Employer’s Risks under Clause
• After consultation with the Contractor; 20.4;
• With increase or decrease in Costs. • Relocation of buried structure not shown in
Drawings;
• Generally, acts of prevention by Employer.

EXTENDED DATE FOR COMPLETION EXTENDED DATE FOR COMPLETION

• Engineer is to issue Certificate of Extended Date Contractor’s Notice (Clause 44.2);
for Completion (Clause 44.1(2); • This notice initiates the EoT process;
• Engineer does not grant EoT in number of days • Notice must be served with “reasonable
but fixes an extended Date for Completion.
despatch”;
• Certificate of Extended Date for Completion
• Grounds for extension or Clause 44.1(1)
must:
provisions must be stated;
– Certify extended Date;
– Ground for which extension is granted under Clause • Contractor to update if events are continuing,
44.1(1). within 28 days of stoppage.

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EXTENDED DATE FOR COMPLETION EXTENDED DATE FOR COMPLETION

• EoT is conditional on “delay to completion of • Overall concept is the Engineer’s Power, not
the Works beyond the Date for Completion duty to certify Extended Date for Completion;
(Clause 44.2); • Being a power, the Engineer thus cannot
• Therefore even if there is delay to certain exercise this function if no express provision
activities but this does not delay the Works or ground to extend;
beyond Date of Completion, there will be no • Contractor must act with “reasonable
EoT. despatch”, in serving the notice.

EXTENDED DATE FOR COMPLETION EXTENDED DATE FOR COMPLETION

Procedures for Engineer’s certification (Clause Certification after Date of Completion (Clause
44.3); 44.4);
• The Engineer can certify interim EoT; • Additional source of power of the Engineer to
• The Engineer may consider factors such as: certify extension;
– Previous certification • Prevents the lack of power to certify EoT
– Omission of Works which may lead to time being at large.
– Effect of substantial decrease in quantity of
Remeasured Works.

LIQUIDATED DAMAGES LIQUIDATED DAMAGES

• All governed by the Contracts Act 1950; • Certificate of Non-Completion (CNC) is a
condition precedent to deduction of
• There are no distinction between liquidated liquidated damages (Clause 46.2);
damages and penalty in Malaysia; • CNC must certify that “there is no reason why
the Contractor ought not to have completed
the Works” ;
• Federal Court cases has affirmed the need to
prove loss. • CNC is issued to NSC if the NSC delays the Sub-
Contract Works.

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CERTIFICATE OF COMPLETION CERTIFICATE OF COMPLETION

Completion signifies: Plain and simple completion and not
• No further deduction of LAD (if already
imposed)
“Practical Completion”
• Release of half Retention Monies
or
• Insurance coverage by Employer
“Substantial Completion”
• Liability for completed works by Employer
• Initiation of Defects Liability Period
Nevertheless common law rule applies

CERTIFICATE OF COMPLETION CERTIFICATE OF COMPLETION

• The Contractor initiates the process by issuing For the purpose of the Contract, ‘completion’
the “Completion Notice” (Clause 47.1) means:
• That the Works can be operational and used to
their full extent to satisfy the purposes and
• The Engineer than issues the Certificate of functions for which the Works were designed and
Completion (Clause 47.2). intended.
• That the Works are free of any defects which are
readily observed and recognised.
• That the Works have passed all the tests if such
tests are required by the Contract.

CERTIFICATE OF COMPLETION DEFECTS LIABILITY

For the purpose of the Contract, ‘completion’ For the purpose of the Contract, ‘defects’ means
means (cont.): Works (Clause 48.1(4))
• That even if the Works contain some defects, • Which are not constructed to the expressed or
the Engineer in his discretion considers that implied requirements of the Contract; or
– The purposes, functions safety and integrity • Which have deteriorated through the neglect
of the Works are not affected or of the Contractor.
compromised by these defects; and
– The defects are otherwise minor.

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DEFECTS LIABILITY SECTIONAL COMPLETION

Diminution in the value of the Works is acceptable if The following applies to Sectional Completion
(Clause 48.5(1)) (Clause 49.1)
• They do not affect directly or indirectly the safety,
integrity or aesthetics of the Works; • Clause 43 : Date for Completion
• The Works or part of the Works may be further • Clause 44 : Extended Date for Completion
damaged in the course of making good the defects; • Clause 45 : Rate of Construction
• The making good of the defects is relatively complex in • Clause 46 : Liquidated Damages
relation to the nature of the defects;
• The making good of the defects will take considerable • Clause 47 : Certificate for Completion
time and which will disrupt and inconvenience the • Clause 48 : Defects Liability
functional use of the Works.

VARIATIONS VARIATIONS
Descriptions of variations (Clause 51.2) • No variation without an instruction in writing
• Increase or decrease in quantity of the Works; by the Engineer (Clause 51.2(3);
• Omission of any part of the Works; • Variation with Works omitted and awarded to
• Change in the drawings; third party can lead to claim for loss of profit
(Clause 51.2(4);
• Removal or demolition due to change in
drawings; • Change in quantity of Remeasured Works do
not require written instruction.
• Change in sequence of timing of construction.

CLAIMS NOMINATED SUB-CONTRACTORS

Claims for ‘Costs’ (Clause 53) • Procedure for Nominated Sub-Contractors is in

Clause 57.1.
• Detail procedures for claims is in Clause • Objections to Nomination under Clause 57.2:
53.1, 53.2 and 53.3. – Poor financial standing/solvency
– Lack of technical competence
– Lack of plant and machinery
• Payment in Interim Payment Certificate is
detailed under Clause 53.4. • The Engineer may maintain the chosen NSC
despite objections.

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PAYMENT TO SUB-CONTRACTORS PAYMENT TO SUB-CONTRACTORS

Payment to Nominated Sub-Contractors (Clause Payment to Nominated Sub-Contractors (Clause
57.3) 57.3)
• The Engineer is to issue a separate NSC • Contractor to pay NSC within period for
Certificate in respect of each interim Payment honouring NSC certificate (Clause57.3(5))
Certificate • Contractor is not entitled to set off unless
there are express provisions in the Sub-
• This is a new provision Contract (Clause57.3(6));
• Engineer can ask from Contractor proof of
payment of previous certified amount.

NOMINATED SUB-CONTRACTORS INTERIM PAYMENT

Default of Nominated Sub-Contractors (Clause Contractor’s Interim Payment Application
57.4) (Clause 58.1)
• Termination subject to Engineer’s agreement; • Cumulative values of all Works;
• For some termination, Contractor may be • Material on Site;
entitled to: • Completed variations;
– EoT under Clause 44 • Claims for Costs;
– Costs under Clause 53
• Cumulative works of NSC’s

INTERIM PAYMENT FINAL PAYMENT

Suspension of Works for non-payment • Procedures and rules for application of
(Clause 58.4) Final Payment Certificate are laid out in
• Contractor to serve notice to the Employer; Clause 59.
• If non-payment persists, Contractor can:
• Suspend the execution of the works; or
• Effect of Interim and Final Payment
• Reduce the rate of construction.
Certificates are laid out in Clause 60.
• Contractor may also claim for:
– EoT under Clause 44
– Costs under Clause 53.

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EMPLOYER’S TERMINATION EMPLOYER’S TERMINATION

Terminology changed from “Determination of Grounds for termination due to breaches of the
Contractor (Clause 61.1);
Employment of Contractor under the Contract”
• Suspension without reasonable cause;
• Failure to proceed with the Works regularly and
Termination is a two stage process: diligently;
• Persistent neglects;
• Engineer issues Certificate of Default
• Abandonment;
• Employer issues Termination Notice • Persistent ignoring of instructions;
• Failure to provide performance bond;
• Assignment without consent

EMPLOYER’S TERMINATION EMPLOYER’S TERMINATION

However, immediate termination can proceed Effects after termination (Clause 61.4):
in the following cases: • Contractor to leave the Site;
• “act of bankruptcy” • Materials to be left behind;
• S.176 of Companies Act application • Other requirements under Clause 61.3(1) (a)
to (h).
• Winding-up order has been issued.
Payment after termination (Clause 61.4):
• Accounts to be prepared by the Engineer;
• Other requirements under Clause 61.4(2).

TERMINATION BY CONTRACTOR DISPUTE RESOLUTION

Termination is a two stage process: • Arbitration Act 2005 Part III applies.
• Notice of Default issued to Employer • Reference to Arbitration (Clause 63.1);
• Appointment of Arbitrator (Clause 63.2);
Termination due to breaches of the Employer • Powers of the Arbitrator (Clause 63.3);
(Clause 62.1) due to:
• Non-payment
• Interference or influencing certification
• Non-replacement of Engineer

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OPTION MODULES OPTION MODULES

A. CONTRACT SUM DIFFERENCE C. TERMINATION WITHOUT DEFAULT
– Only when the total sum in the Final Payment – Employer can terminate Contract without Default;
Certificate is less than the total sum in the Bills of
Quantities; (Termination for Convenience)
– Subject to good faith
B. PRICE FLUCTUATION
– cement, D. MEDIATION
– steel bars,
– Based on IEM Mediation Rules
– bitumen and
– diesel;

END
OF
PRESENTATION

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