CONSTRUCTION CONTRACTS

CONSTRUCTION CONTRACT

 An agreement between the Client and the

Contractor or the Main contractor and the sub
contractor/supplier

 The Contractor agrees to perform the work while

the client agrees to pay for the work done by
contractors

 Based on price, time and details and conditions of

the contract specified
 This agreement is usually signed by both
parties in the Form of Contract. (Form of
Contract ") area

 Contract form that is commonly used in

Malaysia are:
a) Contract Form JKR (Jabatan
Kerja Raya)
b) Contract Form PAM (Pertubuhan
Arkitek Malaysia)
c) Contract Form CIDB
(Construction Industry Development Board)
 PURPOSE OF CONTRACT
1. In general, it is to establish a relationship between the
employer and the contractor – to be more clear about
the facts and conditions.

2. Explaining all forms and programming work required by

the employer .

3. Completed its work perfectly without prejudice to the

minimum quality and design as required

4. Solve all kinds of work in accordance with the stipulated

time
 CONTRACT REQUIREMENTS

1. To form a binding contract with the foster good relations

between the two sides in the form of statements and
conditions and set limits with clearly explained.

2. All items must be disclosed along with a clear explanation

to facilitate the contractor to understand what is required
by the employer and the offer price.
 PRINCIPLES OF CONTRACT
1.Based on the Contracts Act 1950 (revised 1974): some of the
contracts should be known and it is very important in
understanding the actual contract. .

2. There are:-
a. Offer (Tawaran)
b. Acceptance (Penerimaan)
c. Response (Balasan)
d. Intention (Niat)
e. Approval of a legally
f. Contract commitments can be implemented
g. No defects of both sides
The types of contracts are common practiced in
Malaysia:

 Lump Sum Contract

(Kontrak Tanpa Kuantiti/Kontrak Pukal)

 Bills of Quantities Contract

(Kontrak Dengan Kuantiti /Kontrak Senarai Bahan)

 Design and Build Contract / Turnkey Contract

(Kontrak Reka Dan Bina)

 Build, Operate and Transfer Contract (BOT Contract)

 Etc.
 LUMP SUM CONTRACT

 Based on the prices offered by the contractor

that refers to specification, drawings(lukisan,
perincian) AND schedule of rates (senarai kadar
harga)

 No quantity of material available in this type of

contract
 Drawings – refer to the shape and size of
the building

 Specifications – describes on the

materials, methods of work and quality
work .

 Built up rates – is the fixed price which is

only used if there are amendments to the
work.
 In this contract the Contractor must issue its
own quantity of materials based on the
drawings and a rough estimate based on the
items specified in the Offer Summary
 BILL OF QUANTITIES CONTRACT
 Based on the price for each item as listed in the
bills of quantities

 Bills of Quantities is a description of the types and

quantity of all materials to be used in a job.

 The list of these materials are usually prepared by

the Consultant Quantity Surveyor based on the
drawings.
 The contractor only has to determine the
estimated price for each item listed and the
sum of the quantities specified for the total
number of such works.

 The rates made by the contractor will also be

used if there are amendments to the work.
 DESIGN AND BUILD CONTRACT
 According to the contractor appointed by the client
for their (design), develop (build) and
'commissioning' of a project.

 Overall, the construction from start to completion is

carried out by the contractor.