BT B E 30 5 3

CO NS T R U C T IO N L A W
TUTO R I AL 1
U C T I O N T O C O N S T R U C T I O N L AW
IN TR O D
QUESTION 1
What are contractual obligations?
ANSWER
Contract obligations are those duties that each party is legally
responsible for in a contract agreement. In a contract, each party
exchanges something of value, whether it be a product, services,
money, etc. On both sides of the agreement, each party has various
obligations in connected with this exchange.
QUESTION 2
Who are the typical parties to a construction and engineering project?
ANSWER
• The number and types of parties involved would be dependent on the
nature and complexity of the project.
• Traditionally, the design phase would be separate from the construction
phase.
• During the design phase, the owner (also known as the employer) would
hire a design team consisting of architects, quantity surveyors and
civil engineers to determine a workable design for the project.
QUESTION 2 (Cont’d)
ANSWER
• Once that is completed, the construction phase is then engaged when the
owner hires a main-contractor to construct the project. It is common for the
project works to be divided into sub-contract packages, which are then
sub-contracted to various specialist sub-contractors.
• Alternatively, the Owner may prefer a single point of responsibility by
appointing a main contractor who would be responsible for both the
design and the construction of the project. This would be similar to a
design and build model.
• Technical and design consultants may also be directly engaged by the owner
as and when required to provide their expertise in the project.
QUESTION 3
What is a construction contract?
ANSWER
A construction contract is a mutual or legally binding agreement between
two parties based on policies and conditions recorded in document form.
The two parties involved are one or more owners, and one or more
contractors. The owner has full authority to decide what type of contract
should be used for a specific development to be constructed and to set
forth the legally-binding terms and conditions in a contractual agreement.
A construction contract is an important piece of document that outlines
the scope of work, risks, duties, and legal rights of both the contractor
and the owner.
 QUESTION 4
Based on your understanding, what is the difference between rights
and obligations?
ANSWER
✍ The difference between contract rights and contract obligations is that one
is a benefit you are receiving from the contract while the other is a duty or
responsibility that you promised to perform under the contract.

✍ Contract obligations are those duties that each party is legally responsible
to perform under a contract agreement.
QUESTION 5
What are the standard forms of contract available in Malaysia for the
construction sector?

ANSWER
• Generally, the type of standard forms of contract are divided into two divisions, one
being the public sector standard forms of contract and the other being private sector
standard forms of contract.
• In the Public sector, standard forms are issued by Jabatan Kerja Raya(JKR) and there
are PWD Form 203A(Rev.1/2010), PWD Form 203(Rev.1/2010), PWD Form
203N(Rev.1/2010), PWD Form 203P(Rev.1/2010) and PWD Form DB(Rev.1/2010).
The truth to speak is that PWD forms of contract is perceived to be more beneficial to
the employer.
QUESTION 5(cont’d)
ANSWER
• Meanwhile, the standard forms of contract in the private sector are produced by
authorities or professional bodies in Malaysia as follows:-

a. Pertubuhan Akitek Malaysia(PAM);

b. Asian International Arbitration Centre(AIAC);

c. Construction Industry Development Board(CIDB);

d. Institution of Engineers Malaysia(IEM).

QUESTION 6
What is the purpose of a construction contract?
ANSWER
It's important for parties entering into any significant economic
transaction to have written contracts. This is especially true
for construction projects which are, by their nature,
complicated. A contract on a construction project sets forth the
parties' obligations to each other and determines how risks
will be shared or divided on the project.
QUESTION 7
What Is Dispute Resolution in Construction Contracts?
ANSWER
✍ A dispute resolution in construction contracts is vital because it prevents
potential legal action. Construction disputes take place because one party
may breach the contract in some manner, or a simple miscommunication
between parties could arise.
✍ Construction dispute resolution starts with the contract itself and the inclusion
of dispute clauses. Other preventive steps to take include:
💥 Reading and understanding the contract
💥 Negotiating potential clauses that are unclear and problematic
💥 Diligence pertaining to pre-construction work in the form of estimates,
hiring subcontractors, schedules, and ordering certain items.
QUESTION 8
What is the difference between dispute resolution and settlement?
ANSWER
✍ True conflict resolution often requires a more analytical, problem-solving
approach than dispute settlement.

✍ The main difference is that resolution requires identifying the causal

factors behind the conflict, and finding ways to deal with them. On the
other hand, settlement is simply aimed at ending a dispute as quickly
and amicably as possible.
QUESTION 9
What is liability in a tort contract?
ANSWER
✍ Tort laws govern the rights of victims to pursue legal claims against
tortfeasors. When a victim is harmed or suffers damages, the victim can
pursue a claim in civil court under tort laws.

✍ Tort liability can arise out of negligence or intentional wrongdoing.

Some torts are also strict liability torts, which means a defendant is liable
for damages regardless of whether they were negligent or intended to
commit a wrongful act.
 QUESTION 10
What are the three types of tort liability?
ANSWER
✍ There are different legal rules that can result in a tortfeasor being held
liable for committing a tort.

✍ These include negligence; intentional torts; vicarious liability; and strict

liability.