The Construction Agreement Between Owner And Contractor is a fundamental document in Malaysian construction projects, essential for establishing legally binding obligations between property owners/developers and construction contractors. It is typically used when engaging a contractor for new construction, renovation, or development projects of any scale. The agreement must comply with Malaysian construction laws, including the Construction Industry Development Board Act 1994, CIPAA 2012, and relevant building regulations. It contains detailed provisions for project scope, payment terms, completion timelines, quality standards, variation procedures, and dispute resolution mechanisms. This document is crucial for risk management and project success, providing clear guidelines for project execution while protecting the interests of all parties involved.
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1. Parties: Identifies and provides full details of the Owner and Contractor, including registration numbers and addresses
2. Background: Describes the project context, Owner's requirements, and Contractor's capabilities
3. Definitions: Defines key terms used throughout the agreement
4. Scope of Work: Detailed description of the construction works to be performed
5. Contract Sum and Payment Terms: Specifies the total contract value, payment schedule, and payment mechanisms
6. Time for Completion: States the commencement date, completion date, and project milestones
7. Contractor's Obligations: Lists all duties and responsibilities of the Contractor
8. Owner's Obligations: Details the Owner's responsibilities and obligations
9. Materials and Workmanship: Specifies quality standards for materials and work execution
10. Variations: Procedures for handling changes to the scope of work
11. Extensions of Time: Circumstances and procedures for time extensions
12. Defects Liability: Contractor's responsibilities for rectifying defects during the liability period
13. Insurance and Indemnity: Required insurance coverage and indemnification provisions
14. Termination: Grounds and procedures for contract termination
15. Dispute Resolution: Procedures for resolving disputes between parties
16. Governing Law: Specifies Malaysian law as governing law and jurisdiction
1. Performance Bond: Required when project value exceeds certain threshold or when owner requires additional security
2. Advance Payment: Included when advance payment is to be made to the contractor
3. Liquidated Damages: Specifies compensation for delay when specific damages can be pre-estimated
4. Site Conditions: Included when specific site conditions need special attention or pose unique challenges
5. Environmental Requirements: Required when project has significant environmental impacts or requirements
6. Force Majeure: Detailed force majeure provisions for projects in areas prone to natural disasters or specific risks
7. Intellectual Property Rights: Included when design elements or proprietary methods are involved
8. Confidentiality: Required for projects involving sensitive information or proprietary designs
9. Local Authority Requirements: Included when specific local authority compliance needs detailed attention
10. Subcontracting: Required when subcontracting is permitted and needs specific regulation
1. Schedule 1 - Contract Drawings: Complete set of architectural and engineering drawings
2. Schedule 2 - Technical Specifications: Detailed specifications for materials and construction methods
3. Schedule 3 - Bill of Quantities: Itemized list of quantities and rates for all work items
4. Schedule 4 - Payment Schedule: Detailed breakdown of payment milestones and amounts
5. Schedule 5 - Construction Program: Detailed timeline of construction activities and milestones
6. Schedule 6 - Site Plan: Detailed plan showing site boundaries and access points
7. Schedule 7 - List of Approved Subcontractors: Pre-approved subcontractors for specific work packages
8. Schedule 8 - Forms and Certificates: Standard forms for variations, completion certificates, and other documents
9. Schedule 9 - Insurance Requirements: Detailed specification of required insurance coverage
10. Schedule 10 - Quality Assurance Plan: Detailed quality control and assurance procedures
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