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Termination Of Construction Contract By Owner And Contractor for Malaysia

Termination Of Construction Contract By Owner And Contractor Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that formalizes the mutual termination of a construction contract between the owner/employer and the contractor. This document outlines the terms and conditions for ending the construction contract, including final payment settlements, site handover procedures, treatment of materials and equipment, documentation requirements, and mutual releases from future claims. It ensures compliance with Malaysian construction laws, including the Construction Industry Payment and Adjudication Act (CIPAA) 2012 and the Contracts Act 1950, while providing a clear framework for project closure and resolution of outstanding matters.

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What is a Termination Of Construction Contract By Owner And Contractor?

The Termination Of Construction Contract By Owner And Contractor is a vital legal document used in the Malaysian construction industry when both parties mutually agree to end their contractual relationship before the natural completion of the project. This document becomes necessary when circumstances such as project viability changes, funding issues, or mutual agreement to cease works arise. It must comply with Malaysian legislation, including the Contracts Act 1950 and CIPAA 2012, and typically includes comprehensive provisions for financial settlements, asset disposal, documentation transfer, and liability releases. The agreement protects both parties' interests by clearly defining their rights and obligations during the termination process, helping prevent future disputes and ensuring an orderly project closure. It's particularly important in the Malaysian context where construction disputes can be complex and time-consuming to resolve through legal channels.

What sections should be included in a Termination Of Construction Contract By Owner And Contractor?

1. Parties: Identification of the Owner/Employer and Contractor, including full legal names and addresses

2. Background: Brief description of the original construction contract, project details, and circumstances leading to termination

3. Definitions: Definitions of key terms used throughout the agreement

4. Termination Date and Effect: Specifies the effective date of termination and immediate consequences

5. Outstanding Works and Payment: Details of work completed, work in progress, and agreed final payment amounts

6. Site Handover: Procedures and timeline for handover of the construction site, materials, and equipment

7. Documentation and Records: Requirements for transfer of relevant documents, drawings, and records

8. Mutual Release and Discharge: Release of claims and liabilities between parties, subject to specified exceptions

9. Warranties and Guarantees: Treatment of existing warranties and guarantees for completed works

10. Governing Law and Jurisdiction: Confirmation of Malaysian law as governing law and jurisdiction for disputes

What sections are optional to include in a Termination Of Construction Contract By Owner And Contractor?

1. Retention of Subcontractors: Used when there's agreement for certain subcontractors to be retained by the owner for project completion

2. Intellectual Property Rights: Include when there are specific IP rights that need to be transferred or protected

3. Confidentiality: Required when parties need to maintain confidentiality about the termination or project details

4. Insurance and Bonds: Include when dealing with existing insurance policies and performance bonds

5. Dispute Resolution: Detailed dispute resolution procedures if not covered in governing law section

6. Survival Clauses: Include when certain obligations need to survive the termination

7. Third Party Rights: Include when there are affected third parties whose rights need to be addressed

What schedules should be included in a Termination Of Construction Contract By Owner And Contractor?

1. Schedule 1 - Original Contract Details: Summary of key details from the original construction contract

2. Schedule 2 - Completed Works: Detailed list of works completed up to termination date

3. Schedule 3 - Outstanding Works: List of incomplete works and their status

4. Schedule 4 - Payment Summary: Detailed breakdown of all payments made and outstanding amounts

5. Schedule 5 - Site Materials and Equipment: Inventory of materials and equipment on site

6. Schedule 6 - Required Documentation: List of documents, certificates, and warranties to be handed over

7. Appendix A - Site Handover Checklist: Detailed checklist for site handover process

8. Appendix B - Final Account Statement: Detailed financial statement showing final settlement figures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions



























Clauses



























Relevant Industries

Construction

Real Estate Development

Infrastructure

Commercial Property

Industrial Development

Residential Development

Public Works

Healthcare Facilities

Educational Facilities

Hospitality

Retail Development

Relevant Teams

Legal

Construction

Project Management

Commercial

Finance

Procurement

Operations

Risk and Compliance

Technical Services

Contract Administration

Relevant Roles

Project Manager

Construction Manager

Contract Administrator

Legal Counsel

Quantity Surveyor

Project Director

Chief Operating Officer

Development Manager

Site Manager

Commercial Manager

Finance Director

Risk Manager

Procurement Manager

Technical Director

Industries





Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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