Construction Law 101: A Brief Overview

“Eh, does your boss require you to go for site inspection whenever there is a case?"

“Har? means carrying bricks is part and parcel of your job scope?”

Unsurprisingly, these are common questions construction lawyers receive.

The answers to the above questions are, generally, no.

Construction law encompasses several facets, each playing a vital role in ensuring the smooth functioning of construction projects. The first three components you should know are:

Construction Contracts: 

In general, parties are given the freedom to formulate their construction contracts, provided they are entered into without fraud or misrepresentation. Despite this freedom, standard-form construction contracts have become commonplace in the industry. Some of the distinguished examples include Public Works Departments (PWD) forms, Pertubuhan Akitek Malaysia (PAM) contracts, Asian International Arbitration Centre (AIAC) 2019 Standard Form Building Contracts, Construction Industry Development Board Malaysia (CIDB) Standard Form of Contract for Building Works and Institution of Engineers Malaysia (IEM) Form of Contract.

Typical Construction Disputes: 

Construction disputes often revolve around issues such as late or incorrect payment for works and services, non-completion or delayed completion of works, defective works and associated rectification costs, variation works, and premature or wrongful termination of construction contracts.

Dispute Resolution Mechanisms: 

To address conflicts efficiently, four dispute resolution mechanisms are commonly employed such as Court Proceedings, Arbitration, Adjudication (under the Construction Industry and Adjudication Act 2012 or CIPAA 2012), and Mediation. Nonetheless, if parties have included an arbitration clause in the construction contract, disputes are typically referred to arbitration unless it is null, void, inoperative, or incapable of being performed.

This overview offers a brief introduction to those who are interested in indulging themselves in the field. Keep an eye out for our next article!