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Determination: Group 5

The document discusses various clauses related to suspension, termination, and default on construction projects. It summarizes clauses around suspension of work, events and consequences of contractor default, termination for national interest or illegal activities. It also outlines payment terms for suspension, termination, certificates of termination payment, events and consequences of government default, and permissible claims if the contractor terminates due to government failure to act after receiving notice.

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214 views30 pages

Determination: Group 5

The document discusses various clauses related to suspension, termination, and default on construction projects. It summarizes clauses around suspension of work, events and consequences of contractor default, termination for national interest or illegal activities. It also outlines payment terms for suspension, termination, certificates of termination payment, events and consequences of government default, and permissible claims if the contractor terminates due to government failure to act after receiving notice.

Uploaded by

illya amyra
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DETERMINATION

Group 5

Present by:
• AFIQ ZAKWAN BIN YASA’A (2017204794)
• AHMAD IKRAMI BIN MAHSHAR (2017204722)
• NUR SYAZA BALQIS BINTI ROSMAN (2017204834)
• SITI NAJIHAH BINTI IBRAHIM (2017202668)
A) SUSPENSION OF WORKS
1. Suspension of work is ordered by SO in order to resolve issue regarding aspect of construction projects.
2. Suspension of work happens for a number of reasons. This includes:
• Engineering issues
• Changes in scope of work
• Discovery of hazardous materials
• Protection from unsafe conditions
• Not having worker’s compensation insurance for employees
3. When a suspension of work has been issued, all activity on a construction site must be stopped. Provisions
must be made for material orders that have already been made and a plan must be established for
handling subcontractors. Typically, an evaluation of the construction site determines if work can resume, if the
suspension should be extended, or if project termination needs to be considered. It’s important to note that a
suspension of work can be issued for portions of projects, allowing other parts of the project to continue
without interruption.
PWD CLAUSE :
PAM CLAUSE :
CASE STUDY
Issue of late or non-payment.

In Kah Seng Construction Sdn.Bhd. v Selsin Development Sdn. Bhd, 20 it


was stated that a Contractor’s response to actual or alleged breaches of contract
by the owners by suspending or deliberately going slow are extremely perilous.
In this case, the plaintiff contended that it was entitled to suspend works
because of non payment of one certificate and partial non payment of another.
The defendant argued that even if the Defendant was not entitled to set off
sums of monies for delay and defective works against sums due to the Plaintiff
in the interim certificates, there was no provision in the rudimentary contract
between the parties for non payment of certified sums and that the Plaintiff’s
admitted suspension was wrongful.
CASE STUDY (CONT’D)
The judge held that:

‘There is no intermediate right in a building contract to suspend works. If


the Contractor insists on the continued performance of the contract, i.e. he
affirms the contract, he must himself continue to perform his primary
obligations under the contract i.e. continue performing the contract
works. That is why suspension of the works by the contract, i.e. not
continuing with his primary obligations, becomes itself a repudiatory
breach by the Contractor’
B) EVENTS & CONSEQUENCES OF DEFAULT BY CONTRACTOR
1. The default can be determined if he failed to be carried out works in
proper ways, breech of contract or become bankrupt.

PWD CLAUSE :
PWD CLAUSE (CONT’D) :
PAM CLAUSE :
2. Contractor can be terminated if he failed to cure the problems occur within
time given
PWD CLAUSE :

PAM CLAUSE :
3. If the contractor was terminated, he should carried out consequences
as stated in the clause.

PWD CLAUSE :
PWD CLAUSE (CONT’D) :
PAM CLAUSE (CONT’D) :
C) TERMINATION ON NATIONAL INTEREST
1. TERMINATION
a) In the Contract, whatever provision be setup in it can be terminate by Government.
The termination of the Contract must be conduct in written order that be given not
less than 30 days to the contractor without stated any reason to them. Government
may terminate the contract if the they find out that the termination is necessary to
the national interest, national policy or national security.

b) The reason this clause be published is whatever for "national interests", “national
policies”, and “national security” shall be governed and determine by the
Government. All the termination from Government is for all intent and purposes be
final and conclusive and shall not be dispute.
PWD CLAUSE :
2. CONSEQUENCES OF TERMINATION

a) The payment of the cost (expenditure and others) is compulsory that be pay by
the Government and the Contractor need to be sure that they is suitable/followed
with clause 54.

PWD CLAUSE :
D) TERMINATION ON CORRUPTION, UNLAWFUL OR
ILLEGAL ACTIVITIES
1. Termination
• Without affecting others Government sector, if the Company and their subordinates
be charge by court of law due to the corruption or any others activities that related
in against the law or against the Contract that be agree with Government, The
Government can terminate their Contract in any times with immediate written notice
to Contractor.
2. The Government
• The Government entitle of all the cost that be occur about termination after the
termination happen
• To avoid any doubt, the Parties stated and agree that the Contractor do not has
right in any form of losses, damages, or any claims after the contract is be
terminate
PWD CLAUSE :
E) PAYMENT UPON SUSPENSION AND TERMINATION
ON NATIONAL INTEREST
-All payment to contractor due to suspension and termination by
government shall be discuss in this clause if they meet requirement in clause
50 & clause 52
-Not all items could be claim by contractor due to suspension or termination
of contractor by government.

PWD CLAUSE :
Items could be claim by contractor :
a) The value of all work carried out up to the date of termination
b) Amounts payable in respect of any preliminary items so far as the Work or services
comprised a certain therein has carried out or performed and a proper proportion
of any such item which have been partially carried out of performed
c) Cost of materials or goods reasonably ordered for the work which have been
delivered to Contractor or of which contractor has legally liable to accept delivery
(such materials or goods become property of Government upon such payment
being made to Contractor)
d) A sum being amount of any expenditure reasonably incurred by Contractor in so
far as such expenditure has been recovered by any other payment referred to in
this sub-clause
e) Reasonable cost of any protection works and removal of equipment and site
facilities pursuant to termination as provided under Contract
- All amount of payment by government shall be confined only to items that
clearly and expressly stated in sub-clauses (a)-(e)
• All claim by contractor under clause 54 should only cover works from clause
54.1(a)-(e) and no other claims outside the scope are realiable . All amount
agreed by Government considered as final decision by both parties

• Since no all works has been terminated by government under clause 52 & 53 ,
contractor should issued and prepare final account from this contract to make
sure all necessary item by contractor counted and taking into consideration
before contract end( final payment)
F) CERTIFICATE OF TERMINATION PAYMENT
• There are many reasons for terminating a construction contract. Some of the most
common are non payment by the owner or contractor, non performance by the
contractor or subcontractors, timeliness of performance, lack of communication or
simply an inability to get along. These issues should be addressed in a
construction contract.

PWD CLAUSE :
• Due to the termination, government will take full responsibilities about any of
loss such as if there are any unpaid payment to the contractor.
PWD CLAUSE (CONT’D) :
• Completion cost and final contract sum shall be different in the certificate of
termination cost because if the contract sum is less than completion cost, the
contractor need to pay back the government. Refer clause 56.4 – 56.6

PWD CLAUSE :
G) EVENTS AND CONSEQUENCE OF DEFAULT BY GOVERNMENT
• This clauses discuss on how the contractor may claims and consequences on
government default and effect for not fulfill their (government) obligations

PWD CLAUSE :
• Contractor may issue notice that shows governments failure and negligence. This
require government to fix in period agreed by both contracting parties in contract
document.

PWD CLAUSE :

Item government should pay contractor if terminated under clause 55(b)


a) The value of all work carried out up to the date of termination
b) Amounts payable in respect of any preliminary items so far as the Work or services
comprised a certain therein has carried out or performed and a proper proportion of any
such item which have been partially carried out of performed
CONT’D
c) Cost of materials or goods reasonably ordered for the work which have
been delivered to Contractor or of which contractor has legally liable to
accept delivery (such materials or goods become property of Government
upon such payment being made to Contractor)
d) A sum being amount of any expenditure reasonably incurred by
Contractor in so far as such expenditure has been recovered by any other
payment referred to in this sub-clause

• If government has received the noticed by contractor and fail to act within
stipulated time, contractor have right to immediately terminate the contract

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