Law For Construction CEM583
Law For Construction CEM583
Law For Construction CEM583
CEM583
This assignment is conducted to evaluate students on their cognitive (problem solving) which will focus
on their ability to deal with relevant Construction Laws. This assignment is to be carried out INDIVIDUALLY
related to the problem statement specified.
There are one (1) Course Outcome (CO) and one (1) Programme Outcome (PO) to be addressed by this
assignment as mapped in the following table.
CO1: Explain and assess the scenario PO3: Ability to design systems, components or
according to the laws, bylaws and regulations processes for complex engineering problems
relating to the design and construction that meet specified needs with appropriate
of civil engineering works in Malaysia. consideration for public health and safety,
cultural, societal and environmental
considerations.
Based on the COPO mapping above, the following Learning Outcomes to be attained by the students at
the end of this group assignment are as follows:
1. Students must be able to impart effectively Malaysian Legal System into the construction industry.
2. Students must be able to describe and explain the principle and elements of contract, contract
performance and remedies cause by breach of contract in Malaysia among parties involved in the
contract.
You are required to identify and obtain information related to court case (attach in Appendix)
discusses contract-related cases in the building or infrastructure project in Malaysia that uses any
one of the following types of contracts.
❑ PAM Contract
❑ CIDB Contract
❑ IEM Contract
❑ PWD(JKR) Contract
You are required to identify the 9 basic elements of a contract in the project and describe it using the
understanding you gained in class as well as your self-study.
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OCTOBER 2021 – FEBRUARY 2022
EC221 UNIVERSITI TEKNOLOGI MARA CAWANGAN PULAU PINANG
INDIVIDUAL ASSIGNMENT: CEM 583 - LAW FOR CONSTRUCTION
30 marks
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OCTOBER 2021 – FEBRUARY 2022
EC221 UNIVERSITI TEKNOLOGI MARA CAWANGAN PULAU PINANG
INDIVIDUAL ASSIGNMENT: CEM 583 - LAW FOR CONSTRUCTION
a. General format:
● Font: Arial (size 11, single spacing)
● There will be penalties (marks deduction) for plagiarism between individuals report.
b. Specific format
c. Rubrics are provided for the assessment of all the task given.
Date for report submission: 17th of January 2022 before 5.00 pm. Please include the evaluation
form in your submission.
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OCTOBER 2021 – FEBRUARY 2022
EC221 UNIVERSITI TEKNOLOGI MARA CAWANGAN PULAU PINANG
INDIVIDUAL ASSIGNMENT: CEM 583 - LAW FOR CONSTRUCTION
Task 2 Analyse and discuss the Poor Acceptab Acceptable Good Excellen /18
facts of the court case discussion le discussion discussion t
chosen in Task 1 referring to on only 2 discussio on 6 basic on 8 basic discussi
9 basic elements of contract basic n on 4 elements of elements on on 9
in the project: elements of basic contract of contract basic
(a) Offer contract elements element
(b) Acceptance of s of
(c) Intention to create legal contract contract
relations
(d) Consideration
(e) Certainty
(f) Capacity
(g) Consent
(h) Legality
(i) Possibility
Task 3 Propose with justification Poor Acceptab Acceptable Good Excellen /7
solutions/actions/remedies proposal le proposal proposal t
to prevent the cases from with no proposal with with proposal
occurring against in the justification with poor justification justificatio with
future. justificati n. clear
on. justificati
on.
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OCTOBER 2021 – FEBRUARY 2022
UNIVERSITI TEKNOLOGI MARA
LAW FOR CONSTRUCTION CEM583
0CT-FEB 2022
TABLE OF CONTENTS
LIST OF FIGURE
LIST OF FIGURES
Few laws of construction need to be referred for better flow of work on this infrastructure
project. Contractor should have 9 basic element of the contract in the project which is (a) A clear or
firm offer or proposal, (b) An acceptance of the offer/proposal, (c) Intention to create legal relations,
(d) Consideration, (e) Certainty, (f) Capacity, (g) Consent, (h) Legality and (i) Possibility.
(a) Offer
A firm offer is one that is lasting for a specified period of time or until a specified
moment or occurrence occurs, after which it cannot be withdrawn. While the agreement
between them is justified, the contract between them cannot be revoked prior to
acceptance. The Defendant approached the Plaintiff in early 2011 and requested them
to quote for engineering consultant services for the project. On 18 February 2011, the
Plaintiff provided the Defendant with a quotation proposal. The proposal is reproduced
below.
(b) Acceptance
(d) Consideration
Both parties must contribute to the validation of the other's pledge. Consideration is
the price of obtaining the other's pledge. Nonetheless, this cost does not have to be
quantifiable in monetary terms. If the commitment is not accompanied by consideration, it
is merely a promise and is not enforceable under statute. Furthermore, consideration must
be both genuine and legal. According to the engineering contract definition, consideration
can also refer to everything given, completed, or endured by one party in exchange for
another party's action or inaction. It must have a valid or legal interpretation. According to
Section 2(d) of the Contracts Act 1950, if a promise or a promise has been made, or has
not been made, or has been agreed to do, or has not been agreed to do, an act or
abstinence or a promise is referred to as a consideration of a promise. The consideration
or subject matter of the agreement shall be lawful, unless it is banned by law. It would
break any law if it were allowed to do so, it considers as a scam, and the court says it's
unethical or against the public good. The Defendant agreed to the Plaintiff's proposal since
they will provide engineering consultant services for the project and will be paid the agreed
fee. This consideration will profit both of them.
(e) Certainty
Certainty can relate to the fact that the contract's terms must be certain or capable of
being concluded. The cost of certainty for this project was provided in the proposal
document. It was stated here that the suggested professional rate would be 1.25 percent
of the total cost of the work. The employer is responsible for the service tax, which is
currently set at 6%, and the consultancy agreement, which is set at 0.1 percent. The pay
shall be paid according to the completion of each stage.
(f) Capacity
According to Section 11 of the Contracts Act 1950, any person who is of legal age
according to the legislation to which he or she is subject and who is of sound mind and is
not prohibited from contracting by any law to which he or she is subject is competent to
enter into a contract. Ability or competence to enter a legally binding contract and/or
agreement with another party. The contractor must meet certain conditions in order to
enter into a legally enforceable contract. The bidder must possess all necessary
equipment to complete the allocated project, and the client must meet the terms of the
agreement. If the contract is not qualified, it may create complications in completing the
task. Qualification is very important because it can help to avoid problems while doing
work, which is why it is so important. The Defendant in this case fail to complete the full
payment allocated by the Plaintiff as the Plaintiff has done the engineering consultancy
service according to their agreement.
(g) Consent
According to Section 14 of the 1950 Contract Act, the parties must enter into a contract
willingly. The permission must not be acquired through force, lying, blackmail, etc.
Consent, according to the legal definition, is not based on compliance with or conscious
acceptance of a course of action. It is not always appropriate if the property was obtained
through coercion, deception, or undue influence. If permission is gained by exploiting
either of these flaws, the contract is void. In simple terms, consent is the acknowledgment
UNIVERSITI TEKNOLOGI MARA
LAW FOR CONSTRUCTION CEM583
0CT-FEB 2022
that there is a contract between the two people who signed it. Both parties must agree to
the contract on their own. In this case, consent would not be voluntary or real if one party
tried to deceive or threaten the other. In this case, the Defendant accepted to the terms of
the Plaintiff's proposal. This demonstrates that both parties are willing and capable of
contributing to the project's completion and supervision.
(h) Legality
Legality is defined as a legally binding agreement or contract between two parties.It is vital
to confirm that the deal was valid, as a court will not enforce an illegal contract in the future.
One of the legal agreements was a contract paper that was signed by all parties involved.
If anything were to occur in the future, the case may be brought to court for justification.
For this project, the Defendant entered into a legal contract with the Plaintiff by signing a
contract proposal document that included terms of condition, scope of work, and many
others.
(i) Possibility
The possibility referred to as the contract binding must be realistic, as a legal contract
cannot be entered into to perform an impossible act. Before a project was launched,
numerous processes were taken to ascertain the project's background, design, remedial
measures, and cost before the contract was opened for tendering. The Defendant has
requested that the Plaintiff provide civil and structural engineering consulting services, for
which the Plaintiff is qualified for this work.
UNIVERSITI TEKNOLOGI MARA
LAW FOR CONSTRUCTION CEM583
0CT-FEB 2022
From the court case the conflict between Defendant and Plaintiff arise as the
Defendant fail to pay the Plaintiff on the agreed amount. The Defendant claim that the charge
upon him is extravagant as the work perform by the Plaintiff is incomplete. To prevent this
from happening, a simple or brief offer or proposal should be written in clearly, so that there is
no mistake between both sides.
According to Section 2(a) of the Contract Act of 1950, when one person expresses to
another his readiness to undertake anything, he must propose that the other party consent to
the act. The offer expresses the individual's readiness to enter into a legally binding contract.
Its provisions must convey, either formally or informally, that it will become binding on the
proposer upon acceptance by the recipient. A firm offer is one that is valid for a specified
period of time or until a specified time or event occurs, during which time it cannot be
withdrawn. The defendant should specify the job that the plaintiff is responsible for, so that the
plaintiff can complete it properly.
Any person involved in any engineering feat must have a high level of integrity inside
themselves. When problems with a project occur, there will blame each other to avoid
consequences. This must be handled professionally since individuals require trust in order to
collaborate with each other. The reputation of each other is at stake because news will
circulate, and perhaps none of the other organisations will want to work with you in the future.
Individuals must, however, be held accountable for fulfilling their jobs in accordance with time,
quality, and cost expectations.
Apart from that, both parties should agree to a penalty if either side violates the
agreement. This can prohibit a party from breaching the contract, as they will face financial
consequences if they do not adhere to the agreement's terms. According to the Contract Act
of 1950, if either of the parties breaches the contract, the agreement is null and void.
BETWEEN
AND
GROUNDS OF JUDGMENT
Introduction
Preliminary
[4] In the action, the Plaintiff prayed for the following reliefs in
paragraph 41 of the statement of claim:
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(iii) Costs;
(v) Such other reliefs deemed fit and just by this Honourable Court.
[7] The Plaintiff called its managing director Dr. Wong Fook Keong
(SP-1) as its sole witness at the trial.
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(iii) Tan Ean Seng (SD-3), the project manager of the Defendant; and
Background Facts
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[17] On the same day on 2 January 2015, the Plaintiff gave the
Defendant 60 days notice of termination in accordance the
Regulations of the Board of Engineers Malaysia.
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[24] From the pleadings and submissions made by the parties, there
is my view only a sole issue which required determination, to wit; the
proper remuneration of the Plaintiff for the civil and structural
engineering consultancy services rendered to-date.
[25] The Plaintiff contended that it is entitled to the sum in all its
three invoices sent to the Defendant as claimed plus a further
RM36,093.75.
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[27] On the other side, the Defendant contended that the Plaintiff’s
claim is grossly excessive. According to the Defendant, the Plaintiff
did not complete the services as contracted due to the Plaintiff’s own
termination of the provision of the civil and structural engineering
consultancy services pursuant to the Appointment Letter.
[28] The Defendant stressed that it has fairly and reasonably paid the
Plaintiff the sum of RM220,351.25 in total for the civil and structural
engineering consultancy services rendered thus far. This is because
the Plaintiff had provided services relating to the infrastructure only
but not on the building structure of the Project.
[30] The services rendered by the Plaintiff here have been partially
performed only.
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ILLUSTRATIONS
“I have earlier in this judgment set out a short list of the work
done and services rendered by the plaintiffs. Following the
principle laid down by BIRKETT J., what I think I have to do is
to take all these matter into account. For example, I have to take
into account the fact that the parties referred to a percentage.
As I said before that was a matter which was clearly in the
minds of the plaintiffs and the defendant. But I think what I have
to really take into account is this. First of all I have to consider
and form my own opinion as to the true estimate of the merit of
the work done and services rendered. I should have thought it
quite impossible (as urged by counsel for the defendant) to
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“I don’t know what are people are like, but in the ordinary
affairs of everyday life, quite apart from professional life, if one
has a problem of conduct, or whatever it may be, it is
continuously hovering in the mind. If you are going to write a
book or if you are embarking on some project of that nature the
thing is continuously with you until the work is accomplished,
but you cannot estimate the thing upon a time basis. The moment
of inspiration that comes to a man in almost any walk of life – is
that to be measured by time? The architect who suddenly solves
the problem of how to deal with a particular situation reaching
a solution it may be in a flash – is that to be measured and
arrived at on a time basis?”
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I have also to consider not only the difficulty of the work but the
nature of the work which was done. I have to consider not only
the interviews with the authorities, but the drawings and all the
work that was necessitated in this matter. I think also I must
consider the time spent upon it; I cannot exclude that. What I
have excluded is to say that you can arrive at any figure
exclusively upon time basis, because I do not think you can. I
think you have to give credit for the amount of time that has
been spent –and apart from that one has to remember all the
time when work is carried out, you have the project in mind and
you are thinking about this, that and the other, and how best the
matter can be worked out.
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(i) xx xx
(ii) xx xx
(iii) xx xx
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(v) xx xx
(vi) xx xx
(vii) xx xx
...
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[35] In the premises, I find and hold that the applicable terms on the
Plaintiff’s remuneration are as set out under Terms and Conditions in
the Appointment Letter as follows:
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[38] It is not in dispute between the parties that the total fee payable
by the Defendant to the Plaintiff is 1.25% of the costs of works on the
whole completion of the Project. Moreover, the fee is payable
progressively in stages based on the execution of the Project as set out
in the Schedule of Payment appended as Appendix A to the
Appointment Letter.
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[43] Next, the parties are in further disagreement over the extent of
civil and structural engineering services rendered by the Plaintiff vis a
vis the stages as set out in the Schedule of Payment which is
reproduced below:
Pre-contract (50%) 10 10
A. 1) Acceptance of preliminary design
2) Submission of plans to authorities 20 30
for approval
3) Upon obtaining approval from 10 40
authorities
4) Upon completion of all drawings for 5 45
calling of tender
5 50
5) Award of Contract
B. Post-contract (50%)
1) Contract Administration and
Management 45 95
(by % of progress of works on site)
2) Issuance of Certificate of 5 100
Completion and Compliance
(CCC)
[44] The Plaintiff contended that it has completed 75% of stage A1,
75% of stage A2, 70% of stage A3 and 16.5% of stage A4. As a result,
the Plaintiff is entitled to RM328,125.00 + RM656,250.00 +
RM306,250.00 + RM36,093.75 totalling to RM1,326,718.75.
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[46] On the other side, the Defendant contended that the Plaintiff’s
civil and structural engineering services rendered were incomplete in
that none of the stages set out in the Schedule of Payment were
completed. There were some partial services performed only for
stages A1 to A4 and in particular the Plaintiff failed to submit and
obtain the necessary pre-approvals from Ikram and SYABAS as well
as submit and obtain the KSAS (Kementerian Sains dan Alam Sekitar)
approval and the Kebenaran Perancang (KM). The services definitely
have not proceeded till stage A5, B1 and B2 of the Schedule of
Payment.
[47] As the result, the Defendant had more than adequately paid the
Plaintiff to-date.
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stage A1 of the whole Project and hence entitled to full payment for
that stage.
[56] From the evidence adduced particularly from the minutes of the
client-consultant meetings, it is also clear that the Plaintiff had not
completed the other stages of the civil and structural engineering
consultancy services beyond stage A1. The Plaintiff had produced
plans and drawings as well as made submissions and liaised with
authorities to obtain approval particularly for the infrastructural
works. However, I am not convinced from the evidence adduced in the
minutes of the client-consultant meetings that the Plaintiff had
embarked on the structural drawings and plans of the building works
for submission and obtaining approval from the requisite authorities
pursuant to stage A2 and stage A3 of the Schedule of Payment. The
approvals here must necessarily include not only the KM but also
building plan approval under the Street Drainage and Building Act
1976. I was doubtful the Plaintiff had produced the structural plans
and drawings for the building works at the material time. Otherwise,
the Plaintiff would have adduced these structural plans and drawings
of the building works and/or the Plaintiff’s time sheets recorded
towards this end. None of these were produced. At the trial, the
Plaintiff candidly confirmed my doubt via SP-1 who answered my
question as follows:
[57] In the premises, I therefore find that the Plaintiff had not
substantially completed any of the other stages beyond stage A1 of
the Schedule of Payment.
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[65] In rebuttal, the Plaintiff contended that this action has been
properly and timeously instituted within the prescribed period of
limitation under the Limitation Act 1953 and referred to the case of
Muhamad Salleh bin Saarani & Anor v. Norruhadi bin Omar & Ors
[2010] 9 MLJ 603 in support of its contention.
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Conclusion
[68] For the foregoing reasons and in the absence of an offer to settle
pursuant to Order 22B of the Rules of Court 2012, I therefore enter
judgment for the Plaintiff in the sum of RM177,927.56 inclusive of
6% GST (if applicable) and interest of 5% per annum thereon from 24
October 2018 till full realization and costs of RM90,000.00 subject to
4% allocator.
COUNSEL:
For the plaintiff - Gan Chong Chieh, Prisilla Chong Mun Mun &
Wong Sue Ann; M/s Mah Weng Kwai & Associates
For the defendant - Mohd Daud Leong, Kok Pok Chin; M/s K F Ee &
Co
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Udachin Development Sdn Bhd v. Datin Peggy Taylor [1985] 1 MLJ
121
Charles Grenier Sdn Bhd v. Lau Wing Hong [1997] 1 CLJ 625
Pinsia Development Sdn Bhd & Ors v. Hj Abdul Hadi Ahmad & Ors
[2004] 2 MLRA 439
Malaysia Building Society Bhd v. Modern Crest Sdn Bhd & Ors
[2007] 2 MLJ 169
Choong Howei v. Cheah Choo Eng & Ors and Another Appeal [2018]
1 MLRA 650
Muhamad Salleh bin Saarani & Anor v. Norruhadi bin Omar & Ors
[2010] 9 MLJ 603
Low Chi Yong v. Law Chi Hong & Anor [2017] MLJU 1657
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