The Contract Weakness in Provisions and Suggestions to Instruction's Efficiency

The administration of construction contracts in Malaysia is facilitated through a standard form of contract. In the private sector, 90 percent of the building contracts implemented is based on the Pertubuhan Akitek Malaysia (PAM) Standards form of contract (Sundra, 2010). Generally, each standard form of contract aims at ensuring effective, efficient and non-disputable contract administration. However, construction contract can be considered as a source of construction dispute in the event of misunderstanding and ignorance of the contract clauses. Mentioned by a Quantity Surveyor that the period for every actions to be taken is stated in the contract. Despite the fact, the mentioned date is not applied by the real practitioners as there is a dogma on the Architect’s side which they think that it is preferable for the works to be delayed but it is otherwise on the Contractor point of view. This is an overlapping understanding between two parties which will cause delay to the project. Regardless of that, every Work shall be executed as soon as the instructions are issued in accordance with the work programme.

Based on Sr. Maslinda Hussin, Clause 30.2 deals with the issue of storage of purchased materials and goods by the contractor to operate the works. Equipments and machineries such as the lift car are normally delivered to the site on the day of installation (of a particular work). The payment for the rental/purchase of the equipment is paid by the contractor before they are delivered to the site. However, these items cannot be certified in the payment for off-site materials which might burden the contractor. Be that as it may, some clients allow for them to be paid as off-site materials, provided that the contractor issues an undertaking letter stating that the off-site materials are rented or purchased for that particular project and that they are insured and physically protected.

Besides, clarity or the lack of it is one of the main reasons why some disputes are submitted to the courts as conflicts lies on the clarity of the condition of the contract. Clarity has been defined as “can be simply seen or heard, easily understood, not confusing, clear and precise”. As per Clause 24.0, the period of time on the claim for loss and expense is somewhat blurry (Hussaini Senusi ). The current provision on the mentioned issue is very indistinct wherein there is no fixed period for the approval of claims by contractor. Hence, the duration for the approval itself could be tedious and eventually affect the contractor. This is due to the continuation between the claim and final account as the payment could not be issued if the claim issue is not resolved. If the contractor were to take risk, he would suffer loss as there are costs that come with it.

Other than that, there is an uncertainty on the form of issuance of Architect’s Instruction (AI). An electronic instruction is not confirmed to be considered as valid or invalid. Both Quantity Surveyors from two different companies agreed that a registered mail delivered via the Internet can be taken as a valid instruction for the Contractor. On the other hand, the Architects disagree with the electronic nature of letter, owing to the fact that it is not handed physically to the contractor, thus it cannot be viewed as a writing letter. In the PAM2018 Contract clearly stated that the AI has to be in written form (Clause 2.2).

The contract weakness also covers the time frame and the overall impact of the contract towards the Contractor. Some Architects are less educated and is unaware of the impact of the issuance of the AI towards the Work programme in which the designers do not think through about the practicability of the given amendment towards the time and costs that prompt by the instruction. They shall seek the client’s consent before issuing any AI to the contractor whereby it is not stated clearly in the contract. Furthermore, AI could not be withdrawn, therefore, disputes will arise among the client and the Architect if the client is not willing to pay for any amendment or any additional cost of the works instructed by the Architect without their consent.

Knowing the fact that PAM2018 has always been biased towards the Architect, consequently the Architect firms find that the contract form is very convenient and practical to become a set of guidelines for the rights of the Architects in performing their obligations. Although the new updated version of the contract has not been widely used in the construction industry in Malaysia, the provisions of AI are in good conditions as it protect the architect’s interests and have been revised regularly by the Board of Architect Malaysia for any improvement of clauses. The contract is likewise straight forward and lesser usage of ambiguous words, hence it could be understood by any involved parties. In addition, the challenges that industry players face and promote inclusivity as well as fairness have been addressed in the updated version of PAM Contract 2018 (Ezumi).