Standard form of contract

1. Standard Forms of Contract
and Documentation
EMCM5103 TOPIC 6

2. INTRODUCTION
• A contract is an agreement between the contractor who agrees to provide a product
or deliverables and the customer or client who agrees to pay the contractor a
certain amount in return. The contractor should exercise caution not to start the
project before the contractual terms are finalised and signed by both parties.
• The offer and acceptance should match for both parties as problems might arise if
one or both parties use pre-prepared contract forms which do not exactly
correspond to the offer.
• The standard form must be considered as a non-negotiable contract if
all the terms and conditions in the contract have been set out earlier and are not
subject to further negotiations or amendments.

3. STANDARD FORMS OF CONTRACT AND
OTHER FORMS OF CONTRACT
• STANDARD FORMS OF CONTRACT
• MODIFIED FORMS OF CONTRACT
• BESPOKE OR AD HOC FORMS OF CONTRACT

4. STANDARD FORM OF CONTRACT
Standard form of contract can be defined as the basic legal framework
which identifies the rights, obligations and duties of the parties as well as
establishes the duties of the contract administrative procedures necessary for
the operationalisation of the contract.
The function of the contract form basically acts as an obligation for the
parties involved in the contract which reflects a clear scope and definite
understanding of the roles and responsibilities of personnel involved within
the context of a contract.

5. STANDARD FORMS OF CONTRACT
Standard forms of contract commonly used in Malaysia include:
(a) Form 98 issued by the Pertubuhan Arkitek Malaysia;
(b) Forms issued by the Public Works Department of Malaysia;
(c) Standard Form of Contract for Building Works issued by the Construction
Industry Development Board;
(d) Forms issued by the Institution of Engineers Malaysia;
(e) Forms issued by the International Federation of Consulting Engineers; and
(f) Forms issued by the Federation of Civil Engineering Contractors.

6. Modified Forms of Contract
• Commonly for sub-contracting and material supply areas.
• Due to unavailability of standard form forms covering subcontracting
and material supply categories especially within Malaysian practices.
• To meet local conditions and requirements by the parties especially
the client.
• Amended or modified version has to be undertaken by competent
professionals or experts with vast experience as any loopholes in the
modified version might lead to claims or disputes in the project.

7. Bespoke or Ad Hoc Forms of Contract
• This is also known as custom-made forms of contract or client-specific
forms of contract.
• Drafted version from client’s point of view/perspectives.
• Examples : KLCC Form, Putrajaya Form, KLIA Form and JKR Form DB for
design and build contracts, namely the JKR Forms 203(Rev 1/2010).
• JKR Sarawak also published their own form of contract in 2006, intended
to be used when applying traditional contracts that are based on bills of
quantities as well as drawings and specifications.

8. CATEGORIES OF STANDARD FORMS OF
CONTRACT IN MALAYSIA
The standard forms under the Malaysian practice fall under three
categories, namely:
(a) Government or public sector contracts;
(b) Private sector contracts; and
(c) International contracts.

9. Historically, the government standard forms originated from RIBA
Standard Forms of Contracts 1931 and have been drafted by various
government agencies such as JKR.
However, in recent times the Construction Industry Development
Board (CIDB) has published a standard form of its own for building
works, namely the CIDB Standard Form of Contracts for Building Works:
2000 Edition
Government Standard Forms

10. Private Standard Form of Contract
• In line with the draft and issuance of standard forms from the public sector, the
private sector also adopted and published its own standard forms led by the Malaysian
Institute of Architects or Pertubuhan Arkitek Malaysia (PAM). The forms were mainly
used for key activities such as building works.
On the other hand, for other areas of work such as engineering and infrastructures,
the standard forms of contract used were those developed by the Institution of
Engineers
Malaysia (IEM).
• For the private sector, PAM, IEM and TNB are the main developers of standard forms
of contract.
• Standard forms of contract which have been adopted from foreign countries are also
being utilised and adopted for Malaysian practices. They are the FIDIC Standard
Forms of Contract, JCT Standard Forms of Contract, ICE Standard Forms
of Contract and IEE Standard Forms of Contract.

11. International Forms vs Standard Forms
(a)Similarities between International and Malaysian Standard Forms
Contractor’s obligations whereby the contractor shall construct and complete the works as stated in the
contract as well as to bear the liabilities stated in the contract to safeguard the client or government’s interest.
(b) Differences between International and Malaysian Standard Forms PWD203A did not clearly state the provision
of the duties of government whilst the duties of the client or employer are clearly set out by the FIDIC Red
Book in Clause 2.0 (The Employer). Moreover, the employer also bears the following duties:
(i) Rights to access the site;
(ii) Permits, licences and approvals;
(iii) Personnel;
(iv) Claims; and
(v) Financial arrangements.

12. The following are brief explanations of when these forms are utilised:
(a) FIDIC
Frequently adopted if the project is being funded internationally by World Bank or Asian
Development Bank;
If the parties of the contract feels FIDIC is most suitable for the project; and
If there are no local forms available for specific application.
(b) JCT
The adoption of the Joint Contracts Tribunal (JCT) forms is not as frequent as FIDIC in
Malaysia. It is usually adopted as a result of the necessary modifications required in the
local standard forms or on the basis of bespoke forms of contract.
(c) ICE and IEE
The Institution of Civil Engineers (ICE) and the Institution of Electrical Engineers (IEE)
initiated the standard forms to address other respective areas in a project apart from
building such as engineering and electrical works.

13. Form of Contract under government/public
sector
There are various forms of contract for various contract strategies. Each form has its own
functionality and caters for a specific area in a project. Forms of contract under the government or
public sector can be divided according to the type of strategy adopted by the project as follows:
(a) JKR Standard Forms
(i) JKR Form 203A (Rev 1/2010): Conditions of Contract to be used based on the bill of quantities;
(ii) JKR Form 203 (Rev 1/2010): Conditions of Contract to be used for contract based on drawings and
specifications;
(iii) JKR Form 203N (Rev 1/2010): Used for nominated subcontractors whereby the main contract is
based upon Form JKR 203 or 203A;
(iv) JKR Form 203P (Rev 1/2010): Used for nominated suppliers whereby the main contract is based
upon Form 203A; and
(v) PWD Form DB ( Rev 1/2010).

14. Form of Contract under government/public
sector
(b) CIDB Standard Forms
(i) Contract for Building Works (2000 Edition);
(ii) Contract for Nominated Subcontractors; and
(iii) Model Terms of Construction Subcontract Work (Rev 2007).

15. Form of Contract under private sector
Forms of contract under the private sector contracts include the PAM/ISM 69 (in collaboration
with the Royal Institution of Surveyors, Malaysia), PAM 1998 Forms, PAM 2000 Forms and IEM
Forms as stated in the following:
(a) PAM Standard Forms
(i) PAM/ISM 69: Standard Form of Building Contract With Quantities;
(ii) PAM/ISM 69: Standard Form of Building Contracts Without Quantities; (iii) PAM NSC 70:
Standard Form of Contract for Nominated Subcontractors to be used with PAM/ISM 69;
(iv) The Malaysian Standard Form of Building Contract (PAM 1998 Form With Quantities);
(v) The Malaysian Standard Form of Building Contract (PAM 1998 Form Without Quantities);

16. Form of Contract under private sector
(vi) The PAM 1998 Subcontract Form (to be used for nominated subcontracts
whereby the main contract is based upon the PAM 1998 Form);
(vii) Agreements and Conditions of PAM Contract 2006 (With Quantities);
(viii) Agreements and Conditions of PAM Contract 2006 (Without Quantities);
(ix) Agreements and Conditions of the PAM Subcontract 2006.
(b) IEM Forms
(i) IEM.CD 1/89: Conditions of Contract for Works mainly of Civil Engineering
Construction;
(ii) IEM.CES 1/90: IEM Standard Conditions of Subcontract; and
(iii) IEM.ME 1/94: Conditions of Contract for Mechanical and Electrical
Works.

18. VARIOUS DOCUMENTATION RELATED TO
FORMS OF CONTRACT (INTERNATIONAL)
There are also various types of forms that have been adopted and used in Malaysia but were originally
established in foreign countries. Such forms include the FIDIC, JCT, ICE and IEE. Despite the
availability of various forms of contract issued by various government agencies and associations in
Malaysia, the emphasis and practice of using foreign-based standard forms of contract is still prevalent
especially when there are no local standard forms which can cater to a particular contract. The types
of forms that been used are as follows:
(a) FIDIC Standard Forms of Contract
(i) FIDIC Conditions of Contract for Civil Engineering Works (The Red Book);
(ii) FIDIC Conditions of Contract for Mechanical and Electrical Works (The Yellow Book);
(iii) FIDIC Conditions of Contract for Design, Build and Turnkey (The Orange Book);
(iv) FIDIC Conditions of Contract for Construction (The New Red Book);
(v) FIDIC Conditions of Contract for Plant and Design Build (The New Yellow Book);
(vi) FIDIC Conditions for EPC Turnkey Contracts (The New Silver Book); and
(vii) FIDIC Short Form of Contracts (The New Green Book).

19. VARIOUS DOCUMENTATION RELATED TO
FORMS OF CONTRACT (INTERNATIONAL)
(b) JCT Standard Forms of Contract
(i) JCT Standard Form of Building Contract (1980) and (1998 Ed.);
(ii) JCT Standard Form of Building Contract with Contractor’s Design (1981) and
(1998 Ed.);
(iii) JCT Intermediate Form of Building Contract (1984) and (1998 Ed.);
(iv) JCT Standard Form of Management Contract (1998);
(v) JCT Standard Form of Measured Term Contract (1989);
(vi) JCT Standard Fixed Fee Form of Prime Cost Contract (1967) and (1998 Ed.);
and
(vii) JCT Standard Form of Construction Management Agreement (C/CM 2002).

20. VARIOUS DOCUMENTATION RELATED TO
FORMS OF CONTRACT (INTERNATIONAL)
(c) ICE Standard Forms of Contract
(i) ICE Conditions of Contract for Works of Civil Engineering
Construction (6th Ed.);
(ii) ICE Conditions of Contract for Design and Construct (1992);
(iii) ICE Conditions of Contract for Minor Works (1995); and
(iv) ICE Conditions of Contract for Ground Investigation (1983).

21. THANK YOU