STANDARD FORMS OF

CONSTRUCTION CONTRACTS

Dr Zulhabri Ismail MCIArb MIEEE

Dr Zulhabri Ismail MCIArb MIEEE 1

Synopsis
This lecture will discuss the following:-

Standard forms of construction contracts,

advantages and disadvantages?

Introduction to international contracting.

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The Rule of Thumb
All standard forms of contracts [express] must
be read and construed together with
common law principles [implied] and the
statutory provisions.

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Forms of Contracts
Standard forms
Model forms
Modified forms
Ad hoc [because of situation / not planned in
advance]
Bespoke [special made / according to needs
of individual project]

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Procurement
Contract Types based on Method of Contract
Procurement (Harbans Singh, 2004):-
Traditional General Contracts
Management Contracts
Construction Management Contracts
Package Deal / Turnkey Contracts
Build Operate and Transfer [BOT]
Contracts; and
New Type of Contracts [i.e. PFI]
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What is standard forms?
These are in a printed form and published
by an authoritative body of the industry,
which body is recognised by both parties;

The form set out the terms or conditions

on which the contract between the
parties are to be carried out;
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What is standard forms? (contd)
These terms or conditions are deemed to
be agreed and are not subject to further
negotiation and/or amendment; and

The terms or conditions are generally

suitable for a wide range of common
projects or works.
(Harbans Singh, 2004)
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Government / Public Sector
Public Works Department
PWD Form 203A (Rev 2007)
without quantities.
with quantities.

PWD Form 203N for Nominated Sub-

Contractors.

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Government / Public Sector
Public Works Department (contd)
PWD Form 203P for Nominated Suppliers.

PWD Form DB/T for Design and Build

Turnkey Contracts.

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Government / Public Sector (contd)
Construction Industry Development Board
CIDB Form for Building Contracts 2000
Edition.

Standard Proforma for Contract

Administration (For use in conjunction with
The CIDB Standard Form of Contract for
Building Works).

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Government / Public Sector (contd)
CIDB Standard Form of Sub-contract For
Nominated Sub-Contractor [Form CIDB.B
(NSC) / 2002] (To complement the Standard
Form of Contract for Building Works).

Model Terms of Construction Contract for

Subcontract Work (2006) [CIDB / CICC].

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Model Terms of Construction
Contract for Subcontract Work.
Intended to be used as part of a generally stand
alone subcontract and not back to back to
any one main contract.
The generic drafting style and flexibility mean it
can be used as subcontract terms with any
main contract whether a one-off contract
(bespoke & ad hoc) or published standard
form such as the PWD, PAM, IEM, CIDB,
FIDIC or JCT contracts.
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CIDB Forms
CIDB published its own version of Standard
Forms for building works (main contract and
sub contract). But the question is do we need
another public sector standard form?

There is presumption that CIDB will replace

PWD Standard Forms?

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Private Sector
PAM
PAM 2006 (previously 1998) with quantities.

PAM 2006 without quantities.

PAM NSC 2006 to be used for NSC where

the main contract is based upon the above.

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PAM 1998
Usage
Essentially for
1. Private sector projects

2. Building works

3. Contracts undertaken through Traditional

General Contracting Procurement

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Private Sector
Civil Engineering works
IEM Condition IEM.CE 1/89. Mainly for
Civil Engineering Construction (Second
Reprint 1994).
IEM Condition IEM.CES 1/90. Sub-contract
for use in conjunction with the IEM Condition
(First Reprint 1994).

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Private Sector
M&E works
IEM Condition IEM.ME. For mechanical and
electrical work (First Edition 1994).
Sub contract? [absent]

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IEM Forms
Usage
Private sector projects.

Civil engineering, Mechanical and Electrical

works.
Procured under the Traditional General
Contracting.

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Why standard forms?
According to Nayagam and Pathmavathy (2005),
Standard Form construction contracts
provide a basic legal framework identifying
the rights, obligations and duties of the
parties, establish the ambit of the powers and
duties of the contract administrator.

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Why standard forms?
Most construction professionals are familiar
with their operation, limitations and drawback.
Such familiarity leads to administrative and cost
efficiency.
As there is a body of judicial pronouncement
accumulated over the years on standard forms,
there is some certainty in meaning.
Savings in time and costs when standard forms
are used compared to the costs of drawing up
fresh contracts.
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Why standard terms of Contract?
(CICC, 2006)
It becomes more economical as there is no
need to draft new terms of contract every
time a contract is let out.
It provides more certainty when tendering
[equal bargaining power].
Familiarity makes it easier and quicker to be
priced.

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Why standard terms of Contract?
(CICC, 2006)
It creates the possibility of a more balanced
allocation of risk between the contracting
parties.
There is a higher chance of avoiding
unwarranted disputes in court or arbitration.

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Advantages
The forms have been arrived at through a process of
negotiation between the various sectors of the
industry and as a result act as a compromise
between the various powerful interest group.

They have been widely adopted because experience

has shown that they facilitate the conduct of
trade (Schroeder Music Publishing Co v
Macaulay [1974] 1 WLR 1308) and have
addressed the common pitfalls and shortcomings.
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Advantages (contd)
The forms satisfy the equitable principle
requiring that similar projects demand
similar contracts (Murdoch and Hughes,
2000).

Fair risk allocation to all the parties (Murdoch

and Hughes, 2000).

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Advantages (contd)
Most such forms are time tested and
practitioners are aware of their workability,
limitations and drawbacks. This familiarity
leads to administrative and cost efficiency and
minimises possible claims and disputes.

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International Standard Contracts
FIDIC family
JCT Family
ECC
ICE
IEEE
IMechE
PPC 2000
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Conclusion

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Thank You

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