The profile of breaches of contract in construction industry

Abstract

The doctrine of freedom to contract, as the cornerstone of contract law in the common law countries (Malaysia inclusive) has consequently generated an extensive array of contracts of various characteristics and varieties. In Malaysia, there are two basic components in the contract documents used for the contracting of most construction work that is the Contract Conditions and technical specifications and drawings. As a general principle, once a party enters into a contract, he must perform his obligations strictly according to the terms of the contract. However, in the construction industry, breaches of contract are commonplace to the point of routine. Moreover, under the complicated provisions of many construction contracts the possible breaches of contract either by contractor or employer are numerous, and in each case the general principles must be applied to determine what, if any, damage is recoverable for the breach. Therefore, the objectives of this study is to develop a profile for breaches of contract where consists the analysis of year cases, types of parties involved, standard form of contract for the project, the types of breaches of contract and the reliefs sought due to breach of contract. Limitation of this study will be on the breaches of contract cases reported by Malayan Law Journal between 1971 - 2019, cases in Malaysia and related to Building Contract only while methodology of this study will be based on the secondary data analysis. Research finding identified that the most cases of breaches of contract is in the recent year which is between 2011 - 2019. The most party involved in breaches of contract are between the employer and the main contractor. The analysis also identified that the PWD Standard Form of Contract is the most form of contract that involved in breaches of contract. The most types of breaches of contract that occurred in construction industry is abandonment of work and delay completion work. The analysis also identified that damages is the most used as a relief sought for breaches of contract. By developing this profile, hopefully it will help the project manager in handling the disputes of breaches of contract. Besides as a tool in contract management, this profile helps to prevent or minimize the breaches of contract in Malaysian construction industry.