To All Users of Malaysian Construction and Contract Law

We have noted that many visitors to the site hit the home page and then leave we assume this is because they don’t find what they are looking for. May we please request that if you’re looking for a particular subject or article that you use the search function on the main page. this is not an internet search but a simple search of the site. We don’t use false key words or CEO to attract visitors we are a small site and we pride ourselves in only providing information relevant to Construction and Contract Law thus we hope that all visitors will use the search function to find the article/download/news items which they are looking for.

Thank you we are always striving to improve and all comments are welcome.



2 responses to “To All Users of Malaysian Construction and Contract Law

  1. Would it be possible to use letter of credit (as mode of payment to contractor) in FIDIC silver/yellow book? If so, what issues should be considered?

    • A contractor may use a letter of credit to obtain finance to construct the project providing the letter of credit is acceptable to the contractors lending institution. The lending institution may require that valuations are carried out to ensure that payments/loan draw-downs reflect works and the lender may also wish to have some security over the project in the event of contractor default. As for the Contract. There are a number of issues which need to be considers such as:

      Variations: Contract needs to include that additional letters of credit need to be in place for additional cost variations otherwise no guarantee of payment.
      Payment Schedule/valuation procedure needs to be amended to reflect payment comes at end but certs/schedule relates to contractors lender. It maybe case that contract self funds in which case this should be reflected in conditions

      Termination clauses need to be addressed as do payment on in the event of termination. It is essential that and independent party conducts regular valuations agreed between the parties so that a fair value of works executed is know at all times. Letter of credit must allow for draw-down in event of early termination by either party.

      There are a number of modifications to be made but these would be on a project by project basis depending upon the agreed risk allocation between the parties.

      Hope that helps a little