Procedure and Effects of Delayed Possession of Site under PAM 2006

Where the Employer fails to give possession of the site to the Contractor on or before the date stated within the Contract, it is a breach of contract and, if the failure to give possession continues for any significant time, it will be a material of the contract. This is because without possession of the site the contractor cannot execute the Works under the contract. All standard forms of contract used in Malaysia including PAM 2006, provide for a specific date for possession of the site. Failure to give possession of the site is a breach not only of the express terms of a contract but also a breach of a term that would be implied at common law in the absence of such an express term.

As a result of the Employers default in giving possession of site being a material breach of the contract, a protracted failure by the Employer to give possession of site, and any subsequent acceptance by the Contractor of the Employer’s breach, may entitle the Contractor to accept the repudiation and to commence an action for damages, which could include the loss of the profit that it would otherwise have earned. (See Wraight Ltd v PH&T Holdings Ltd [1968]). In Malaysia most Contractors would balk at taking such drastic action, but they may claim damages at common law for any loss actually incurred. (more)

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