ECM 753: CONSTRUCTION LAW AND CONTRACT PROCEDURE. Introduction* DR CHE KHAIRIL IZAM CHE IBRAHIM /
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1 ECM 753: CONSTRUCTION LAW AND CONTRACT PROCEDURE Introduction* DR CHE KHAIRIL IZAM CHE IBRAHIM / chekhairil449@ppinang.uitm.edu.my IR DR SYUHAIDA ISMAIL / syuhaida.kl@utm.my / razakschool.utm.my/syuhaida 1
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3 ICE BREAKING Name Background (Academic and experience) Professional qualification From which academic institution / university / department etc. Level of knowledge/experience in law 3
4 ASSESSMENTS! 1 Test 1 x 10% 10% 2 Individual Assignment 1 x 30% 20 % 3 Group Project 1 x 20% 20 % 4 Final Examination 1 x 40% 50 % Total 100 % 4
5 Requirements for ECM774 General principle of Malaysian law by Lee Mei Pheng / Business Law by Lee Mei Pheng & Ivan Jeron Detta, Oxford Univ Press, 2009 Contracts Act 1950 (Act 136) Arbitration Act 2005 IEM Form of Contract Law dictionary 5
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10 COURSE CONTENT Part 1: Malaysian Legal System Part 2: Law of Contract Part 3: Law of Torts Part 4: Construction Contract Management 4.1 Standard Form of Contract 4.2 Legal Aspects of Standard Form 4.3 Responsibility and Liability of An Engineer 4.4 Dispute Resolution 10
11 Course Outcome 1. Understand how the legal framework involves in the construction industry. 2. Know the term of contract, right and duties, discharge of contract, remedies for breach of contract. 3. Know the nature and types of arbitration and the course. 4. Understand the construction contracts. 5. Understand the responsibilities of engineer and liability. 11
12 Lesson&Plan& Week Topics Remark Introduction to Construction Law Composition of construction law 1 7/9/15-11/9/ /9/15-18/9/ /9/15-25/9/ /9/15-2/10/15 5 5/10/15-9/10/ /10/15-16/10/15 Malaysia legal system part 1 Overview of Malaysia legal system Fundamental of Malaysian Law Malaysian common law Sources of law Malaysia legal system part 2 Composition of Malaysia legal system Malaysia court system and doctrine of stare decisis The law of contract part 1. Legally binding and enforceable construction contracts Privity of contract Conditions and warranties Standard contracts and exemption clauses The law of contract part 2. Voidable contracts. Void and illegal contracts Discharge from further performance under the contracts Remedies for breach of contract The law of tort part 1 The nature of the law of tort Trespass, nuisance and strict liability in construction. The law of tort part 2. Negligence and professional negligence. Vicarious liability. Occupier liability *CUTI HARI MALAYSIA Submission of Individual Assignment Group Project CUTI AWAL MUHARRAM 12
13 Lesson&Plan& Week Topics Remark 7 19/10/15-23/10/ /10/15-30/10/15 9 2/11/15-6/11/ /11/15-20/11/ /11/15-27/11/ /11/15-4/12/ /12/15-11/12/15 Engineering and Construction Contracts Stages in Construction Contract Administration Major Standard Forms of Construction Contracts Engineering and Construction Contracts Legal Background to Standard Forms of Construction Contracts Engineering and Construction Contracts Engineers and Consultants Engineer as a Contract Administrator Contractors and Subcontractors Engineering and Construction Contracts Dispute Avoidance, Settlement and Resolution in Engineering Projects Engineering and Construction Contracts Dispute Resolution in Engineering Projects Litigation Alternative Dispute Resolution Adjudication Arbitration Ethics, Responsibility and Liability of an Engineer Professional responsibility Legal responsibility Professional Indemnity Insurance Ethics, Responsibility and Liability of an Engineer Professional responsibility Legal responsibility Professional Indemnity Insurance PWD 203A FIDIC 1999 Red Book IEM Form of Contract PAM 2006 TEST 1 (TENTATIVE) SULTAN SELANGOR S BIRTHDAY 13
14 OVERVIEW*OF* MALAYSIA*LEGAL* SYSTEM* 14
15 What&is&Law?& A&body&of&principles&recognised&and& applied&by&the&states&in&the&administrative& of&justice& Consists&of&rules&recognised&and&acted&by& court& Enforced&by&sanctions&(punishment)& 15
16 Law&in&Malaysia&I&History& Native&legal&system&(Negrito,&Senoi&and&Malay& Aborigin)& The&Malacca&Sultanate& The&spread&of&Islam&to&South&East&Asia& The&extension&of&British&colonial& 16
17 Negrito, the ethnic groups who inhabit isolated parts of Southeast Asia Senoi, the hunter-gatherers of Peninsular (West) Malaysia 17
18 Law,&State&and&Constitution& Peninsular,&Sabah&and&Sarawak& &1&political&unit&yet& different&sets&of&law& 2&common&links:& Parliament&can&and&does&whole&country&legislation& Federal&Court&is&the&final&court&of&appeal&for&the&whole&country& Internationally,&Malaysia&is&a&state& Locally,&within&Malaysia&there&are&13&states& &each& has&a&government&and&rules& Malaysian&written&constitution&i.e.&Federal& Constitution&as&supreme&law& 18
19 19 Categories of Law Per Content Per Sources Per Enforcement Substantive Law [rights & legal power] Written Law Public Law Procedural Law Unwritten Law Private Law International Law
20 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 20
21 Written&Federal&Constitution& Supreme&law&of&the&country& Under&a&power&of&Federal&and&State&Governments& Outline&individual&rights& Can&be&changed&by&a&2/3&majority&of&the&total&legislature& Comprises&Articles&(provides&items&e.g.&name&of& federation,&religion,&liberties&(freedom),&citizenship,& election,&judiciary&power&etc)& & 21
22 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 22
23 Written&Legislation& Laws&enacted&by&a&body&constituted&for&this&purpose& In&Malaysia,&laws&are&legislated&by&Parliament& Laws&enacted&before&1957&are&known&as&Ordinances,& after&1957&are&acts& Laws&enacted&by&State&Legislative&Assemblies&(Dewan& Undangan&Negeri)&are&called&Enactments&(Sarawak& & Ordinances)& Used&as&a&mean&of&repealing,&amending,&enacting&or& codifying&the&law& 23
24 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 24
25 Written&Regulations/ Sublegislations& Any&proclamation,®ulation,&order,& notification,&byilaw&or&other&instrument&made& under&any&ordinance,&enactment&or&lawful& authority&and&having&legislative&effect& Detail&the&Parliament&and&State&legislature&to& govern&everyday&matter& 25
26 How&Malaysian&Laws& Are&Made?& Dewan&Rakyat& I&House&of& Representative& I&Lower&house& Dewan&Negara/ Senate& I&Upper&house& Parliament& I&Make&laws&by&the& passing&of&bills&in&both& Houses& 26
27 Bills& (rang&undangi undang)& Private&Bills& Hybrid&Bills& Government&Bills& Affect&particular& person,&group&or& association& Introduced&by&any& member&of& legislature&or&minister& or&deputy&minister& Affect&individual& rights& Government&policy& introduced&by& minister& 27
28 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 28
29 Unwritten&English&Law& Part&of&Malaysian&law& Sources&are&English&common&law&and&rules&of& equity& Earlier& &application&without&modification& Nowadays& &subjects&to:& Absence&of&local&statutes&(written&law&passed&by&a& legislative&body)&on&particular&subjects& Suitability&to&local&context& 29
30 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 30
31 Unwritten&Judicial&Decisions& Found&in&the&judicial&decisions&of:& High&Court& Court&of&Appeal& Federal&Court& Supreme&Court& Judicial&Committee&of&Privy&Court&(Jawatankuasa&Kehakiman)&& Advantages:& Practical&based&on&actual&experiences& Flexible&compared&to&law&enacted&by&Parliament& Rich&in&legal&detail&than&statue&law&(written&enactment&of&a&legislative& authority&that&governs&a&state,&city&or&country)& Cases&should&be&treated&in&a&similar&fashion&by&the&courts&to&ensure&justice& Disadvantages:& Greater&research&needed& Difficult&to&tell&the&statement&in&&a&judgment&is&ratio&or&dicta& 31
32 Unwritten&Judicial&Decisions& Doctrine&of& Stare&Decisis /judicial&precedent&& Sources&of&law&where&past!decisions!of!the!judges!create!law!for!future! judges!to!follow! Also&known&as&case!law,&which&is&one&of&the&primary!sources!of!English! law&and&malaysian&law& Create&certainty!of!outcome&for&future!case&and&scope&for&the&common& law&to&be&modified&and&updated& Way&of&operation:& Vertical& &bound&by&the&prior&decisions&of&a&higher&court& Horizontal& &bound&by&their&own&prior&decisions&and&prior&decisions&of&a&court&of&the& same&level& 32
33 Public Prosecutor v Datuk Tan Cheng Swee [1980] 2 MLJ 276, 277 Datuk&Tan&Cheng&Swee,& was& to& be& the& Commissioner& of& the& Malacca& Municipality&The& Committee&was&advisory&in&nature,&hence&he&was&acting¬&on&any&majority&decision&but& under&his&own&powers&as&the&sole&commissioner.&the&responsibility&was&at&all×&his& and&his&alone.&datuk&tan&was&at&the&same&time&the&executive&chairman&and&a&shareholder,& holding& by& himself& and& through& members& of& his& family& a& 20%& interest,& in& a& housing& development&almac&which&planned&to&develop&a&land.&the&2nd&respondent&was&also&a& shareholder&but&he&was¬&a&director.&almac&submitted&building&plans&for&the&approval&of& the&municipal&council,&in&other&words,&datuk&tan&himself.&datuk&tan&was¬&present&at& any& of& the& meetings& of& the& Committee& but& he& passed& the& plans.&the& charges& against& Datuk&Tan&are&therefore&related&to&approval&of&these&plans,&where&Datuk&Tan&had&used&his& public& office& for& his& pecuniary& advantage& and& had& thereby& committed& offences& against& section&2(1)&of&the&emergency&(essential&powers)&ordinance&no.&22&of&1970&& It is however necessary to reaffirm the doctrine of stare decisis which the Federal Court accepts unreservedly and which it expects the High Court and other inferior courts in a common law system to follow similarly Clearly the principle of stare decisis requires more than lip-service. Chang Min Tat F.J. 33
34 Other Malaysian Cases to Ponder 1. Kumpulan Perangsang Selangor v Zaid Bin Haji Mohd Noh [1997] 1 MLJ 789, Alkaff*v.*Governor@in@Council*&*Ors-[1931]&MLJ&Rep.&202& 3. Public*Prosecutor*v.*Lau*Tuck*Weng*[1988]&3&MLJ&217& 4. Majlis!Perbandaran!Pulau!Pinang!v.!Sykt.!Berkerjasama@sama!Serbaguna!Sungai! Gelugor&[1999]&3&MLJ&1& 5. Mohamed!Ezam!bin!Mohd!Nor!&!4!Ors!v.!Ketua!Polis!Negara![2002]&1&MLJ&321& 6. Public!Prosecutor!v.!Datuk!Tan!Cheng!Swee!&!Anor&[1980]&2&MLJ&277& 7. Periasamy!s/o!Sinnapan!&!Anor!v.!Public!Prosecutor&[1996]&2&MLJ&557& 8. Allied! Capital! Sdn.! Bhd.! v.! Mohamed! Latiff! bin!shah!mohd! and!another! Application&[2001]&2&MLJ&305& 34
35 Unwritten&Judicial&Decisions& Sources of unwritten judicial decisions in Malaysia: Malaysia Law Journal [MLJ] Current law Journal [CLJ] All Malaysia Reports [AMR] Even so, there is no official body to produce reports (Harbans Singh, 2005). 35
36 Unwritten&Judicial&Decisions& Type of unwritten judicial decisions: Ratio decidendi - The judge is likely to give a summary of the facts, review the arguments and explain the principles of law he is using to come to the decision, which creates a precedent. Obiter dicta - Judges in future cases do not have to follow it. Referred to speculation on what his decision would have been if the facts of the case had been different. Binding precedent - Judgement from previous case which must be followed even if the judge in the later case does not agree with the legal principle. Created when the facts of the second case are similar to the original case and the decision was made by a court which is higher to (or same level) in the later case. 36
37 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 37
38 Unwritten&Customary&Laws& West&Malaysia&Customary&Laws& UndangIUndang&Adat&Melayu& &tradition& elements:& UndangIUndang&Adat&Melayu&Purba&i.e.&Adat&Pepatih& and&adat&temenggung& UndangIUndang&Hindu& Dharmasutra&I&manuals&of&human&conduct& that&form&the&earliest&source&of&hindu&law& Dharmasastra&I&poetic& 38
39 Sources&of& Malaysian&Law& Written& Unwritten& Federal&and& State& Constitution& Legislations& Regulations/ Sublegislations& Principle& English&Law& Judicial& decisions& Customary& law/way&of&life& Islamic&law& 39
40 Unwritten&Islamic&Law& Applied&to&Muslim,®ardless&of&race& Extends&to&family&matters&and&inheritance& Administrates&by&Syariah&Courts&(Islamic&courts)& at&state&and&in&federal&territories&of&kl&and& Labuan& 40
41 Organisation&of&Civil&Court& Hear and determine by Ruler of YDPA Syariah Court Syariah Court Native Court 41
42 The&Malaysian&Judiciary& Federal&Court& To&the&exclusion&of&any&other&court& Determine&validity&of&law&made&by&Parliament/State& Exclusive&jurisdiction&to&determine&dispute&between&States&and&Federal& Ultimate&court&in&civil,&criminal&and&constitutional&matters& Court&of&Appeal& With&appellate&jurisdiction&to&hear&civil&and&criminal&cases&of&High&or&Session&Courts& High&Court& Criminal& &cases&which&carry&death&penalty& Civil& &cases&of&divorce,&admiralty&(maritime&law),&bankruptcy&and&company&matter& Session&Court& Criminal& &all&offences&other&than&offences&punishable&with&death& Civil&Cases& Magistrates &Court& Criminal&cases& Civil&cases& 42
43 Thank You 43
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