We often hear cash flow is the lifeblood of the construction industry. Yet, late payment is an endemic feature and a root cause of many problems and disputes in the construction industry in Malaysia.
In the previous issue of Master Builders Journal, we have explained the difference between determination of employment and termination of contract, together with their respective implications. In this article, we will look into the situation where the innocent party, usually the Contractor, who contemplates whether to elect to determine its own employment or to terminate the contract when the guilty party, usually the Employer, fails to honour the Contractor’s payment within the stipulated period in the contract.
This article aims to provide an understanding of the Contractor’s rights and remedies on non or part payment, and the circumstances and conditions for determination of its own employment or termination of the contract, where applicable.