What is Head Office Overheads?
The calculations of head office overheads or “extended home office overheads” have been puzzling many in the construction industry for a number of years. As we could see later in this article, case laws continue to refine and define head office overheads until today. Simplistically, Clark and Lorenzni (1997) cited “These fixed (overhead) costs include […]
Can the Contractor’s Employment be Determined or its Contract Terminated upon Substantial Completion of the Works
The construction industry is a complex industry with many parties involved in its process and operations, often brought together to work for a particular project. Due to its multi- faceted nature and involvement of numerous parties, disputes are often inevitable. One common dispute in the construction industry is the issue of ‘determination’ of the Contractor’s […]
What is Fit for Purpose and its implication
In this article, BK Entrusty aims aims to provide readers with a better understanding of the terms Fitness for Purpose and Suitability, by answering the following:-• What is Fit for Purpose?• What is the difference between Fit for Purpose and Suitability for Purpose?• Is fit for purpose and/or suitability stated in Malaysian forms of building/construction […]
Effective Risk Management – Enhancing Value in<br>Managing Projects?
“Life is uncertain, death is”. We all live in a world of uncertainties and risks, and this happens right from the very first day we were conceived. For example, we risk being born abnormal, robbed or injured, contracting diseases, involve in accidents, facing career failures, being insolvent, etc. As a matter of fact, everything we […]
When is the Contractor responsible and liable for Defects?
Entrusty continues to discuss on defects by focusing on the relevant provisions in the standard forms of building/construction contracts commonly used in Malaysia and contractual rights and remedies of the contracting parties in regard to defective works, by answering the following two sub questions:-i) What are the relevant contractual provision relating to Practical Completion and […]
What is the difference between Patent and Latent Defects?
In the construction industry, defects are common occurrences when the construction works of a building and/or civil engineering project is completed by the Contractor. Whilst most defects appear during construction and over the defects liability period as stipulated in most standard forms of construction/building contract, often there are still defects that occur after such period, […]
What is Force Majeure and can it include Price Escalation?
The construction industry is always known to be a complicated and fragmented industry, where external factors that are beyond the control of the parties involved or are independent of the construction works, can cause problems to the progress and/or cost of the work. Risk is one of these external factors that can pose significant threats […]
What are Preliminaries and how to evaluate them?
In the construction industry, Bill of Quantities (“BQ”) is a part and common feature in many tender and/or contract documents for construction projects. Traditionally, BQ is prepared by the consulting quantity surveyors (“QS”), particularly under traditional or conventional building procurement system, usually following the Standard Method of Measurement published by the Institution of Surveyors, Malaysia […]
What constitute Variations and how to evaluate them?
In almost all construction projects, changes or variations are common occurrences during the design and construction phases. It is therefore not surprising that in most construction contracts, standard forms or bespoke, the provision for a variation clause in the contract has become a standard, if not compulsory feature. In this instalment article, Entrusty will describe […]
Is the Late Payment a ground for Determination or Termination?
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, […]