Issues in Termination of Construction Contract: Based on Law Cases

Abstract

Construction is among the most critical and flourishing business sectors in Malaysia’s economy development. Construction sector in Malaysia has annually worth at average RM140bilion to be implemented (Dato’ Sri Fadillah, 2020). Despite acting as an important role in the economy sector, the construction industry is still facing challenges due to inefficiency and lack of understanding in contract administration between two parties, client and contractor. One of the common issues in the building industry which usually has significant repercussion for the project and the parties concerned is termination of contractor’s employment by the client. Therefore, the objective of this research is to identify the disputes or issues arising from terminating contractor’s employment. In order to achieve this objective, the research was conducted by analysing relevant court cases with content analysis method. From the analysis, it can be concluded that execution of termination shall strictly comply with the clauses as stated in conditions of the contract. It is important to handle the termination with a great caution and consideration as well as get professional advice from the experts. Failure to comply all the clauses stated in conditions of the contract may turn the termination to be considered as unlawful termination which is may release the contractor from the obligation to finish the works. This research is very important to enhance the knowledge and understanding regarding the execution of termination in construction contract. Furthermore, this research is very important and critical as a basic guideline for important role in construction industry contract especially in the context for consideration of terminating contractor’s employment.