Security of payment regime in construction industry: are Malaysian sub-contractors ready?

Azizan Supardi, Hamimah Adnan and Mohammad Fadhil Mohammad

MPRA Paper from University Library of Munich, Germany

Abstract: In Malaysia, the particularly small sized sub-contractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act), but need to enhance their knowledge in order to improve their awareness of the benefits of the Act. Accordingly, this on-going research attempts to introduce proper guidelines to the sub-contractors, in giving the knowledge, to claim for payment. Firstly, the research explored the problems and legal issues relating to payment default in law cases and standard forms of contract. By downloading from the Malayan Law Journal, cases that indicated the issues of payment to the subcontractors, were analyzed. It is found that on its relevancy, the adjudicator shall be equipped enough with the knowledge on the issues to become a good and reliable adjudicator, as well as sub-contractors will need to enhance their knowledge on the issues of payment in order to be successful in benefitting the proposed CIPA Act. However, as long as the CIPA Act remains in proposal, the sub-contractors have to bear with the knowledge of the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment.

Keywords: construction industry; Malaysia; readiness; security of payment; sub-contractors (search for similar items in EconPapers)
JEL-codes: K12 K32 L74 (search for similar items in EconPapers)
Date: 2011, Revised 2011
New Economics Papers: this item is included in nep-cis and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in The Built & Human Environment Review 1.4(2011): pp. 122-137

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