Extension of time under the PAM and IEM standard form contracts

The circumstances allowing a contractor to apply for extension of time to complete his Works vary depending on the contract. In this article, we look at the events allowing an application for extension of time in two main standard form contracts in Malaysia, namely the PAM and the IEM contracts.

Permitted extension of time under PAM Permitted extension of time under IEM
  • force majeure
  • exceptionally inclement weather
  • loss and/or damage occasioned by insurance-related contingencies
  • civil commotion, strike or lockout
  • delay in receiving Architect’s Instructions
  • delay in getting possession to site
  • compliance with Architect’s Instruction due to document discrepancy, variation or suspension of works
  • delay on part of Nominated Sub-Contractors
  • re-nomination of Nominated Sub-Contractors
  • delay on part of other contractors appointed by employer for works not part of the Contract
  • delay by employer to supply goods agreed to be supplied
  • opening up for inspection of any covered up work
  • any breach of contract by Employer
  • war damage
  • discovery of antiquities
  • changes to law
  • delay by Appropriate Authority affecting Contractor’s work
  • appointment of replacements
  • compliance with Architect’s Instructions in re disputed with neighbouring owners
  • delay due to Architect’s revision of provisional quantity
  • failure of Employer to give entry or exit from Site
  • proper suspension by Contractor of his obligations
  • suspension of Works by an Appropriate Authority
  • any other ground of extension expressly stated in the Contract
  • Engineer’s instructions by reason of dispute with neighbouring property owners
  • Contractor not receiving necessary instructions or drawings from the Engineer
  • delay in giving possession of Site
  • delay by other workers engaged by Employer for works not forming part of the Contract

 

It can be seen that the PAM Contract has a more exhaustive list of incidents which would allow an extension of time to be granted. Very interestingly, delay on the part of nominated sub-contractors would constitute a delay for which an extension of time can be sought under the PAM Contract (but not under the IEM Contract).

Having a more exhaustive list would naturally favour the contractor who would have more grounds to rely upon in any application for extension of time. However, the more exhaustive list under the PAM Contract also contains instances which would be more discretionary by nature (for example, allegations of breach of contract by the Employer). This gives the contract administrator both a greater scope to exercise his powers, as well as a greater obligation to ensure that his decisions are made fairly and reasonably for both the contractor and the employer.

If the contract administrator makes a decision that is deemed to be unfair or unreasonable, that decision can be challenged and nullified. In that sense, the contract administrator would have to be careful because he can be subject to liabilities under contract and/or tort for his exercise of his duties.

Kheng Hoe Advocates

Building contract and construction contract dispute lawyers

PS: If you have any building contract and construction contract related issues, I invite you to take advantage of my free one-to-one consultation to explore your next steps. There is totally no obligation on your part, and regardless whether you engage me or not, I guarantee that you will walk away with a clear idea as to where your case stands and how to take your case forward. To schedule an appointment, e-mail me with a brief description of your issue at khenghoe@khenghoe.com.