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The adequacy of Malaysian security of payment legislation for sub-contractors in construction industry

Author

Listed:
  • Supardi, Azizan
  • Adnan, Hamimah
  • Mohammad, Mohammad Fadhil

Abstract

In Malaysia, the particularly small sized subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, they need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the Act. Due to this, this on-going research attempts to introduce payment framework to the sub-contractors, in giving the knowledge, to claim for payment. This paper, though, is to disclose the finding of the level of knowledge that the sub-contractors have to the proposed Act, by preliminary analyzing the quantitative questionnaire survey. It was found that the adequacy of security of payment framework to the particularly small sized sub-contractors needs to be produced, and the analysis on effectiveness of the various avenues incorporated in the construction contract or statutes in the other developed countries as well as the proposed Act needs to be done. However, as long as the regime remains in proposal, the sub-contractors have to bear with 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.

Suggested Citation

  • Supardi, Azizan & Adnan, Hamimah & Mohammad, Mohammad Fadhil, 2011. "The adequacy of Malaysian security of payment legislation for sub-contractors in construction industry," MPRA Paper 34013, University Library of Munich, Germany, revised 05 Jul 2011.
    • Handle: RePEc:pra:mprapa:34013
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    File URL: https://mpra.ub.uni-muenchen.de/34013/1/MPRA_paper_34013.pdf
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    References listed on IDEAS

    as
    1. Supardi, Azizan & Adnan, Hamimah & Mohammad, Mohammad Fadhil, 2010. "Sub-Contractors’ readiness on the Malaysian security of payment legislation in construction industry," MPRA Paper 34010, University Library of Munich, Germany, revised 16 Nov 2010.
    2. Supardi, Azizan & Yaakob, Jamaluddin & Adnan, Hamimah, 2009. "Performance bond: conditional or unconditional," MPRA Paper 34007, University Library of Munich, Germany, revised 2009.
    3. Supardi, Azizan & Adnan, Hamimah & Mohammad, Mohammad Fadhil, 2011. "Security of payment regime in construction industry: are Malaysian sub-contractors ready?," MPRA Paper 34025, University Library of Munich, Germany, revised 2011.
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    Cited by:

    1. Supardi, Azizan & Adnan, Hamimah, 2011. "Security of payment in Malaysian construction industry: issues on sub-contract's direct payment," MPRA Paper 34023, University Library of Munich, Germany, revised 26 Aug 2011.

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    1. Supardi, Azizan & Adnan, Hamimah, 2011. "Security of payment in Malaysian construction industry: issues on sub-contract's direct payment," MPRA Paper 34023, University Library of Munich, Germany, revised 26 Aug 2011.
    2. Supardi, Azizan & Adnan, Hamimah & Mohammad, Mohammad Fadhil, 2011. "Security of payment regime in construction industry: are Malaysian sub-contractors ready?," MPRA Paper 34025, University Library of Munich, Germany, revised 2011.

    More about this item

    Keywords

    legal readiness; Malaysia; sub-contractors; security of payment; construction industry;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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