Building Contract PAM (Malaysia)
BUILDING CONTRACT (PAM 2018 BASED)
Based on PAM 2018 Standard Form of Building Contract | CIPAA 2012 (Act 746) | CIDB Act 1994 (Act 520) | Contracts Act 1950 (Act 136)
THIS BUILDING CONTRACT is entered into on [Contract Date]
BETWEEN:
(1) [Employer Name] (SSM No. [Employer SSM]) of [Employer Address] (hereinafter referred to as the "Employer"); AND
(2) [Contractor Name] (SSM No. [Contractor SSM], CIDB Registration: [Contractor CIDB]) of [Contractor Address] (hereinafter referred to as the "Contractor").
RECITALS
A. The Employer desires to have the building works described in this Contract constructed at [Project Site] (the "Project").
B. The Contractor has agreed to carry out and complete the Works under the administration of the Architect, [Architect Name and LAM No.] of [Architect Firm], registered with the Board of Architects Malaysia (LAM) under the Architects Act 1967 (Act 117).
C. This Contract is based on the [PAM Form] published by the Malaysian Institute of Architects (Pertubuhan Akitek Malaysia, PAM).
1. PROJECT AND CONTRACT DOCUMENTS
1.1 Project title: [Project Title]
1.2 Project site: [Project Site]
1.3 The Contract Documents comprise: (a) these Articles of Agreement; (b) the Conditions of Contract (PAM 2018); (c) the Appendix; (d) the Drawings listed in the Schedule; (e) the Specification; and (f) the Bills of Quantities (for With Quantities version) or Schedule of Works (for Without Quantities version).
1.4 The Quantity Surveyor is [Quantity Surveyor], registered with the Board of Quantity Surveyors Malaysia (BQSM).
2. CONTRACT SUM AND PAYMENT
2.1 The Employer shall pay the Contractor the Contract Sum of [Contract Sum] for the complete execution of the Works, subject to additions and deductions in accordance with this Contract.
2.2 Interim payments are certified by the Architect under PAM 2018 Clause 30. Retention of [Retention Rate] shall be applied. Payment shall be made within [Payment Period] of the Architect's Interim Certificate.
2.3 All payment claims and disputes are governed by the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012, Act 746). Pay-when-paid clauses are void under Section 35 of CIPAA 2012. An unpaid party may refer payment disputes to adjudication at the Asian International Arbitration Centre (AIAC) — adjudication decisions are binding and enforceable as High Court orders under Section 28 of CIPAA 2012.
3. APPENDIX PARTICULARS
3.1 Date for commencement: [Commencement Date]
3.2 Date for completion: [Completion Date]
3.3 Defects liability period: [Defects Liability Period] from the date of the Architect's Certificate of Practical Completion under PAM 2018 Clause 15.
3.4 Liquidated damages: [Liquidated Damages] per calendar day of delay beyond the Completion Date (as may be extended by the Architect under PAM 2018 Clause 23). This sum is agreed as a genuine pre-estimate of the Employer's loss under Section 75 of the Contracts Act 1950.
3.5 Performance bond: [Performance Bond], to be provided by the Contractor within 14 days of the Contract Date, issued by a BNM-licensed financial institution under the Financial Services Act 2013 (Act 758).
4. VARIATIONS
4.1 The Architect may issue Architect's Instructions for variations under PAM 2018 Clause 11. All variation instructions must be in writing. The Contractor shall not carry out variations without a written Architect's Instruction.
4.2 Variations shall be valued by the Quantity Surveyor using rates in the Bills of Quantities/Schedule of Rates where applicable; otherwise, by fair valuation under PAM 2018 Clause 11.7.
5. EXTENSIONS OF TIME
5.1 The Contractor shall give written notice of any delay event and its cause within the period specified in PAM 2018 Clause 23.1. Failure to give timely notice may preclude the extension of time claim.
5.2 Relevant events entitling the Contractor to extension of time include: force majeure, exceptionally inclement weather, Employer's acts of prevention, nominated subcontractor delays, and other events specified in PAM 2018 Clause 23.8.
6. DISPUTE RESOLUTION AND GOVERNING LAW
6.1 Payment disputes shall first be referred to adjudication under CIPAA 2012 (Act 746) at the AIAC before any other proceedings.
6.2 All other disputes shall be referred to mediation under PAM 2018 Clause 34.2, and if unresolved, to arbitration or litigation under [Arbitration Rules].
6.3 This Contract is governed by Malaysian law, including the Contracts Act 1950 (Act 136), the CIDB Act 1994 (Act 520), CIPAA 2012 (Act 746), and the Architects Act 1967 (Act 117).
Employer
________________
Signature
Contractor
________________
Signature
What Is a Building Contract PAM (Malaysia)?
A Building Contract PAM in Malaysia records the terms the parties accept and the commitments each makes to the other.
The PAM 2018 form is available in two editions: With Quantities (where a bill of quantities prepared by a licensed quantity surveyor from the Board of Quantity Surveyors Malaysia, BQSM, forms part of the contract) and Without Quantities (where the contract is on a lump-sum basis). Both versions require the contractor to be registered with the Construction Industry Development Board Malaysia (CIDB) under CIDB Act 1994 (Act 520) at a grade appropriate to the contract value.
The Architect's role under the PAM 2018 form is central: the Architect issues instructions, certifies progress payments under Clause 30, grants extensions of time under Clause 23, issues the Certificate of Practical Completion under Clause 15, and acts as the initial decision-maker for disputes before adjudication. The Architect must be registered with the Board of Architects Malaysia (Lembaga Arkitek Malaysia, LAM) under the Architects Act 1967 (Act 117).
The Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) applies mandatorily to all written building contracts in Malaysia. Under CIPAA 2012, an unpaid party may issue a payment claim that triggers a statutory response timeline and, if disputed, adjudication before an AIAC-registered adjudicator. Adjudication decisions under Section 27 of CIPAA 2012 are binding and may be enforced as Kuala Lumpur High Court orders under Section 28. The prohibition on 'pay when paid' clauses in Section 35 of CIPAA 2012 applies to all PAM subcontracts.
The legal framework governing the Building Contract PAM (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Building Contract PAM (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Building Contract PAM (Malaysia)?
A PAM Building Contract in Malaysia is required for private sector building projects where an architect is appointed to administer the construction process.
A PAM Building Contract is needed when a developer or property owner engages a CIDB-registered main contractor for the construction of a residential, commercial, or industrial building. The Architect prepares drawings and specifications, administers the contract, and certifies payments, making the PAM 2018 form the appropriate vehicle.
A PAM Building Contract is required for mixed-development projects in Malaysian urban centres such as Kuala Lumpur, Petaling Jaya, or Johor Bahru, where a single main contractor is engaged to construct both residential towers and commercial podium components under unified Architect administration.
A PAM Building Contract is needed for institutional building projects commissioned by private schools, universities, hospitals, and hotels. These projects require the thorough variation, extension of time, and defects liability provisions of the PAM 2018 form to manage complex multi-trade building works.
A PAM Building Contract is required when a building employer seeks the security of a standard form that is recognised by Malaysian financiers, bankers issuing performance bonds, and insurance underwriters. Lenders financing construction in Malaysia typically require PAM 2018-compliant contracts before releasing construction drawdowns.
A PAM Building Contract is needed as the main contract sitting above nominated subcontractors for specialist works such as mechanical and electrical (M&E), lifts, façades, and fire suppression systems, where the PAM nominated subcontract form applies as a back-to-back agreement.
Parties in Malaysia should prepare a Building Contract PAM (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Building Contract PAM (Malaysia)
A PAM Building Contract for Malaysia must contain the following key elements.
Parties and Professional Team: Full legal names and CIDB registration grades of the employer and contractor, and the name and LAM registration number of the Architect administering the contract under the Architects Act 1967.
Contract Documents: The list of contract documents forming the agreement, including signed articles of agreement, conditions of contract, appendix, drawings, specification, and bills of quantities (if applicable). The hierarchy of documents determines which governs in case of conflict under PAM 2018 Clause 2.1.
Contract Sum and Appendix: The contract sum in Malaysian Ringgit (MYR), completion date, defects liability period (minimum 18 months under PAM 2018), liquidated damages rate per day or week, and performance bond amount. These particulars are set out in the PAM 2018 Appendix.
Progress Payments Under CIPAA 2012: Monthly interim payment claims submitted by the contractor, Architect certification under Clause 30, and payment within the periods required by CIPAA 2012. Payment response must be issued within 10 working days of the payment claim under CIPAA 2012 Regulations 2014.
Variations: The Architect's power to instruct variations under Clause 11, valuation of variations by the quantity surveyor, and the contractor's right to object to unreasonable variation instructions. Variations that change the scope by more than 15% may entitle the contractor to claim adjustment of the contract sum.
Extensions of Time: Relevant events entitling the contractor to an extension of time under PAM 2018 Clause 23, including exceptionally inclement weather, employer's default, nominated subcontractor delays, and force majeure. The contractor must give written notice of delay within the contractual period to preserve the extension of time claim.
Practical Completion and Defects Liability: Issuance of the Certificate of Practical Completion under Clause 15, commencement of the defects liability period, and the contractor's obligation to make good defects notified by the Architect during the defects liability period at the contractor's own cost.
Dispute Resolution: Mediation under Clause 34.2, adjudication under CIPAA 2012, and arbitration under the AIAC Arbitration Rules 2021 as the final dispute resolution mechanism.
Additional compliance elements for a Building Contract PAM (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Building Contract PAM (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/construction/building-contract-pam-malaysia
"Building Contract PAM (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/business/construction/building-contract-pam-malaysia.
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author = {{Forms Legal}},
title = {Building Contract PAM (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/construction/building-contract-pam-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
}Frequently Asked Questions
The PAM 2018 Standard Form of Building Contract, published by the Malaysian Institute of Architects (Pertubuhan Akitek Malaysia), is the standard contract form for private sector building projects in Malaysia. The JKR (Jabatan Kerja Raya / Public Works Department) standard forms — principally JKR 203 (for government building works) and JKR 203A (for construction and supply) — are used for public sector and government-funded projects. Key differences include: the PAM 2018 form appoints an Architect as contract administrator with certification powers, while JKR forms appoint a government officer (S.O.); PAM 2018 uses AIAC arbitration as the default dispute resolution mechanism, while JKR contracts use government-appointed arbitrators; and PAM 2018 incorporates CIPAA 2012 payment adjudication more comprehensively. Private developers should use PAM 2018; government agencies follow Treasury Instructions requiring JKR forms or other approved standard forms.
The defects liability period under the PAM 2018 Standard Form of Building Contract in Malaysia is the period following the Architect's Certificate of Practical Completion during which the contractor must rectify any defects, imperfections, shrinkages, or faults that appear and are attributable to the contractor's workmanship or materials. The PAM 2018 Appendix typically sets the defects liability period at 18 to 24 months, though parties may agree a longer period for complex projects. During this period, the Architect issues a schedule of defects to the contractor for rectification. If the contractor fails to rectify notified defects within a reasonable time, the employer may engage others to carry out the remedial works and deduct the cost from monies otherwise due under Clause 15.4. Upon expiry of the defects liability period and satisfactory rectification, the Architect issues the Certificate of Making Good Defects, releasing the contractor from further defect liability.
A PAM Building Contract in Malaysia commonly requires the contractor to provide a performance bond, typically in the amount of 5% of the contract sum, as security for the contractor's performance obligations. The performance bond may be issued by a licensed Malaysian bank or insurance company approved by Bank Negara Malaysia (BNM). Performance bonds in Malaysia are typically structured as on-demand bonds — meaning the employer may call on the bond without proving actual loss — or conditional bonds requiring proof of breach. The Malaysian courts have addressed the circumstances in which an on-demand performance bond call can be restrained by injunction in cases such as Bauer (M) Sdn Bhd v Government of Sarawak [2011] and Kejuruteraan Usaha Tegas Sdn Bhd v Sediabena Sdn Bhd [2012]. The PAM 2018 Appendix specifies the performance bond amount and the form of bond required, which should be consistent with the separate performance bond instrument issued by the bonding institution.
The Architect administering a PAM Building Contract in Malaysia holds several distinct contractual roles: certifier, contract administrator, and independent professional. As certifier, the Architect issues Interim Payment Certificates under PAM 2018 Clause 30, the Certificate of Practical Completion under Clause 15, and the Final Certificate under Clause 30.10. As contract administrator, the Architect issues Architect's Instructions for variations under Clause 11, extensions of time determinations under Clause 23, and postponement instructions. As independent professional, the Architect must act fairly and impartially when making certifications and determinations that affect both employer and contractor. The Kuala Lumpur High Court has held in cases applying English and Malaysian construction law principles that an Architect who acts without proper care in certification may be liable in negligence to the employer. The Architect must hold a valid LAM registration under the Architects Act 1967 (Act 117) to lawfully administer building contracts in Malaysia.
Variation claims under the PAM 2018 Standard Form of Building Contract in Malaysia are valued under Clause 11 using the following hierarchy: first, if the variation is similar to work in the bills of quantities or schedule of rates, the rates in those documents apply; second, if no similar rates exist, a fair rate is agreed between the Architect (or Quantity Surveyor) and the contractor; third, for variations that cannot be priced using existing rates, a daywork basis may be used with records submitted to the Architect within 7 days of the work being carried out. Variations must be instructed in writing by the Architect — verbal instructions do not bind the employer unless subsequently confirmed in writing. The contractor must provide advance notice of additional cost and delay implications of proposed variations under PAM 2018 Clause 11.3 to preserve the right to claim additional payment. Disputed variation valuations that involve payment are adjudicable under CIPAA 2012 (Act 746) before the Asian International Arbitration Centre (AIAC).
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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