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


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


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.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:34025

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    Cited by:

    1. 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.
    2. 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.

    More about this item


    construction industry; Malaysia; readiness; security of payment; sub-contractors;

    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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