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Unit 2.2 Statutory Undertakings and Performance Security

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Unit 2.2 Statutory Undertakings and Performance Security

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Read the scenario.

Choose the correct answer based strictly on your text.

Check the Answer Key at the bottom to see how you scored!

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imran qalif
imran qalif
Malaysia

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Unit 2.2 Statutory Undertakings and Performance Security
 

Unit 2.2 Statutory Undertakings and Performance SecurityOnline version

Read the scenario. Choose the correct answer based strictly on your text. Check the Answer Key at the bottom to see how you scored!

by imran qalif
1

You are the Main Contractor. The Nominated Sub-Contractor (NSC) you hired used a terrible supplier for the building's waterproof membranes. The building is leaking. The NSC hands you a manufacturer's warranty document and says, "Look, the supplier guaranteed this stuff, not us. Go talk to them. We are officially off the hook." According to PAM Sub-Contract Clause 8.6, what do you tell them?

2

A foreign NSC is working on a government project under the PWD Sub-Contract. At the end of the year, they get a heavy tax bill from the Malaysian Inland Revenue Board (LHDN) on the massive profits they made. The NSC panics and sends the bill to you, the Main Contractor, claiming, "This is a local tax, so the project owner should cover it! According to PWD Sub-Contract Clause 5.2(b), who is legally responsible for this bill?

3

You are using the PWD Sub-Contract for a new hospital wing. The NSC is eager to get started and turns up on-site with trucks, bulldozers, and workers, ready to dig the foundations. You ask for their Performance Bond. They say, "Oh, our bank is still processing it. We'll give it to you in a couple of weeks, but let us start digging today so we don't fall behind schedule!" According to PWD Sub-Contract Clause 28.1, do you let them start?

Choose one or more answers

4

Mid-way through a project under the PWD Sub-Contract, a local council introduces a strict new safety certification fee that applies to the NSC's specific type of installation work. It's going to cost an extra RM 50,000. The NSC demands a "Variation Order" so they can get paid extra for this compliance cost. According to PWD Sub-Contract Clause 5.2(a), how is this handled?

5

You are reviewing the PAM Sub-Contract rules with a junior engineer. You ask them: "Why do we force the NSC to submit a Performance Bond under Clause 33.1 anyway?" What is the correct legal reason?

6

You are comparing the PAM Sub-Contract and the PWD Sub-Contract formats during a late-night study session. You notice that both contracts have a powerful financial shield built into them to make sure the Nominated Sub-Contractor (NSC) actually finishes their job and doesn't just walk away mid-project. If you look closely at PAM Clause 33.1 and PWD Clause 28.1, what is the specific financial guarantee that both standard forms require the NSC to provide?

Feedback

Clause 8.6 keeps the NSC firmly on the hook, regardless of supplier warranties

Clause 5.2(b) explicitly targets profits made in respect of the contract

A "condition precedent" means no bond = no work allowed on site, period

Clause 5.2(a) puts "sole liability" for statutory compliance costs on the NSC

It ensures the contractor has a financial safety net if the NSC fails to do their job

 
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