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Contractors can claim for reimbursement due to force majeure

Koon Yew Yin 23 July 2021 

My sole purpose of writing this article is help construction contractors to recover some of their losses due to the mandatory MCO, workers cannot go to work. 

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As I was the Secretary General of the Master Builders Association, Malaysia for 9 years before, I am well versed with the construction contract laws and the general conditions of contract. 

What is force majeure? Force majeure is unforeseeable circumstances that prevent contactors from fulfilling a contract.

The Covid 19 pandemic is an unprecedented global crisis. The performance of contractual obligations has become very difficult, if not impossible for construction contractors. Contractors can claim for reimbursement for losses under force majeure clause in the conditions of contact. 

Contractors can claim the followings:

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1. More time to complete the contract due to the delay caused by mandatory MCO, workers cannot go to work.  

2. During the delay, contractors suffer losses. Contractors can claim for reimbursement of establishment expenses, staff salaries, depreciation of construction equipment, bank interest for bank loan etc.  

3. Contractors can also claim for rate increase due to the price increases of building materials. For example, workers cannot go to work for steel companies to make steel and steel products. As a result, the prices for all steel and steel products have gone up.  

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