Unit 2.2 Statutory Undertakings and Performance Security

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imran qalif

Malaysia

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Unit 2.2 Statutory Undertakings and Performance Security


Unit 2.2 Statutory Undertakings and Performance SecurityVersion en ligne Read the scenario. Choose the correct answer based strictly on your text. Check the Answer Key at the bottom to see how you scored! par 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? a Fair enough, I will call the supplier directly. Thanks for the paperwork! b Nice try. Procuring a warranty from your supplier does not relieve you of your own liabilities under this contract. c The contract says we have to split the damages 50/50 with the supplier. d 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? a The Main Contractor must pay it out of the project's contingency fund. b The project owner (the Government) must waive the tax. c The NSC has given a legal undertaking to pay all taxes imposed on profits made in respect of the contract themselves. d 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 a No. Depositing the Performance Bond is a condition precedent (a strict requirement that must happen before) to the commencement of any work. b Yes, as long as they sign a temporary note promising to deliver it later. c Yes, because saving the schedule is always the top legal priority. d 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? a The NSC must comply with all statutory requirements and accepts sole liability for all costs incurred by doing so. No extra money. b The cost is shared between the NSC and the Main Contractor. c The statutory body has to perform the compliance check for free because the contract was signed before the rule was made. d 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? a It is a fee paid to the local council for planning permission. b It is a health insurance premium for the NSC's site workers. c It acts as a financial guarantee/security for the due performance and observance of all their sub-contract obligations. d 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? a A Corporate Tax Return Form b A Performance Bond / Performance Security c A Supplier Material Warranty Document d Feedback 1 Clause 8.6 keeps the NSC firmly on the hook, regardless of supplier warranties 2 Clause 5.2(b) explicitly targets profits made in respect of the contract 3 A "condition precedent" means no bond = no work allowed on site, period 4 Clause 5.2(a) puts "sole liability" for statutory compliance costs on the NSC 5 It ensures the contractor has a financial safety net if the NSC fails to do their job

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Unit 2.2 Statutory Undertakings and Performance Security

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Créé par

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Unit 2.2 Statutory Undertakings and Performance SecurityVersion en ligne

par imran qalif

Choose one or more answers

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?

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