Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)

Theoretically, contracts are inevitably incomplete. Incomplete contract (IC) is characterized by the absence of clearly defined, in its entirety, ex-ante the parties’ requirements, rights and obligations and there are gaps, missing provisions, and ambiguities in its terms. On the one hand, IC expose...

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Main Authors:	Mansor, Nur Syaimasyaza, Abdul Rashid, Khairuddin, Ayob, Mohd Fairullazi, Hasan, Sharina Farihah
Format:	Article
Language:	English English
Published:	Construction Research Institute of Malaysia (CREAM) 2020
Subjects:	K Law (General) TH Building construction TH1000 Systems of building construction TH4021 Buildings. Construction with reference to use. TX955 Building operation and maintenance
Online Access:	http://irep.iium.edu.my/65910/ http://irep.iium.edu.my/65910/ http://irep.iium.edu.my/65910/1/Implication%20Of%20Incomplete%20Contract%20%28IC%29%20In%20Malaysian%20Private%20Finance%20Initiative%20%28PFI%29%20Projects.pdf http://irep.iium.edu.my/65910/2/MCRJ%20Emails%20-%20Accepted%20for%20Publishing%2020082018.pdf

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recordtype	eprints
spelling	iium-659102018-09-27T08:11:30Z http://irep.iium.edu.my/65910/ Implication of incomplete contract (IC) Malaysian private finance initiative (PFI) Mansor, Nur Syaimasyaza Abdul Rashid, Khairuddin Ayob, Mohd Fairullazi Hasan, Sharina Farihah K Law (General) TH Building construction TH1000 Systems of building construction TH4021 Buildings. Construction with reference to use. TX955 Building operation and maintenance Theoretically, contracts are inevitably incomplete. Incomplete contract (IC) is characterized by the absence of clearly defined, in its entirety, ex-ante the parties’ requirements, rights and obligations and there are gaps, missing provisions, and ambiguities in its terms. On the one hand, IC exposes the contracting parties to the risk of opportunistic behavior, haggling, and disputes, but on the other hand, it allows flexibility to deal with uncertainty and change. Private Finance Initiative (PFI) contracts in Malaysia also cannot avoid being incomplete and there are twelve (12) clauses that contribute to the incompleteness. Literature review and two-round modified Delphi method were carried out to assess IC’s implication in Malaysian PFI concession contracts. This paper aims to report on the said assessment. The findings showed that the presence of IC in PFI projects in Malaysia causes positive and/or negative implications. Most of the positive implications mentioned on the flexibility of the incomplete clause to deal with future changes and provide the parties opportunity to renegotiate. Meanwhile, many negative implications refer to delay, disputes, and the risk of opportunistic behavior. Input from this paper will facilitate contract designers, and those involved in PFI projects in emphasizing or giving attention to the aspect that contributes to contracting incompleteness and its implications and consequently improves the provisions when drafting new contracts. Construction Research Institute of Malaysia (CREAM) 2020 Article PeerReviewed application/pdf en http://irep.iium.edu.my/65910/1/Implication%20Of%20Incomplete%20Contract%20%28IC%29%20In%20Malaysian%20Private%20Finance%20Initiative%20%28PFI%29%20Projects.pdf application/pdf en http://irep.iium.edu.my/65910/2/MCRJ%20Emails%20-%20Accepted%20for%20Publishing%2020082018.pdf Mansor, Nur Syaimasyaza and Abdul Rashid, Khairuddin and Ayob, Mohd Fairullazi and Hasan, Sharina Farihah (2020) Implication of incomplete contract (IC) Malaysian private finance initiative (PFI). Malaysian Construction Research Journal. ISSN 1985-3807 E-ISSN 2590 - 4140 (In Press) http://www.cream.my/main/index.php
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	K Law (General) TH Building construction TH1000 Systems of building construction TH4021 Buildings. Construction with reference to use. TX955 Building operation and maintenance
spellingShingle	K Law (General) TH Building construction TH1000 Systems of building construction TH4021 Buildings. Construction with reference to use. TX955 Building operation and maintenance Mansor, Nur Syaimasyaza Abdul Rashid, Khairuddin Ayob, Mohd Fairullazi Hasan, Sharina Farihah Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
description	Theoretically, contracts are inevitably incomplete. Incomplete contract (IC) is characterized by the absence of clearly defined, in its entirety, ex-ante the parties’ requirements, rights and obligations and there are gaps, missing provisions, and ambiguities in its terms. On the one hand, IC exposes the contracting parties to the risk of opportunistic behavior, haggling, and disputes, but on the other hand, it allows flexibility to deal with uncertainty and change. Private Finance Initiative (PFI) contracts in Malaysia also cannot avoid being incomplete and there are twelve (12) clauses that contribute to the incompleteness. Literature review and two-round modified Delphi method were carried out to assess IC’s implication in Malaysian PFI concession contracts. This paper aims to report on the said assessment. The findings showed that the presence of IC in PFI projects in Malaysia causes positive and/or negative implications. Most of the positive implications mentioned on the flexibility of the incomplete clause to deal with future changes and provide the parties opportunity to renegotiate. Meanwhile, many negative implications refer to delay, disputes, and the risk of opportunistic behavior. Input from this paper will facilitate contract designers, and those involved in PFI projects in emphasizing or giving attention to the aspect that contributes to contracting incompleteness and its implications and consequently improves the provisions when drafting new contracts.
format	Article
author	Mansor, Nur Syaimasyaza Abdul Rashid, Khairuddin Ayob, Mohd Fairullazi Hasan, Sharina Farihah
author_facet	Mansor, Nur Syaimasyaza Abdul Rashid, Khairuddin Ayob, Mohd Fairullazi Hasan, Sharina Farihah
author_sort	Mansor, Nur Syaimasyaza
title	Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
title_short	Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
title_full	Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
title_fullStr	Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
title_full_unstemmed	Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)
title_sort	implication of incomplete contract (ic) malaysian private finance initiative (pfi)
publisher	Construction Research Institute of Malaysia (CREAM)
publishDate	2020
url	http://irep.iium.edu.my/65910/ http://irep.iium.edu.my/65910/ http://irep.iium.edu.my/65910/1/Implication%20Of%20Incomplete%20Contract%20%28IC%29%20In%20Malaysian%20Private%20Finance%20Initiative%20%28PFI%29%20Projects.pdf http://irep.iium.edu.my/65910/2/MCRJ%20Emails%20-%20Accepted%20for%20Publishing%2020082018.pdf
first_indexed	2023-09-18T21:33:31Z
last_indexed	2023-09-18T21:33:31Z
_version_	1777412668423929856

Implication of incomplete contract (IC) Malaysian private finance initiative (PFI)

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