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A Project-Based Contract sets out specific terms for completing a defined piece of work within a set timeline and budget in Malaysia. Unlike regular employment agreements, these contracts end when the project is finished - making them popular for construction, IT development, and consulting work.

Under Malaysian contract law, these agreements must clearly outline deliverables, payment terms, and completion criteria. They offer businesses flexibility while protecting both parties through detailed scope definitions and milestone-based payments. The Employment Act 1955 doesn't typically cover these arrangements since they're considered commercial rather than employment contracts.

Use a Project-Based Contract when hiring external expertise for specific, time-bound work in Malaysia. This agreement works perfectly for website development, construction projects, research studies, or consulting assignments where you need clear start and end dates with defined deliverables.

These contracts prove especially valuable for Malaysian businesses managing multiple contractors or when working on complex projects requiring specialized skills. They help prevent scope creep, establish clear payment milestones, and protect intellectual property rights. For regulated industries like construction or technology, they ensure compliance with sector-specific requirements while maintaining project flexibility.

• Fixed-Price Project Contracts: Set a predetermined total cost, ideal for well-defined projects with clear deliverables like building renovations or software development
• Time-and-Materials Contracts: Charge based on actual hours worked plus material costs, suited for projects with uncertain scope like research or consulting
• Milestone-Based Contracts: Break payments into phases linked to specific achievements, common in construction and large-scale implementations
• Cost-Plus Contracts: Cover actual costs plus an agreed profit margin, typically used in Malaysian manufacturing or complex engineering projects
• Unit-Price Contracts: Price work by measurable units, popular in infrastructure projects and quantity-driven assignments

• Project Owners: Organizations or individuals who commission and fund the project, typically Malaysian businesses, government agencies, or property developers
• Contractors: Professional service providers, construction companies, or consultants who execute the project deliverables
• Legal Teams: In-house or external lawyers who draft and review Project-Based Contracts to ensure compliance with Malaysian law
• Project Managers: Professionals who oversee contract implementation, monitor milestones, and manage deliverables
• Finance Departments: Teams handling payment schedules, invoicing, and financial compliance throughout the project lifecycle

• Project Scope: Define clear deliverables, timelines, and quality standards for the work to be performed
• Party Details: Gather complete business information, registration numbers, and authorized signatories from all involved parties
• Payment Terms: Establish milestone-based payment schedules, pricing structure, and invoicing procedures
• Timeline Planning: Map out project phases, delivery dates, and review periods with realistic buffer zones
• Compliance Check: Review industry-specific regulations and Malaysian contract law requirements
• Risk Management: Outline dispute resolution procedures, termination clauses, and intellectual property rights

• Party Information: Full legal names, business registration numbers, and authorized representatives' details
• Project Scope: Detailed description of deliverables, specifications, and quality standards
• Payment Terms: Clear fee structure, payment schedule, and invoicing procedures
• Timeline: Project start date, completion date, and milestone deadlines
• Intellectual Property: Ownership rights of project outputs and pre-existing materials
• Termination Clauses: Conditions for contract ending and notice periods
• Dispute Resolution: Malaysian jurisdiction choice and conflict resolution procedures
• Confidentiality: Protection of sensitive information and trade secrets

Project-Based Contracts differ significantly from the more general Project Agreement in several key aspects under Malaysian law. While both documents govern project execution, their scope and application serve different purposes.

• Scope and Duration: Project-Based Contracts specifically outline deliverables with fixed end dates, while Project Agreements often cover ongoing collaborative arrangements without defined completion points
• Payment Structure: Project-Based Contracts typically use milestone-based payments tied to specific deliverables, whereas Project Agreements might involve continuous payment schedules or resource-sharing arrangements
• Legal Classification: Project-Based Contracts fall under service contracts in Malaysian law, while Project Agreements often function as framework documents that may require additional specific contracts
• Risk Allocation: Project-Based Contracts place clear performance responsibilities on the contractor, while Project Agreements often distribute risks more evenly between parties