Contracts Act 1950 (Act 136) & Government Contracts Act 1949 (Act 120) [As At 1st February 2024]

The Contracts Act 1950 (Act 136) and the Government Contracts Act 1949 (Act 120) are two important pieces of legislation in Malaysia that govern contractual relationships between parties.

The Contracts Act 1950 (Act 136) applies to all contracts made in Malaysia, except for contracts relating to immovable property, which are governed by the National Land Code 1965. This Act defines the essential elements of a valid contract, which include offer and acceptance, consideration, intention to create legal relations, capacity to contract, and certainty and completeness of terms. It also lays out the rules for the interpretation of contracts, performance of contractual obligations, and remedies for breach of contract, including damages and specific performance.

The Government Contracts Act 1949 (Act 120) applies to contracts entered into by the government or any of its departments, agencies, or statutory bodies. This Act lays down specific provisions for the award and administration of government contracts, including the procedures for tendering, the rights and obligations of the parties, and the remedies available in case of breach. This Act also provides for the establishment of a Contract Review Committee to review and make recommendations on government contracts.

Some of the key provisions of the Government Contracts Act 1949 include:

1. Tendering Procedures: All government contracts must be awarded through open and competitive tendering, except in certain cases where direct negotiation is allowed. The Act sets out the procedures for the preparation and submission of tenders, as well as the evaluation and awarding of contracts.

2. Rights and Obligations of the Parties: The Act lays down the rights and obligations of both the government and the contractor, including the obligations to perform the contract in accordance with its terms, to provide security for performance, and to pay or receive payment for work done.

3. Remedies for Breach: The Act provides for various remedies in case of breach of contract, including termination of the contract, forfeiture of security, recovery of damages, and specific performance.

4. Contract Review Committee: The Act establishes a Contract Review Committee to review and make recommendations on government contracts, particularly in cases where there are allegations of impropriety or irregularity.

Overall, the Contracts Act 1950 (Act 136) and the Government Contracts Act 1949 (Act 120) provide a comprehensive framework for the formation and enforcement of contracts in Malaysia, and are essential for promoting transparency, accountability, and fairness in contractual relationships.

Contracts Act 1950 (Act 136) Contains:

Contracts Act 1950 (Act 136)
Contracts (Amendment) Act 1976 (Act A329)
Government Contracts Act 1949 (Act 120)