FIDIC 2022 Reprints: 10 Key Areas Of Change In The FIDIC Red Book 2017

FIDIC ‘launched’ the FIDIC 2022 reprints at the FIDIC International Construction Users’ Conference 2022, in London. The reception to the changes was mixed – some embraced the clarity; others questioned the significance and cost. This article draws your attention to 10 of the key areas of change in respect of the FIDIC Red Book 2017 including the definition of Claim, matters to be agreed or determined, the definition of Dispute and Exceptional Events.

By |18/01/2023|Design, Dispute Boards, featured, FIDIC, Knowledge Hub|Comments Off on FIDIC 2022 Reprints: 10 Key Areas Of Change In The FIDIC Red Book 2017

1999 Suite: Commentary on Clause 13.8 – Variations: Adjustments for Changes in Cost

Employers avoid paying more under existing contracts, but forcing unprofitable work risks contractor insolvency. Contractors now seek protection from price fluctuations, preferring short projects or cost-plus letters of intent. Cost adjustment mechanisms, like FIDIC 1999 Sub-Clause 13.8, may help.

By |30/08/2022|Commentaries on the 1999 Suite, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 13.8 – Variations: Adjustments for Changes in Cost

Price escalation and FIDIC: is Force Majeure an answer?

Could provisions in FIDIC contracts giving relief for ‘Force Majeure’ or ‘Exceptional Events’ provide relief to contractors suffering as a result of price escalation? It is well documented that construction and engineering projects around the globe are being affected by extreme and sometimes unprecedented price escalation. This is for many reasons including the Covid-19 pandemic and the Russo-Ukrainian conflict.

By |30/08/2022|Cost, featured, Knowledge Hub|Comments Off on Price escalation and FIDIC: is Force Majeure an answer?

FIDIC Changes in Legislation and Covid-19: Compelled by Law or Just Doing Your Job?

Up until the spring of 2020, a FIDIC 1999 Sub-Clause 13.7 [Adjustments for Changes in Legislation][1] claim was just one of many issues to be resolved, for example, in a delay and disruption claim or a Cost claim. However, the focus it receives in the context of Covid-19 is drastically different. Many in the industry are using the changes in legislation provision to seek financial compensation in a situation that would otherwise potentially only attract an extension of time.[2] Awarding Cost for Covid-19 events regardless of the circumstances may seem to some (Contractors mostly, though there are Employers and Engineers who agree) like the appropriate thing to do, but whether it is correct according to the Contract is a different question.

By |23/09/2021|Covid, Delay, featured, FIDIC, Knowledge Hub|Comments Off on FIDIC Changes in Legislation and Covid-19: Compelled by Law or Just Doing Your Job?

FIDIC contracts – What protection do they give contractors for employer financial problems?

In all construction contracts, one of the central principles is the Employer’s obligation to pay the contract price. The Contractor will be wary about the Employer’s financial standing and ability to pay and concerned to ensure that payments are made on time and that effective remedies are available in case of late or non-payment. The FIDIC standard forms of contract contain provisions dealing with these aspects.

By |21/05/2019|Dispute Boards, featured, Knowledge Hub|Comments Off on FIDIC contracts – What protection do they give contractors for employer financial problems?

1999 Suite: Commentary on Clause 14 – Contract Price and Payment

Clause 14 covers payment aspects, including interim and final certificates, advance payments, retention monies, and the cessation of the Employer’s liability. It outlines the process for monthly payment applications, final settlement, and the Contractor's rights if payments are delayed.

By |26/09/2018|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 14 – Contract Price and Payment

1999 Suite: Commentary on Clause 03 – The Engineer

Clause 3 outlines the Engineer's duties and obligations, including acting for the Employer, delegating authority (but not Determinations), issuing instructions, and handling Variations. It also covers Engineer replacement and making fair Determinations after consulting both Parties.

By |26/09/2018|Commentaries on the 1999 Suite, Dispute Boards, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 03 – The Engineer

2017 Suite: Commentary on Clause 18 – Exceptional Events

Clause 18 replaces "Force Majeure" with "Exceptional Events," aiming for clarity in civil law jurisdictions. Strikes and lockouts are now distinct from riots. The clause maintains natural catastrophes and clarifies that invoking it results in contract termination.

By |27/01/2018|Commentaries on the 2017 Suite, Knowledge Hub|Comments Off on 2017 Suite: Commentary on Clause 18 – Exceptional Events

2017 Suite: Commentary on Clause 09 – Tests on Completion

Contractors must prepare a detailed test programme reviewed by the Engineer. Clause 9.2 addresses delayed tests, applying Clause 10.3 for undue delays. Clause 9.2 adds procedures, including three Notices. Clause 9.4 expands failure criteria to include section rejection, complicating recovery under Clause 13.3.1.

By |27/01/2018|Commentaries on the 2017 Suite, Knowledge Hub|Comments Off on 2017 Suite: Commentary on Clause 09 – Tests on Completion

1999 Suite: Commentary on Clause 19 – Force Majeure

Clause 19 covers Force Majeure and release from performance, with broader definitions than typical laws. It prescribes detailed insurance requirements, reducing flexibility. The Contractor bears most obligations, necessitating careful amendments and professional advice to avoid misunderstandings and ensure proper incorporation into contracts.

By |28/09/2017|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 19 – Force Majeure

1999 Suite: Commentary on Clause 15 – Termination by Employer

Clause 15 covers Termination by the Employer, including notices to correct, grounds for termination, valuation at termination, payment after termination, and the Employer's entitlement to terminate at will with 28 days' notice.

By |10/05/2017|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 15 – Termination by Employer

1999 Suite: Commentary on Clause 05 – Nominated Subcontractors

Clause 5 defines a "nominated Sub-Contractor" and allows the Contractor to object on reasonable grounds. If the Employer insists on employing the Sub-Contractor, it must indemnify the Contractor. Payments to the Sub-Contractor are certified by the Engineer.

By |01/08/2016|Commentaries on the 1999 Suite, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 05 – Nominated Subcontractors

Frozen Out

What relief does FIDIC provide when bank accounts are frozen as a result of war, hostilities, rebellion, terrorism etc.? Maybe not as much as you think. Tensions in Africa and the Middle East have seen the implementation of numerous international financial sanctions. While these sanction regimes vary in execution and enforcement they often freeze assets and prevent financial transactions. These restrictions may impact on the Employer’s performance of its payment obligations under the Contract. This can have serious consequences where the Contractor is entitled to suspend or terminate on notice for non-payment. Many parties automatically assume that financial sanctions will be recognised as force majeure. However, this may not be the case.

By |16/12/2015|Knowledge Hub|Comments Off on Frozen Out

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