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Covid-19 and FIDIC contracts – what protections and entitlements?
Author: Joanne Clarke
Tags: Featured
05/22/2020
FIDIC’S Golden Principles – holding back the tide?
FIDIC is concerned about its image. It says that heavily amending the FIDIC forms of contract impacts upon the FIDIC brand and that this is damaging FIDIC’s reputation. It seeks to address this with the introduction of five Golden Principles. But the Golden Principles are merely aspirational; they are not binding and have no contractual effect. Does this render them a pointless gesture ‘trying to hold back the tide’?
Author: Victoria Tyson
Tags: Featured, golden principles
Pay attention Bond!
The recent English case Sumitomo Mitsui Banking Corporation Europe Limited v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm) highlights that where an on demand bond is assigned and a demand then made under that bond, the beneficiary will need to be sure not only that the demand is compliant with the terms of the bond but also that the assignment was effective in the first place.
Author: Joanne Clarke
Tags: Bond, construction contracts, Featured, FIDIC, guarantee, retention bond, Sumitomo
FIDIC’s Emerald Book – A contractor’s charter or optimum risk allocation?
Is FIDIC’s new Emerald Book overly contractor-biased or does it offer pragmatic risk allocation for underground works? This article compares its benefits and risk distribution with the unamended FIDIC Yellow Book, especially regarding employer risks in claim-prone areas.
Author: International Construction Team
Tags: FIDIC, FIDIC Emerald Book
Design Obligations in Design-Build Contracts – Recurring Issues
Standard form design and build contracts vary in contractor design obligations, requiring fitness for purpose or reasonable skill and care. Revisions can lead to unclear, contradictory obligations, causing recurring issues highlighted in recent cases, which Contractors and Employers should be aware of.
Author: Joanne Clarke
06/10/2019
No EOT for Concurrent Delay, if so Agreed
Contract clauses that deny a contractor entitlement to an extension of time for concurrent delays caused by both employer and contractor are valid in principle. In North Midland Building Ltd -V- Cyden Homes Ltd [1] the Court of Appeal of England and Wales has ruled that such clauses do not offend the common law prevention principle. Nor do they give rise to an implied term to prohibit the imposition of delay damages that may result.
Author: Joanne Clarke
Tags: Concurrent Delay, EOT, implied term
05/21/2019
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.
Author: Joanne Clarke
Arbitration in a Post-Brexit World
This article considers what changes might occur for UK arbitration post-Brexit. Arbitration is excluded from EU law, and the New York Convention remains unaffected. Some believe arbitration might increase due to uncertainties in enforcing court judgments in Europe post-Brexit.
Author: International Construction Team
Tags: arbitration
1999 Suite: Commentary on Clause 17 – Risk and Responsibility
Clause 17 covers risk and responsibility, indemnities, liability limitations, and intellectual property rights. The Contractor bears risk during execution and defect remedy periods, with risk transferring to the Employer upon issuing the Taking-Over Certificate. Risk allocation depends on governing law.
Author: International Construction Team
Tags: Featured
04/04/2019
1999 Suite: Commentary on Clause 08 – Commencement, Delays, and Suspension
Clause 8 covers the start of works, time for completion, delays, extensions, and suspension of works. It includes provisions for commencement, completion, progress, delay damages, and suspension, with updates from the 4th Edition Red Book.
Author: International Construction Team
Tags: Clause 8, Clause 8.1, clause 8.5, Featured, FIDIC 1999 Red Book, FIDIC 4th edition, FIDIC 4th edition of Red Book, Red Book 4th Edition, sub-clause 8.2
11/14/2018
1999 Suite: Commentary on Clause 06 – Staff and Labour
Clause 6 covers Staff and Labour, requiring the Contractor to comply with local laws, pay fair wages, provide accommodation, ensure health and safety, and maintain proper records. It also restricts recruitment from the Employer’s personnel and mandates qualified supervision.
Author: International Construction Team
Cherry Picking FIDIC 2017
Much has been said about the new Red, Yellow and Silver Books 2nd Editions launched by FIDIC in December last year. The most obvious comment has been about their size, almost 50,000 words, which is some 60% longer than the 1999 forms.
Although the 1999 forms were not perfect, most regular users seem to be agreed that they did not need 20,000 words to fix the issues. This consensus led this author to attempt to cherry-pick the good bits from the 2017 forms and to propose amendments to add the good ideas to the 1999 forms. The amendments apply to all three forms unless it is indicated otherwise.
Author: Edward Corbett
10/29/2018
Fitness for Purpose Højgaard and FIDIC’s Yellow Books
MT Højgaard is an important English case, considering fitness for purpose obligations in design-and-build contracts. This article examines the Supreme Court’s analysis of a fitness for purpose obligation in Højgaard and whether it would be applied to FIDIC’s Yellow Book contracts.
Author: Joanne Clarke
Variation Provisions in the FIDIC Yellow Book 2017
Much has already been written concerning the new FIDIC forms of contract published in December 2017. They are approximately 50 % longer and sought to set out the various procedure in much greater detail with the object of both encouraging good practice and reducing the scope for disputes. Numerous minor amendments have also been made.
The purpose of this article is to look in more detail at the provisions dealing with Variations, these being amongst the most frequently scrutinised in practice.
Author: Victoria Tyson
Tags: Featured
Unintended Consequences of the FIDIC 2017 Clause 20.1 Claims Classification System
FIDIC’s 2017 editions introduced a new Claims management system in clause 20 that channels Claims through two very different procedures. One of them is very simple and involves almost no risk whereas the other will require investment of significant project resources, will take the parties a considerable amount of time to resolve and carries fatal consequences if not followed properly. It has therefore become a priority for anyone handling this Claims management system to understand how clause 20.1 sorts the different types of Claims and to recognise that the classification scheme is not as straightforward as the wording of the Contract suggests, as explored in this article.
Author: Gabriel Mulero Clas
Tags: Featured, FIDIC, FIDIC 2017, FIDIC claims
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.
Author: Victoria Tyson
Tags: Clause 14
09/26/2018
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.
Author: Victoria Tyson
Tags: clause 3
FIDIC 1999 Upgrade Launched
Corbett & Co. has published its selection of the best bits of the FIDIC 2017 2nd Editions adapted for use with the 1999 forms. With many people put off by the 50,000+ words of the new editions, the FIDIC 1999 Upgrade will permit users to benefit from FIDIC’s new ideas and improvements.
Author: Edward Corbett
07/17/2018
2017 Suite: Commentary on Clause 21 – Disputes and Arbitration
Clause 21 introduces a standing Dispute Avoidance/Adjudication Board (DAAB) instead of an ad-hoc DAB. The DAAB is appointed at the outset, assists in dispute avoidance, and its decisions are binding. The amicable settlement period is reduced to 28 days.
Author: International Construction Team
01/27/2018
2017 Suite: Commentary on Clause 20 – Employer’s and Contractor’s Claims
The new Clause 20 distinguishes between main Claims, which follow a strict procedure, and other Claims, which are determined by the Engineer without strict procedural requirements, starting from the disagreement between parties and requiring only a Notice of Claim.
Author: Gabriel Mulero Clas
Tags: Clause 20, contractor's claims, Employer's claims, FIDIC
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.
Author: Edward Corbett
Tags: Clause 18, Clause 19, Exceptional events, FIDIC, Force Majeure, sub-clause 18.1
2017 Suite: Commentary on Clause 16 – Termination by Contractor
Clause 16 introduces new grounds for suspension and termination, including non-compliance with binding decisions and non-receipt of Commencement Date Notice. It addresses corruption, and clarifies termination grounds and procedures. Contractors gain protection against financial consequences and can claim profit loss.
Author: Victoria Tyson
Tags: clause 16
2017 Suite: Commentary on Clause 15 – Termination by Employer
Clause 15 introduces new grounds for termination: non-compliance with a binding Engineer’s Determination or DAAB decision; and maxing out Delay Damages (actual deduction not necessary). Uncertainty remains if EOT is granted post-termination, potentially affecting the legality of termination.
Author: Victoria Tyson
Tags: clause 15
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