IN NEGOTIATING A CONSTRUCTION CONTRACT, THE PARTIES WILL OFTEN TAKE AS A STARTING POINT ONE OR OTHER OF THE STANDARD FORM CONTRACTS INTENDED FOR PROJECTS OF THE TYPE ON WHICH THEY ARE ENGAGED

In negotiating a construction contract, the parties will often take as a starting

point one or other of the standard form contracts intended for projects of the

type on which they are engaged. We have already seen how the FIDIC Silver

Book was introduced in order to accommodate privately-funded, fixed-

budget turnkey projects; and parties engaged on projects of that broad type

will often be inclined to use that form as the starting point for the negotiation

of contract terms. In other kinds of project, adaptations of other forms might

be used; where the employer ’ s consultant is to do all or most of the design in a

civil engineering project, for example, a form such as the FIDIC Red Book

might be used as the starting point.

Whatever the standard form used, it will nearly always need to be tailored

or adapted to the circumstances of the particular project. Executed contracts

in projects of any size nearly always contain schedules providing for the

deletion or modification of standard terms or for additional terms covering

particular aspects of the project. Some standard forms try to simplify this

process by providing alternative clauses, to be selected in light of the particular

choices or agreements reached between the parties; and even provide guid-

ance as to their use. Again, FIDIC provides a useful example of this. The

FIDIC Books provide for the parties to write particular conditions for their

contract depending on whether, for example, they wish to have a lump sum

basis of payment apply or a remeasurement basis, and give guidance on these

alternatives.

4 Contracts

In Chapter 1 of this Handbook we considered (in Section 1.1.7) the main areas

or topics which any properly-written construction contract needs to cover,

and we saw how the FIDIC contracts dealt with programme, delays and

extensions of time. These contracts also illustrate how differently risk might

be allocated between employer and contractor in international projects.

The FIDIC forms provide a useful illustration of many other features of

international construction contracts and they are probably the most widely

used of the available standard forms.

So let us now look more systematically at some of the other topics dealt

with by the FIDIC contracts, and in particular the two main FIDIC design-

build forms, the Yellow and Silver Books. They will be our focus because

design-build contracting, in which the contractor takes responsibility for all

or most of the design, is increasingly the norm in international projects.

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We will now discuss the following:

●

some key general or ‘boilerplate’ provisions in the two Books;

●

the responsibilities of the Employer and how he can make a claim against

the Contractor;

●

administration of the contract, including (in the Yellow Book) the

Engineer, his role and duties;

●

the Contractor ’ s key obligations; how the Contractor can make a claim –

and how he cannot afford to delay his initial notice of claim;

●

the Contractor ’ s design responsibility in the two Books;

●

provision for staff and labour;

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The contracts we refer to in this chapter, unless otherwise indicated, are the Yellow and

Silver Books. In fact, however, many of the terms of the Yellow and Silver Books are common

to all the FIDIC forms. All the FIDIC construction contracts can be obtained from the

FIDIC online bookshop at https://traloihay.net , either as downloads or in hard copy.

International Construction Contracts: A Handbook, First Edition. William Godwin.

© William Godwin 2013. Published 2013 by John Wiley & Sons, Ltd.

●

key provisions about plant, materials and workmanship;

●

the main time-related provisions: commencement, delays and suspension;

●

the requirements as to testing: the Employer ’ s right to test throughout the

project; the Tests on (and after) Completion;

●

the Employer ’ s Taking Over of the works and the Defects Notification

Period;

●

variations to the works and adjustments to the Contract price;

●

the key payment provisions – and what happens if payment is delayed;

●

termination and suspension of the works by the Employer, and by the

Contractor;

●

the allocation of specific risks – and the obligation to indemnify; a word

on insurance;

●

‘force majeure’ – what does it mean? And what is the effect of a (genuine)

force majeure event?

●

disputes and (in outline) the FIDIC roadmap towards resolving them.

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