2.2 EVIDENCE OF THE EMPLOYER ’ S FINANCIAL ARRANGEMENTS

4.2.2 Evidence of the Employer ’ s financial arrangements: Clause 2.4

Another important obligation of the Employer is to provide evidence of his

financial arrangements.

The Employer must provide reasonable evidence that financial arrange-

ments have been made and are being maintained to enable him to pay the

Contractor punctually. He must do so within 28 days after receiving any

request from the Contractor. Before making any material change to his

arrangements, he must notify the Contractor and give detailed particulars.

It is easy to see why this clause exists. In FIDIC contracts, the Employer is

protected against the Contractor ’ s default by performance and other guaran-

tees (as we saw in Section 2.5), but the Contractor does not normally have

such protections available in the event of the Employer failing to pay sums due

under the contract.

The duty to provide the Contractor with reasonable evidence that the

Employer has arrangements in place to enable him to discharge his payment

obligations gives the Contractor a measure of protection; and the contract

treats this obligation seriously. It is a ground of suspension or termination of

the contract by the Contractor if the Employer fails to provide the required

evidence (under clauses 16.1 and 16.2: see section 4.16 below ).