A Brief Introduction about FIDIC Contracts | Form of Contract
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| A Brief Introduction to FIDIC Contracts |
The NBS Contracts and Law Survey indicates that one of the areas that participants found difficult in international projects was the use of unfamiliar contract forms. This article by Koko Udom, former Head of Contacts and Law at NBS, brie/y introduces the FIDIC contracts which are reputed as the leading contracts in international engineering and construction projects.
FIDIC is a French language acronym for Fédération Internationale Des Ingénieurs-Conseils, which means the international federation of consulting engineers. It was started in 1913 by the trio of France, Belgium and Switzerland. The United Kingdom joined the Federation in 1949. FIDIC is headquartered in Switzerland and now boasts of membership from over 60 different countries.
Over the years, FIDIC has become famous for its secondary activity of producing standard form contracts for the construction and engineering industry.
FIDIC published its first contract, titled The Form of contract for works of Civil Engineering construction, in 1957. As the title indicated, this first contract was aimed at the Civil Engineering sector and it soon became known for the colour of its cover, and thus, The (old) Red Book.
It has become the tradition that FIDIC contracts are known in popular parlance by the colour of their cover.
This first contract by FIDIC was undertaken jointly with the International federation of Building and Public works. FIDIC’s concerted effort at achieving broad consultation and acceptance of its contract forms has seen subsequent editions of its contracts being ratified by the International Federation of Asian and Western Pacific Contractors Association, Associated General Contractors of America and the Inter American Federation of the Construction Industry, Multilateral Development Banks among others. Because of the broad support it enjoys, FIDIC contracts are the foremost contracts in international construction.
General features of FIDIC contracts
Although the "FIDIC" family covers a wide range of contracts, there are some common features.
Presentation
FIDIC is usually divided in two parts: Part I consisting of the general conditions and Part II concerning the conditions of particular application (including guidelines for the preparation of Part II clauses). Part I contains the general terms of the contract, such issues as rights and obligations of each party, procedure for payment, variation, certification and dispute resolution.Part II of the contract is the conditions of particular application and is to be used to introduce project specific clauses, such as language of the contract, choice of law, the name of the person or firm appointed to act as Engineer or Employers representative for the project among other terms. The Appendix usually contains sample of documents to be used for the procurement process.
In most FIDIC forms there is a default hierarchy for the documents forming the contract. The order of priority is as stated below and in the event of inconsistency the first on the list takes precedence.
1. The Contract Agreement
2. The Letter of Acceptance (this is the formal acceptance of the contractor's tender and marks the formation of the contract)
3. The Letter of Tender
4. Part II – the conditions of particular application
5. Part I – general conditions of contract
6. The Specification and Drawings (Red Book), The Employer’s Requirements (Yellow Book), the Schedules (Red and Yellow Books)
7. Further documents (if any), listed in the Contract Agreement or in the Letter of Acceptance.
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