FIDIC contracts 2017—termination by the Employer
Produced in partnership with Victoria Tyson of Corbett & Co

The following Construction practice note produced in partnership with Victoria Tyson of Corbett & Co provides comprehensive and up to date legal information covering:

  • FIDIC contracts 2017—termination by the Employer
  • Who can terminate?
  • Grounds for termination for cause by the Employer
  • Notice of termination
  • Post termination
  • The financial consequences of termination
  • Termination for convenience
  • Termination as a result of an exceptional event
  • Termination for failure to remedy a defect or damage

FIDIC contracts 2017—termination by the Employer

This Practice Note considers termination by the Employer under the FIDIC Red, Yellow and Silver Books 2017. It does not address the right to terminate at law. Further, the governing law of the Contract may affect the operation of some of the clauses.

For more information about termination by the Employer in the pre-2017 editions of the Red, Yellow and Silver Books, see Practice Note: FIDIC contracts (pre-2017 editions)—termination by the Employer.

Who can terminate?

Both the Employer and the Contractor can terminate the Contract. Clause 15 sets out the procedure for Employer termination and Clause 16 sets out the procedure for Contractor termination. The Employer may also terminate under Sub-Clause 11.4 [Failure to Remedy Defects], and both Parties may terminate under Sub-Clause 18.5 [Optional Termination] and Sub-Clause 18.6 [Release from Performance under the Law].

For more information about termination by the Contractor, see Practice Note: FIDIC contracts 2017—termination by the Contractor.

Grounds for termination for cause by the Employer

Sub-Clause 15.2 [Termination for Contractor’s Default] lists eight grounds for termination for cause by the Employer in the FIDIC 2017 editions:

  1. fails to comply with: (i) a Notice to Correct; (ii) a binding agreement, or final and binding determination, under Sub-Clause 3.7 [Agreement or Determination] or (iii) a decision of the Dispute Avoidance/Adjudication Board (DAAB) under 21.4 [Obtaining DAAB’s Decision] (whether binding or final and

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