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PRACTICE NOTES
Price is a key consideration of any construction contract. The FIDIC forms of contract follow two different methods of determining the price. The Red and Pink Books are remeasurement contracts, whereas the Yellow, Silver and Gold Books are lump sum fixed price contracts. This Practice Note looks at how the Contract Price in the 2017 editions of the FIDIC contracts (Red, Yellow and Silver Books) is calculated, and the ways in which it can be adjusted. For a review of price in the 1999 editions of the Red, Yellow and Silver Books, and in the Pink and Gold Books, see Practice Note: FIDIC contracts (pre-2017 editions)—price. Remeasurement In remeasurement contracts, an initial estimate of the value of the works is determined by measuring the quantity of each work item (which will be set out in a document referred to as a bill of quantities) and multiplying it by the agreed rate for that particular item. This calculation is then made again at the end of the project once all the quantities have been remeasured to ascertain the contract
PRACTICE NOTES
This Practice Note examines the approach to sub-contracting under the 2017 editions of the FIDIC Red, Yellow and Silver Books. For a look at sub-contracting under the 1999 editions of the Red, Yellow and Silver Books, the Gold Book 2008 and the Pink Book 2010, and for information on the Subcontract for Construction 2011 and the Subcontract for Plant and Design-Build 2019 (both of which are for use with 1999 main contracts), see Practice Note: FIDIC contracts (pre-2017 editions)—sub-contracting. The key principle in the FIDIC contracts in relation to sub-contracting is that the Contractor remains responsible to the Employer for work carried out by Subcontractors. This is enshrined in clause 5.1 of the Red Book and 4.4 of the Yellow and Silver Books. Extent of sub-contracting Under clause 5.1 of the Red Book and clause 4.4 of the Yellow Book, the extent to which the Contractor is permitted to sub-contract the Works is limited by reference to a percentage of the Accepted Contract Amount. The percentage is stated in the Contract Data—if no percentage is stated then the position
PRACTICE NOTES
This Practice Note considers termination by the Contractor 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 Contractor in the pre-2017 editions of the Red, Yellow and Silver Books, see Practice Note: FIDIC contracts (pre-2017 editions)—termination by the Contractor. Who can terminate? Both the Employer and the Contractor may 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 Employer, see Practice Note: FIDIC contracts 2017—termination by the Employer. Grounds for termination by the Contractor Sub-Clause 16.2 [Termination by Contractor] lists ten main grounds
PRACTICE NOTES
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 may 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]
PRACTICE NOTES
This Practice Note considers the role of the Engineer under the FIDIC Red and Yellow Books 2017. For more information on these contracts, see Practice Notes: FIDIC contracts—introduction to the Red Book 2017 and FIDIC contracts—introduction to the Yellow Book 2017. The FIDIC Silver Book 2017 has an ‘Employer’s Representative’ rather than an Engineer and is outside the scope of this Practice Note (see Practice Note: FIDIC contracts—introduction to the Silver Book 2017). For guidance on the role of the Engineer under the FIDIC Red and Yellow Books 1999 and the FIDIC Pink Book 2010, see Practice Note: FIDIC contracts (pre-2017 editions)—the role of the Engineer. Who is the Engineer? The Engineer is ‘the person named in the Contract Data appointed by the Employer to act as the Engineer for the purposes of the Contract, or any replacement appointed under Sub-Clause 3.6 [Replacement of an Engineer]’ (Sub-Clause 1.1.35). It forms part of the ‘Employer’s Personnel’ as defined in Sub-Clause 1.1.3.2. In the FIDIC Red and Yellow Book 2017
PRACTICE NOTES
This Practice Note looks at the Contractor’s obligations in relation to commencement, progress and completion in the 2017 editions of the FIDIC contracts (Red, Yellow and Silver Books). For a look at these time related obligations in the 1999 editions of the Red, Yellow and Silver Books and in the Pink and Gold Books, see Practice Note: FIDIC contracts (pre-2017 editions)—time and for a comparison of the FIDIC time provisions with the JCT and NEC contracts, see Practice Note: Comparison between JCT, NEC and FIDIC time and money events. Time to complete the Works is one of the key concerns in any construction project. The Contractor is under two distinct obligations in relation to time: • the obligation to complete the Works (and each Section, if any) within the Time for Completion under clause 8.2, and • the obligation to proceed with the works with due expedition and without delay (clause 8.1) If the Contractor fails to complete the Works by the relevant Time for Completion, it will be liable to pay damages to the Employer for the
PRACTICE NOTES
Introduction This Practice Note looks at Variations under the FIDIC Red, Yellow and Silver Books published in 2017 (the 2017 suite). For guidance on Variations under the 1999 editions of these contracts, as well as the Pink and Gold Books, see Practice Note: FIDIC contracts (pre–2017 editions)—variations. A Variation can be instructed at any time before the Taking-Over Certificate is issued without the need for the Contractor's agreement. However, granting a Variation may entitle the Contractor to additional payment and/or time within which the Contractor must complete the Works as varied. Variations are primarily governed by clauses 13.1 to 13.3, which set out the right to vary the Works and the procedure to be followed. In the Red and Yellow Books, the Employer is not entitled to instruct Variations directly. Instead, the Employer must direct its instructions through the Engineer—otherwise the Contractor would not be bound to comply with it. Under the Silver Book, the power to initiate Variations, make instructions and request information etc is granted to the Employer directly. However, for the purposes of this Practice
PRACTICE NOTES
Introduction This Practice Note sets out the process for Variations under the FIDIC Red, Yellow and Silver Books 2017 where the Variation is instructed by the Engineer or Employer, where the Engineer or Employer requests a proposal for a Variation or where the Variation is initiated by the Contractor (value engineering). For more on Variations under the 2017 editions see Practice Note: FIDIC contracts 2017—variations. Variations are primarily governed by clauses 13.1 to 13.3, which set out the right to vary the Works and the procedure to be followed. In the Red and Yellow Books, the Employer is not entitled to instruct Variations directly. Instead, the Employer
CHECKLISTS
Introduction This Practice Note sets out the process for Variations under the FIDIC Red, Yellow and Silver Books 2017 where the Variation is instructed by the Engineer or Employer, where the Engineer or Employer requests a proposal for a Variation or where the Variation is initiated by the Contractor (value engineering). For more on Variations under the 2017 editions see Practice Note: FIDIC contracts 2017—variations. Variations are primarily governed by clauses 13.1 to 13.3, which set out the right to vary the Works and the procedure to be followed. In the Red and Yellow Books, the Employer is not entitled to instruct Variations directly. Instead, the Employer
PRACTICE NOTES
ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note summarises the key changes made in the FIDIC Red, Yellow and Silver Books 2017 (second editions) as compared with the 1999 ‘first editions’ of those contracts. FIDIC launched the second editions at its 2017 annual users’ conference in December 2017. It intends to publish its own guide to the contracts in due course, as it did following publication of the 1999 editions. For a report on the 2017 conference, see News Analysis: FIDIC Red, Yellow and Silver Books 2017: conference report. Errata to the second editions were subsequently published in December 2018 (see News Analysis: Errata to FIDIC 2017 contracts published) References to clauses are to clauses in the Red, Yellow and Silver Books 2017 unless otherwise stated. Aims of the update The key aim of the update was to increase clarity and certainty so that each party knows exactly what it has to do, and when. The forewords to the Red and Yellow Books state that the goal was to achieve
PRACTICE NOTES
This Practice Note looks at the Conditions of Contract for Construction 1999 (commonly referred to as the FIDIC Red Book 1999), and the Conditions of Contract for Construction MDB Harmonised Edition 2010 (the FIDIC Pink Book 2010), and compares key differences between the two forms. A new edition of the Red Book was published in December 2017. For more information, see Practice Note: FIDIC contracts 2017—what’s changed? [Archived]. The FIDIC Red Book 1999 The Red Book is one of the most commonly used of the FIDIC contracts. It is suitable for building or engineering works where the Contractor is building to the Employer’s design. For a more detailed look at the Red Book 1999, see Practice Note: FIDIC—introduction to the Red Book 1999. The FIDIC Pink Book 2010 The Pink Book is used on construction projects funded by multilateral development banks (MDBs). MDBs are supranational institutions, such as the World Bank and the European Bank for Reconstruction and Development (EBRD), that provide financial support and professional advice for economic and social
PRACTICE NOTES
What does FIDIC mean? What do they do? FIDIC stands for 'Fédération Internationale des Ingénieurs–Conseils', which is best translated from French as the International Federation of Consulting Engineers. FIDIC represents the consulting engineering industry both globally and domestically. What are the FIDIC forms of contract? FIDIC's contracts committee produces standard forms of contract for civil engineering projects, which are used globally. The purpose of these standard forms is to define the contractual relationship between the parties and to apportion risks between the contractor and the employer. FIDIC states that its contracts allocate risks fairly to the party that is best able to bear and control those risks. In December 2017, FIDIC published new versions (‘second editions’) of its Red, Yellow and Silver Books. These are discussed below, along with the other FIDIC contract forms. For guidance on the key changes in the 2017 versions, see Practice Note: FIDIC contracts 2017—what’s changed? [Archived]. As with other standard form construction contracts, the FIDIC forms are commonly amended to reflect the particular characteristics of each project and the requirements