Fdddration lnternationale des lngdnieurs-Conseils

lnternational Federation oI Consulting Engineers

lnternationale Vereinigung Beratender lngenieure
Federaci6n lnternacional de lngeoieros Consultores

Short Form of Gontract

AGREEMENT
GENERAL CONDIT10NS
R LttS FOR AD DICAT10N

NOTES FOR GUIDANCE

ISBN 2-88432-024-5

FIRST EDITION 1999

F6d6ration lnternationale des lngdnieurs-Conseils

lnternational Federation of Consulting Engineers
lnternationale Vereinigung Beratender Ingenieure
Federaci6n lnternacional de lngenieros Consultores

Short Form of Gontract

AGREEMEN

GttNERAL CONDI 10NS

RULES FOR AD DiCATION
NOttES FOR G IDANCE

iSBN 2-88432-024 5

FIRST

1999

Fl D I C

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,ternationar federation o{ natjonat t/ember Associations of consulting engi-

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members Today FIDIC melnbership covers more than 70 countnes from

and encompass ng rlost ofthe pnvate practice consutting engineers

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wo d wide the malolty of lrlns providing tecr

and natura enuronment assist members wth issues re ating to busin

practcel defne and

act ve,promOte conforrnance to a code of ethicS:enhance the image of oonSuLing englneers

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as leaders and weath creators in soc ety promote the commtment to sustalnab

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cussion of problems of mutua cOncern amonl

the intemationa nnancid insttutionsi development of the consuking engineenng industry in

developing countr es

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oompetence,imparta
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lDlC orgsnizes an odensive prranrne of seminars, conferences, capaoty building \ /orkshops and t-airirE col.trses.

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gves extmttve b 10und hfomaton

Publshed by
Copynght FIDIC 2007

intemationa Federation of Consuting Engineers(FIDICl

wOrd Trade center

l nghts teserved
No part ofthis pub cat on

may be reproduced
ortransm ted in any form

or by any means wnhOut

perrnission Of the pub sher

PO Box 311
1215 Geneva 15
swi enand

Phone
Fax
E mal
n/ww

+41227994900
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AGREEMENT

GENERAL COND:T10NS

SHORT FORM of Contract

PARTICULAR COND!T:ONS

RULES FOR AD UDICAT10N

F rst Edtion 1 999

1S8N2-88432024-5

NOTES FOR GUIDANCE

INTERNAT10NALE VEREINIGUNG 8ERAINDER INGENIEURE

FEDERAC10N IN ERNAC10NAL DEINGENIEROS CONSuLTORES

FEDERAl10N IN ERNAnONALE DES lNGENIEURS CCINSEILS

iNFERNA ONAL I ERAnON OF CONSU lNG ENGlNEERS

ACKNOWLEDGEMENTS

The F6d6ration lnternationale des lng6nieurs-Conseils (FlDlC) extends special

thanks to the following members of its Task Group: Philip Jenkinson ffask
Group Leader), WS Atkins, UK; AEJ [lony) Sanders, Mouchel, UK; and
Edward Corbett, Cobett & Co, UK. Liaison with other active Task Groups was
provided by Peter L Booen, clBB Ltd, UK.

The preparation was canied out under the general direction of the FIDIC
Contracts Committee comprising John B Bowcock (Chairman), Consulting
Engineer, UK; Michael Mortimer-Hawkins, SwedPower, Sweden; Axel-Volkmar
Jaeger, Schmidt Reuter Partner, Germany; and KB [ony) Nonis (Special

Adviser), Consutting Engineer, UK.

Drafts were commented on by the following persons and organisations: Mushtaq

Ahmad, NESPAK, Pakistan; Peter Batty, Post Buckley lnternational, USA; Nael G
Bunni, Consulting Engineer, Ireland; lGthryn Josephine T. dela Cruz, Construction
lndustry Authority of the Philippines; Michael Dudtey, UNOPS; Hans Enh6ming, ABB

Asea Brown Boveri Ltd, Switzedand; Mark Griffrths, Grffiths & Armour, UK; Geoffrey F
Hawker, Consulting Engineer and Banister, UK; Adam K Heine, Consutting Engineer,
Poland; HS Kwong, Secretary for Works, Hong Kong; Jan Cees Overbosch/Evert Jan
Wilers, DFIV Beheer BV The Netheriands; Marek Bdultowski, Cosmopoli Consultants,
Poland; J G Rees, Binnie Black & Veatch, UK; Asian Development Bank; European

Bank for Reconstruction and Development; lnter-Arnerican Development Bank;

lnternational Association of Dredging Companies; lnter-pacific Bar Association;
ORGAnisme de Liaison lndustries M6talliques Europennes (,,ORGAL|ME"); and The
Wodd Bank. Acknowledgement of reviewers does not mean that such persons or
organizations approve the wording of all clauses.
FIDIC wishes to record its appreciation of the time and eftort devoted by all the above.

The ultimate decision on the form and content of the document rests with FlDlC.

O F DiC l 9

FOREl ORD
These Conditions of Contract have been prepard by the F6d6ration Intemationale
des lng6nieurs-Conseils (FlDlC) and are recommended for engineering and building
work of relatively small capital value. However, depending on the type of work and the
circumstances, the Conditions may be suitable for contracts of greater value. They are
considered most likely to be suitable for fajrly simple or repetitive work or work of short
duration withoLrt the need for spcialist sub-contracts.
The main aim has been to produce a strajghtforward flexible document which includes
all essential commercial provisions and which may be used for all types of engineering
and building work with a variety of administrative arangements. Under the usual

anangements for this type of contract, the Contractor constructs the Works in
accordance with design provided by the Employer or by his representative (rf any).
Howeve( this {orm may also be suitable for contracts which include, or wholly
comprise, contractor-designed civil, mechanical andlor electrical works.
ln addition, the Employer has a choice of valuation methods. Furthermore, although
there is no reference to an impartial Engineer, the Employer may appoint an
independent Engineer to act impartially, should he wish to do so.
The form is recommended for general use, though modifications may be required in
some lurisdictions. FIDIC considers the official and al,thentic text to be the version in
the English language.

The intention is that all necessary lnformation should be provided in the Appendix to
the Agreement, the latter incorporating the tenderer's offer and its acceptance in one
simple document. The General Conditions are expected to cover the majonty of
contracts. Nevertheless, users will be able to introduce Particular Conditions if they
wish, to cater for special cases or circumstances. The General Conditions and the
Particular Conditions will together comprise the Conditions governing the rights and
obligations of the parties.
To assist in the preparation of tender documents using these Conditions, Notes for

Guidance are included. These Notes will not become one of the documents fdrming
the Contract. Finally, applicable Rules for Adjudication are also included.
The attention of users is drawn to the FIDIC publication "Tendering Procedure', which

presents a systematic approach to ihe selection of tenderers and the obtaining and
evaluation of tenders.

0 01C1999

CONTENTS
Agreement

Offer

Acceptance

Appendix

General Conditions

GENERAL

1.1

Definitions

pROVtStONS

............1

The Contract
Persons
Dates, 'i-imes and periods

THE

-1.2
.3
.4
'I
.5
.6

Money and Payments

Other Definitions
lnterpretation
Priority of Documents
Law
Communications
Statutory Obtigations

EMPLOYER

2.1
2.2
2.3
2.4

Employer's lnstructions
Approvals

EMPLOYER'S REPRESENTATIVES

3.1
3.2

Authorised Person
Employer's Representative

THE

4.1
4.2
4 .3
4.4
o

FrDlc

..........2

Provision of Site
Permits and Licences

CONTRACTOR

..........3

..

.. ...

.3

General Obligations

Contractor's Representative
Subcontracting
Performance Security

1999

51

Contractors Design

52

RespOnSib ty for Design

EMPLOYERIS LIABILIT:ES

61

Employer's Uabilities

TIME FOR COMPLETION

71

Execution ot the Works

7.2

Programme

73
74

Extension of Time

TAKING OVER

DES:GN BY CONTRACTOR

Late Completion

Completion

8.2

Takng OVer Notce

REMEDY:NG EFFECTS

9.1

Rernedylng Defects

92

UncoVenng and Testing

10

VAR:AT:ONS AND CLAIMS.

101

Right to Vary

102
103
104
105

Va uatiOn of VanatiOns

11

CONTRACT PRICE AND PAYMENT.

111

Valuation ofthe Wo
Monthy staterrents

81

Ea4y Warning
Right to Clalm

N/anatiOn and Clalm ProCedure

lnte

m PapentS

Parent Of First Har of Retention

Payment of SeCOnd Hdf Of Retenlon

nd

Parent
CurenCy
Delayed Pttent

DEFAULT .

12.1
12.2
12.3
12.4

Default bY Contractor
Defauh bY Employer

13
'13.1
13.2

RISK AND RESPONSIBILITY

FrDC 19S

lnsotuenry
Payment upon Termination

C,ontractor's Care of the Works

Force Majeure

12

112
113
114
115
116
117
118

14

1NSURANCE..

141
14 2

Arangelnents

14 3

Fa ure to insure

15

15 1

15 2
15 3

ent of Cover

RESOLUT:ON OF D:SPUTES .

. .

10

Adludicat on
Notice of Dissatisfaction
Arbltratlon

iNDEX ..

.. 11

Particular Conditions

Rules for Adjudication

Notes for Guidance

O F DIC 1999

AGREEMENT

GENERAL CONDIT:ONS

SHORT FORM of Contract

PARTICULAR CONDIT10NS

RULES FOR AD UDICAT10N

Agreernent

First Edition 1999

NOTES FOR GU:DANCE

FEDERACION INTERNAC10NAL DE INGENIEROS CONSULTORES

FEDERAT10N :NTERNAT10NALE DES INGEN URS CONSEILS

INTERNAnONAL FEDERA ON OF CONSULllNG ENGINEERS
INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE

Agreement
The Employer

Of

is

Of

The Employer desires the execLrtion of certain Works known as

OFFER

0n words)

or such other sum as may be ascertained under the Contract.

This offe( of which the Contractor has submitted two signed originals, may be accepted by
the Employer by signing and returning one originalof this document to the Contractor before
ldate)

The Contractor understands that the Employer is not bound to accept the lowest or any offer
received for the Works.

\-

Signature:

Date:

Name:

Authorised to sign on behall of (oeankation

name):

Capacity:

ACCEPTANCE
The Employer has by signing below accepted the Contractor's offer and agrees that in
consideration for the execution of the Works by the Contractor, the Employer shall pay the
Contractor in accordance with the Contract. This Agreement comes into effect on the date
when the Contractor receives one original of this document signed by the Employer.

Signature:

Date:

Name:

Authorised to sign on behalf of (organbation

namQ:

Capacity:
Genea Co lkms

O DiC

"001999

The Contractor has examined the documents listed in the Appendix which forms part of this
Agreement and offers to execute the Works in conformity with the Contract for the sum of

(in figures

The Contractor is

APPEND:X

iNote:wth the exception ofthe lems for which the Employers requirements have
been inserted, the Contractor shdl complete the fo owing inforrnation before
submtting his ottrl

Sub-Clause Data

This Appendix forrns part ofthe Agreement

Documents for7ning the Contract

Document ldentification

ete r ,app obel

D ument(de

onty 111

sted in the order of p

Particularconditions ....
General Conditions. . . . . .
TheSpecification ..... ..

The Drawings
The Contractor's tendered
design
The bill of quantities.....

The Agreement

.........

1.5

Law Ofthe Country'

14

Contract

days

Law of the

119

.....,....

Timeforcompletion

Language

...

..

On the Commencement Ddte"

2.1

Provision of Slte

31

Authorised person

t(|oivn)

........

representative [f

Narr and address of Empblg's

Performance security (if any):

44

Form

44

Amount

pprOyer rO amelld as approprare

Short Form or contraCt

O F DIC 1999

Sub Clause

Item

for

any)

Contractor's

5.1

......

Time for submission

........

7.2

......

Form of programme

........

7.2

......

Amount payable due to failure to

complete

7.4

..

Specifcation Clause No's

Programme:
Wrthin 14 days'of tf|e Commencernent Date.

.. ..

per day up

to a maximum of 10%- of

sum

stated in the Agreement

Period for notifying defects . . . .

9.1

&11.5

365 days'catcutated from the

date stated in the notice under
Sub-Clause 8.2

Variation procedure

10.2.....

Daywork rates

(details)
Valuation of the Works'

\-

11..1

.....

(details)

11.1

.....

(details)

Lump sum price with bill of

quantities

11.1

.....

(details)

Rerneasurement with tender bill

of quantities

11.'l

.....

(details)

Cost reimbursable

11.1

.....

(details)

Lump sum Price . .

Lump sum p.ice with schedules

of rates

Percentage of value of Materials

and Plant

112

Mater s
Plant

*
Gene nd Ons

Employer to amend as appropriate

o FrDc 1seg

800/;

90y;

.......

frf

Requirements
design

Data

Sub-Clause Data

hem

117

1nsurances

14 1

Plant The sum stated in the

Equipment

Agreement Plus 15%

Full replacement cost

Contractor's

fees

Exclusions'

Amount of cover*

covef

The Works, Materials,

and

% per annum

118

Rate ofinterest

Type of

5%

113

Curency of ptt nent

Percentage of retenton

Third t%rty injury to Persons

and darnage to Property

Workers

Other cover-

Arbitration
.

153

UNC TRAL Arblration Rules

Bules . .

(deta )

153

Presldent of FIDIC or his nominee

(deta S)

Place of Arbtration

15.3.....

The Country.

-Employer to amend as aqqro?iate

lV

O F DC 1999

Short Fom of ContraCt

Appoinlng amhottty

AGREEMENT

GENERAL CONDIT10NS

SHORT FORM of Contract

PARTiCULAR CONDIT10NS

RULES FOR ADJUDICAT10N

GenmlCond s

Edllon 1 999

NOTES FOR GUIDANCE

GttrJP

5 ns

1.1

Definitions

ln the Contract as defned below,the words and expressions delned sha

have the
meanings assigned to them,except wllere the context requires othem se:

folloM ng

The Contract

111

Contract means the Agrement and the other documents lsted h the

Appendix.

113

'Drawings' means the Employer's drawings of the Works as listed in the

Appendix, and any Variation to such drawings.

Persons

114

'Employer' means the person named in the Agreement and the legal

successors in title to this person, but not (except with the consent of the
Contractor) any assignee.

Dates, Times and

115

'Contractoa means the person named in the Agreemerit and the legal
su@essors in title to this person, but not (except with the consent of the
Employer) any assignee.

116

'Party' means either the Employer or the Contractor.

117

'Commencement Date' means the date 14 days after the date the
Agreement comes into effect or any other date agreed between the Parties.

118

'day' means a calendar

Periods

119

day.

'Time for Completion' means the time for completing the Works as stated
in the Appendix (or as elitended under Sub-Clause 7.3), calculated from the

Commencement Date.

Money and Payments

1.1.10 'Cost'

Other Definitions

'1.1.1

means all expenditure properly incuned (or to be incuned ) by the

Contractor, whether on or off the Site, including overheads and similar
charges, but does not include proft.

'Contractor's Equipment' means all apparatus, machinery,

vehiclqs,

facilities and other things required for the execution of the Works but does
not include Matedds or Plant.

1.1.12 'Country' means

.1

.1

.13

the country in which the Site is located.

'Employer's Liabilities' means those matters listed in Sub-Clause 6. 1 .

1.1.14 'Force M4eure'means

beyond
General Conditims

O F00 1999

an exceptional event or circumstance: which is

Party's control; which such Party could not reasonably have

'Specification' means the document as listed in the Appendix, including

Employer's requirements in respect of design to be canied out by the
Cont actor, if any, and any Vaiation to such document.

112

General Conditions

1.1.15

"Materials' means things of all kinds (other than Plant) intended to form or
forming part of the permanent work.

.1..1.16 'Plant' means the machinery and apparatus intended to form or forming
part of the permanent work.
1

.1.17

1.1.18

'Site" means the places provided by the Employer where the Works are to
be executed, and any other places specified in the Contract as forming part
of the site.

'Variation' means a change to the Speciication and /or Drawings 0f any)

which is instructed by the Employer under Sub-Clause 10.1 .
means all the work and design (if any) to be performed by the
Contractor including temporary work and any Variation

1.1.19 'Works'
1.2
I

nterpretatio n

Words importing persons or parties shall include Jlrms and organisations Words
importing singular or one gender shall include plural or the other gender where the
contelit requires.

13

Priority of Documents

The documents forming the Contract are to be taken as mutually explanatory of one
another. lf an ambiguity or discrepancy is lound in the documents, the Employer shall
issue any necessary instructions to the Contractor, and the priority of the documents
shall be in accordance with the order as listed in the Appendix.

The law of the Contract is stated in the Appendix.

Communications

Wherever provision is made for the giving or issue of any notice, instruction, or other
communication by any person, unless otherwise specified such communication shall
be written in the language stated in the Appendix and shall not be unreasonably
withheld or delayed.

16

Statutory Obligations

The Contractor shall comply with the laws of the countries where activities are
performed. The Contractor shall give all notices and pay all fees and other charges in
respect of the Works.

The,E-mployer
2.1

Provision of Site

The Employer shall provide the Site and right of access thereto at the times stated in
the Appendix.

22

Permits and Licences

The Employer shall, if requested by the Contractor, assist him in apptying for permits,
licences or approvals which are required for the Works.

OFDC,999

Slort Fo.m of Coolracl

provided against before entering into the Contract; which, having arisen,
such Party could not reasonably have avoided or overcome; and, which is
not substantially attributable to the other Party.

2.3

The Contr3ctor shall compty with all instructions given by the Employer in respect of
the Works including the suspension of all or part of the Works.

24

Approvals

No approval or consent or absence of comment by the Employer or the Employer's

representative shall affect the Contractor's obligations.

lnstructions

Employer's

E3eris Representatives
3.1

Authorised Person

32
Employer's
Representative

The Emp10yer may also appoint a lrrln orindMdualto cary out certa n duties The

appointee may be narned ln the Appendk, or nottted by the Emp10yer to the

duties and authorty Of this Empl rs representat e

Th4ntractor
4.1

The Contractor shall carry out the Works properly and in accordance with the
Contract. The Contractor shall provide all supervision, labour, Materials, plant and
Contractor's Equipment which may be required. All Materials and plant on Site shall
be deemed to be the property of the Employer.

42

Contractor's
Representative

The Contractor shall submit to the Employer for consent the name and paruculars of
the person authorised to receive instructions on behatf of the Contractor.

4.3

Subcontracting

The Contractor shall not subcontract the whole of the Works. The Contractor shall not
subcontract any part of the Works without the consent of the Employer.

44

Performance Security

lf stated in the Appendix, the Contractor shall deliver to the Employer within 14 days
of the Commencement Date a performance scurity in a form and from a thhd party
approved by the Employer.

De['l by COntractor

5.1

Contractor's Design

The Contractor shall carry out design to the extent specified, as refened to in the
Appendix. The Contractor shall promptly submit to the Employer all designs
prepared by him. Within 14 days of receipt the Employer shall notify any comments
or, if the design submittecj is not in accordance with the Contract, shall reject it
stating the reasons. The Contractor shall not construct any element of the
permanent work designed by him within 14 days after the design has been

0 D 1999

nS

Contractor m lmeto lme The Emplo shallno the cOntractor ofthe delegated

Genera1 0b gations

One of the Employer's personnel shall have authority to act for him. This authorised
person shall be as stated in the Appendix, or as otherwise notified by the Employer to
the Contractor.

submittqd to the Employer or where the design for that element has been rejected'
Design that has been relected shall be promptly amended and resubmitted The
Contractor shall resubmit atl designs commented on taking these comments into
account as necessary
5.2

Responsibility for
Design

The Contractor shall remain responsible for his tendered design and the design under
this clause, both of which shall be fit for the intended purposes defined in the contract
and he shall also remain responsible for any infringement of any patent or copyright in
respct of the same. The Employer shall be responsible for the Specifcation and
Drawings.

Ettetth
61

Employeris Liab ities

ln this Contract, Employer's Liabilities mean

a)

war, hostilities (wirether war be declared or not), invasion, act of foreign

b)

enemies, within the Country,

rebellion, tenorism, revolution, insunection, military or usurped power, or civil
war, within the Country,

c)

commotion or disorder by persons other than the Contractor's personnel

and other employees, affecting the Site and/or the Works'
rio1,

d)ionisingradiations,orcontaminationbyradio-activityfromanynuclearfuel'or
from any nuclear waste from the combustion of nuclear fuel, radio-active
toxic explosive, or other hazardous properties of any explosive nuclear
assembly or nuclear component of such an assembly, except to the extent to
which the Contractor may be responsible for the use of any radio-active

e)
0
g)
h)

material,
pressure waves caused by aircraft or other aerial devices travelling at sonic or

supersonic speeds,
use or occupation by the Employer of any part of the WorK, except as may be
specified in the contract,
design of any part of the Works by the Employer's personnel or by others for
whom the Employer is responsible, and
any operation of the forces of nature affecting the Site and/or the Works, which
was unforeseeable or against which an experienced contractor could not

precautions.

i)
11

reasonably have been expected to take

,
Force Majeure,
a suspension under sub-clause 2.3 unless it is attributable to the contractor's
failure,
any failure of the EmPloYe(

or physical conditions other than climatic conditions'

encountered on the Srte during the performance of the Woks, which
physical obstructions

permanent

pl

wok, and

of the Contractorts ob gations tO

dalnage whiCh is an unavoidable reSu
execute the WOrks and to remedy any defects

O FlDC 1999

urtFom orCOntct

0)

obstructions or conditions were not reasonably foreseeable by an experienced

contractor and which the Contractor immediately notmed to the Employer,
any delay or disruption caused by any Vaiation,
any change to the law of the Contract after the date of the Contractor's offer
as stated in the Agreement,
losses arising out of the Employer's right to have the permanent work executed
on, over, under, in or through any land, and to occupy this land for the

m
rcom

7.1

Execution of the Works

The Contractor shall commence the Works on the Commencement Date and shall
proceed expeditiousty and without delay and shall complete the Works within the Time

for Completion.
72

Programme

hin the lme stated in the Appendlx,the Contractor sha

submt to the Employer a

prOgramme forthe Works in the fom stated in the Appendix

Subject to Sub-Clause 10.3, the Contractor shall be entitled to an elitension to

the Time for Completion if he is or will be delayed by any of the Employer,s

74

Late Completion

lf the Contractor fails to complete the Works within the Time for Completion, the
Contractor's only liability to the Employer for such failure shall be to pay the
amount stated in the Appendix for each day for which he fails to complete the
Works.

Ta8_ v er

8.1

Completion

The Contractor may notifu the Employer when he considers that the Works are

complete.

8.2

Taking-Over Notice

The Employer sh l not the contractor when he considers that the Contractor has
completed the Works stating the date accordingv Akernatvely the Employer may
notlfy the Contractor that the Wo ,dthough not mplete,are ready for tttng
over

stating the date accordingly

The Employersha take overthe Works upon the issue ofthis notice The Contractor

shall prompt

mplete any outstanding work and,sublect to Clause 9,clear the

Ste

RettyingDefects
9.1

Remedying Defects

The Employer may at any time prior to the expiry of the period stated in the Appendix,
noti{y the Contractor of any defects or outstanding work. The Contractor shall remedy
at no cost to the Employer any defects due to the Contractor's design, Materials,
Plant or workrnanship not being in accordance with the Contract.

Genera

O FIDC 19

nd tions

On receipt of an application from the Contractor, the Employer shall consider all
supporting details provided by the Contractor and shall extend the Time for
Comdetion as appropriate.

Liabilities.

Extension of Time

73

[_

The cost of remedying defects attributable to any other cause shall be valued as a
Variation- Failure to remedy any defects or complete outstanding work within a
reasonable time of the Employels notice shall entitle the Employer to carry out all
necessary work at the Contractor's cost.

1
^

92
Uncovering and Testing

The Employer may give instruction as to the uncovering ancl/or testing of any work'
Unless as a result of any uncovering ancyor testing it is established that the
Contractor's design, Materials, Plant or workmanship are not in accordance with the

Contract, the Contractor shall be pald for such uncovering ancl/or testing as

Variation in accordance with Sub-Clause 10.2.

ittand Jms
10.1

Right to Vary

The Employer may instruct Vadations.

10.2 -

Valuation of VanatiOns

Variations shall be valued as follows:

a)
b)
c)
d)
e)

at a lump sum price agreed between the Parties, or

where appropriate, at rates in the Contract, or
in the absence of appropriate rates, the rates in the Contract shall be used as
the basis for valuation, or failing which
at appropriate new rates, as may be agreed or which the Employer considers
appropriate, or
if the Employer so instructs, at daywork rates set out in the Appendix for which
the Contractor shall keep records of hours of labour and Contractor's
Equipment, and of Materials used.

103
Early Warning

A Party shall notiry the other as soon as he is aware of any circumstance which may
delay or disrupt the Works, or which may give rise to a claim for additional payment'
The Contractor shall take all reasonable steps to minimise these effects'

104
lf the Contractor incurs Cost as a result of any of the Employer's Liabilities, the
Contractor shall be entitled to the amount of such Cost. lf as a result of any of the
Employer's Liabilities, it is necessary to change the Works, this shall be deaJt with as
a Variation.

10.5

The Contractor shall submit to the Employer an itemised make-up of the value of
Variations and claims within 28 days of the instruction or of the event gMng rise to the
claim. The Employer shall check and if possible agree the value. ln the absence of
agreement, the Employer shail determine the value.

O FIDIC 1999

Sho"Forln Of an"at

Variation and Claim

Procedure

The contractor,s entitlement to extension to the Time for completion or additional

payment shall be limited to the time and payment which would have been due if he
had given prompt notice and had taken all reasonable steps.

Right to Clalm


11.1

Valuation of the Works

The Works sha be valued as prov ded forin the Appendix,subl tto Clause 10

11 2

Monthly Statements

The Contractor shall be ent ed to be paid at monthly intervals:

a the value ofthe Works executed,

bl
the percentage stated in the Append of the vaue of Materds and Plant
ddered to the Ste at a reasonable lme,
sublectto any addtions or deductions which may be due
The Contractor sha submt each month to the Emp10yer a statement sho 4ng the
alnounts to which he considers himself entlled

11_3

lnterim Payments

Wrthin 28 days Of dellvery of each statement,the Employer sha pay to the Contractor

the amount shown in the Contractors statementlett retenIOn at the rate stated in
the Appendix,and less any arnountfor which the Employer has specned his reasons
for disagreement The Emp10yer sha not be bound by any sum prevous conSidered
by him to be due to the Contracto

The Emp10yer may wthhold intenm payments unt he receves the performance
SeCu /under Sub Gause 4 4 r anyl

114
Payment of ttrst Half of

Retention

One haf of the retention shall be pald by the Emp10yer to the Contractor v

days afterissuing the notice under Sub

thin 1 4

Clause 8 2

11 5

Payment of Second Har

of Retention

The remander Ofthe retenlon shall be pald by the Emp10yerto the Contractor wthin
14 days a er etherthe expiry ofthe penod stated in the Append ,or the rernedying
of notned defects or the mpletion Of oustanding wok,all as referred to in Sub
Clause 9 1,whicheveris the later

116
Final Payment

Within 42 days of the latest of the events listed in Sub-Clause

1 1 .5 above, the
Contractor shall submit a fnal account to the Employer together with any
documentation reasonably required to enable the Employer to ascertain the final

contract value.
Within 28 days after the submission of this finai account, the Employer shall pay to the

Contractor any amount due. tf the Employer disagrees with any part of the
Contractor's final account, he shall speciry his reasons for disagreement when makjng
payment.
11.7

Currency

Payment shall be in the cunency stated in the Appendix.

11 8

Delayed Payment

The Contractor sha be enttled to interest at the rate stated in the Appendix for each

day the Emp10yerfals tO pay beyond the prescttbed papent penod

Genera Cond1 0ns

O FiCI C l 9

c:itllltPrice,and Payment

1,1

-:

Deftti:
121
Defau:t by Contractor

d
lf the Contractor abandons the Works, refuses or fails to comply wtth a va
instn ction of the Employer or fals to proceed expedliOusy and wlhout delay oris,
despite a wntten complaint,in breach ofthe Contracti the Emp10yer may 9 e notiCe
referrng to this Sub Clause and stating the defaul

if the Contractor has not taken a

practicable steps to rernedy the defaut wlthin 1 4

days after the Contractor's receipt ofthe Employers notice,the Employer may by a

second notice g,ven wlthin a further 21 days,terrninate the Contract The Contractor
sh l then demob

ise from the Sle leavng behind Matends and Plant and any

Contractor.s Equipment which the Emp10yerinstmcts in the second notice is to be

used unt the completion ofthe VVorks
12.2

Defau:tby Emp:oyer

lf the Emp10yer fals to pay in accordance wlh the Contract,or is,despte a wltten
complant,in breach Of the Contract,the Contractor may 9 ve notiCe refemng to this
Sub Clause and stating the defaun r the defauL is not remedied wthin 7 days after
the Emp10yers receipt ofthis notice,the Contractor may suspend the execution of dl

or parts ofthe Works

if the default is not remedied within 28 days after the Employeris receipt of the

Contractor's notice,the Contractor may by a second notice given within a ttnher

21 days,terminate the Contract The Contractor sha then demob se from the

Sle

123
lnsolvency

lfaPartyisdeclaredinsoventunderanyapplicablelaw,theotherPartymaybynotice
Equipirent which the Employer instructs in the notice is

to be used until the

completion of the Works.

terminaie the Contract immediately. The Contractor shall then demobilise from the Site
leaving behind, in the case of the Contractor's insolvency, any Contractor's

12.4

Payment upon
Termination

After ternination,the Contractor shall be entlled to payment ofthe unpald b ance of

the va ue ofthe Works executed and ofthe Materals and Plant reasonably del ered
to the S te,adlusted by the fo owlng:
al

b)

any Sums to WhiCh the Contractoris enIJed under Sub

Clause 10 4,

any Sums to whiCh the Emp10yeris entlled,

Cl

if the Emp10yer has terminated under Sub Clause 12 1 or 12 3,the Employer

sha be entnled tO a sum equent to 20%of the value ofthose parts ofthe

dl

rthe contractor has terminated under Sub Clause 12 2 or12 3,the Contractor

VVorks not executed at the date ofthe terrnination,

sh l be entitled to the Cost of his suspension and demoblisation together with

a sum equ alent to 1 096 ofthe value ofthoSe parts ofthe VVorks not executed
at the date ofternination

The net balance due sha be pald or repald within 28 days of the notice of
tel nination

O FOC 199Q

Short Form of Cootract

13.1

Contractor's Care of

Works

the

tta3espOiJ
The Contractor shail take full responsibility for the care of the Works from the
Commencement Date until the date of the Employer's notic under Sub-Clause 8.2.
Responsibility shall then pass to the Employer. lf any loss or damage happens to the
Works during the above period, the Contractor shall rectiry such loss or darnage so
that the Works conform with the Contract.

negligence or by other defautt of the Contractor, his agents or employees.

Unless the loss or damage happens as a result of an Employer's Uability, the

Contractor shall indemnify the Employe( the Employer's contractors, agents and
employees against all loss or damage happening to the Works and against all claims
or expense arising out of the works caused by a breach of the contract, by

132
Force Majeure

Contractor sha suspend the exect tion ofthe Works and,to the extent agreed wnh

the Employol demob ise the Contractor's Equipment

lf the event continues for a penod of 84 days,ether Pany may then g e notice of

ternination which sh ltake effect 28 days after the gi ng Of the notice

After ternination,the Oontractor shall be entlled to payment ofthe unpad balance Of

the value ofthe Works execu d and ofthe Matenals and Plant reasonaby delvered
to the S ,adlusted by the fo owing:

any sums to which the Contractor is entitled under Sub-Clause 10.4,

the Cost of his suspension and demobilisation,
any sums to which the Employer is entitled.

The net balance due sha

be pald or repad wlhin 28 days of the notice of

terrninat on

htta4
14.1

Extent of Cover

The Contractor shall, prior to commencing the Works, effect and thereafter maintain
insurances in the.ioint names of the Parties:

for loss and damage to the Works, Materials, Plant and the Contractor's

Equipment,
b)

C)

Gerpral Condibns

for liability of both Parties for loss, damage, death or injury to third parties or
their property adsing out of the Contractor's performance of the Contract,
including the Contractor's liability for damage to the Employer's property other
than the Works, and
for liability of both Parties and of any Employeas representative for death or
injury to the Contractor's personnel except to the extent that liability arises from
the negligence of the Employer, any Employer's representative or their
employees.

O F 01C 1999

r a Pa is or be prevented from performing any of ts obloatiOns by Force

Maleure,the Pa"afFected sh l not the Other Paw immediatev necessary the

142

All insurances shall conform with any requirements detailed in the Appendix. The
policies shall be issued by insurers and in terms approved by the Employer. The

Arangements

Contractor shall provide the Employer with evidence that any required policy is in force
and that the premiums have been paid.

Ail payments received from insurers relating to loss or damage to the Works shall be

held jointty by the Parties and used for the repair of the loss or damage or as
compensation for loss or damage that is not to be repaired.

143

Failure to lnsure

the Contractor fails to effect or keep in force any of the insurances refened to in the
previous Sub-Clauses, or fails to provide satisfactory evidence, policies or receipts,
the Employer may, without prejudice to any other right or remedy, effect insurance Jor
the cover relevant to such default and pay the premiums due and recover the same
as a deduction fiom any other monies due to the Contractor.
tf

15dDisp

151
AdiudiCation

Unless settled amicably, any dispute or difference which arises betlveen the
Contractor and the Employer out of or in connection with the Contract, including any
valuation or other decision of the Employer, shall be refened by either Party to
adjudication in accordance with the attached Rules for Adiudication ('the Rules"). The
adjudicator shall be any person agreed by the Parties. ln the event of disagreement,
the adjudicator shall be appointed in accordance with the Rules.

152
Notice of Dissatisfaction

if a Pa /iS dissat sfled wlth the deCision Of the adludicator or r no decision is g

en

wnhn the lme set out in the Rules,the Pany may gn e notice of dissat sfaction
refe ng to this Sub Clause wthin 28 days of receipt ofthe decislon or the expiry of
the tirne for the decision lf no notice of dissatisfaction is given wnhin the speclned
tirne,the decision sha be nnd and binding on the Partles lf notce of dissatsfaction
is g ven wnhin the spectted tirne,the decision shall be bindlng on the Parties who sh

give effectto l withom delay unless and untilthe decision ofthe adludicatoris revised
by an arbitraton

15.3 -
Arb Jon

A dispute which has been the subject of a notice of dissatisfaction shall be linally
settled by a single arbitrator under the rules specified in the Appendix. ln the dbsence
of agreement, the arbitrator shall be designated by the appointing authority specified
in the Appendix. Any hearing shall be held at the place specified in the Appendix and
in the language refened to in Sub-Clause 1 .5.

10

Smrt Form of Contract

Sub-Clause
Adjudication
Approvals
Arbitration

Arangements, lnsurance

2.4

10
3

15.3
14.2

10
10

15.1

Authorised person
Communications

Page

3
.l

.5

Compbtion
Contractor's Care of the Works
Contractor's Design
Contractor's Representative

8.1
13.1

5.1

4.2

Cunency

11.7

3
7

Defautt by Contractor
Defautt by Employer
Definitions
Delayed Payment

12.1
1.1

11.8

Early Warning, Claims

10.3

2.3

6
3

J.Z

6.1
7.1

4
5
5

Employer's lnstructions
Employer's Representative
Employer's Liabilities
Execution of the Works
Extension of Time
Extent of Cover, lnsurance
Failure to lnsure
Final Payment

12.2

-7 .)

14.1

I
I

14.3
11.6
13.2

10
7

4.1

lnsolvency
lnterim Payments
lnterpretation

12.3
11.3
1.2

Late Completion
Law

7.4

Force Mdeure
General Obligations, Contractor

General Conditioos

1.4

Monthly Statements

11

Notice of Dissalisfaction

15.2

10

Payment upon Termination

Performance Security
Permits and Ucences
Priority of Documenls

12.4

4.4

3
2
2

o FtDc 19q)

.2

2.2
l.J

11

lNDEX OF SUB CLAUSES

Retenlon,Second Har
Right to Claim
Right to Vary

52
114
115
104
101

5
4
7
7

6
6

Statutory Ob gations

91

Responsib ity for Design

Retenton, rst Haf

Defects

Rern ng

ProMsion of Sne

PrOgramme

Subcontracting
Taking Over

Notce

Uncovenng and Testing

102
105

1/ar ation and Claim Procedure

111

N/a uation of Vanations

92

Vauation of the VVorks

82

12

O FD0 1999

Short Fom or COnt act

AGREEMENT

GENERAL CONDIT10NS

SHORT FORM of Contract

PARTICULAR CONDIT10NS

RULES FOR AD UDiCAT10N

Parular cOndm
rst Edttbn 1 999

NOTES FOR GUIDANCE

FEDERAl10N INTERNAl10NALE DES INGENIEURS CONSEl::

lNTERNAl10NAL FEDERA ON OF CONSuLTING ENGINEERI

INTERNAl10NALE VEREINIGUNG BERATENDER INGENIEURI

FEDERAC10N INTERNAC10NAL DEINGEN EROS CONSULTOREl

(1::

=1

Particular Conditions

It is intended that the Short Form of Contract will work satisfactorily without any
Particular Conditions. However, if the requirement of the proiect makes it desirable to
arnend any Clause or to add provisions to the Contract, the amendments and
additions should be set out on pages headed Particular Conditions. Care should be
taken with the drafting of such Clauses especially in view of the high priority given to
the Particular Conditions by Sub-Clause I .3.

O FIDiC 1999

1::

AGREEMENT

GENERAL CONDIT10NS

SHORtt FORM of Contract

l
l'l

PARTICULAR CONDIT:ONS

RULES FOR AD UDICAT:ON

tl

Rules for Adiudicaton

First Edition 19sg

NOTES FOR GU:DANCE

'l
'1

'I

l
'r
l
l
l
l
lI
l
l
l
I

FEDE

ON IN ER

1 :8W

ON

i
8

DERA00N NrERNA00ML

Rules for Adjudication

refered to in Sub Clause 1 5.1

General

Any reference in the Conditions of Contract to the Rules for Adjudication shall
be deemed to be a reference to these Rules.
Definitions in the Contract shall apply in these Rules.

Adiudicator shail be a suitably qua.lilied person.

lf for any reason the appointment of the Adjudicator is not agreed at the latest
within 14 days of the reference of a dispute in accordance with these Rules,
then either Party may appM with a copy of the apptication to the other party, to
any appointing authority named in the Contract or, if none, to the president of
FIDIC or his nominee, to appoint an Adjudicator, and such appointment shall be

fnal and conclusive.

The Adjudicator's appointment may be terminated by mutual agreement of the
Parties. The Adjudicator's appointrnent sha,l expire when the Works have been

completed or when any disputes rofened to the Adjudicator shall have been
withdravm or decided, whichever is the later.

Terms of Appointment

The Adjudicator is to be, and is to remain throughout his appointment, impartial

and independent of the Parties and shall immediately disclose in writing to the
Parties anything of which he becomes aware which could affect his impartiality

or independence.

The Ad.iudicator shall not give advice to the Parties or their representatives
concerning the conduct of the project of which the Works form part othdr than
in accordance with these Rules.

8
9

The Adjudicator shall not be called as a witness by the Parties to give evidence
conceming any dispute in connection with, or arising out of, the Contract.

The Adjudicator shall treat the details of the Contract and all activities and
hearings of the Adjudicator as confidential and shall not disclose the same
without the prior written consent of the Parties. The Adiudicator shall not,
without the consent of the Parties, assign or delegate any of his work under
these Rules or engage legal or technical assistance.

10

The Adjudicator may resign by gMng 28 days' notice to the Parties. ln the event
of resignation, death or incapacity, termination or a failure or refusal to perform

the duties of Adjudicator under these Rules, the Parties shall agree upon a
replacement Adjudicator within 14 days or Rule 4 shall apply.
Rles fo. Adiudicatixr

FrDrc

19s9

The Parties shall jointly ensure the appointment of the Adjudicator. The

Appointment of
Adiudicator

The Adjudicator shall in no circumstances be liable for any claims for anything
done or omitted in the discharge of the Adiudicator's duties unless the act or
omission is shown to have been in bad faith.

12

lf the Adjudicator shall knowingly breach any of the provisions of Rule 6 or act
in bad faith, he shall not be entitled to any fees or expenses hereunder and shall
reimburse each of the Parties for any fees and expenses properly paid to him

if, as a consequence of such breach any procoedings or decisions of the

Adjudicator are rendered void or ineffective.

Payment

13

The Adjudicator shall be pajd the fees and expenses set out in the Adiudicator's
Agreement.

14

The retainer fee, if applicable, shall be payment in full for:

(a)
(b)
(c)
15

being available, on 28 days' notice, for all hearings and Site visits;
all office overhead expenses such as secretarial services, photocopying
and office supplies incuned in connection with his duties;
all seMces performed hereunder except those performed during the
days refened to in Rule 15.

The daily fee shall be payable for each woking day preparing for or attending
Site visits or hearings or preparing decisions including any associated travelling
time.

16

The retainer and daily fees shall remaln fixed for the period of tenure of the
Adjudicator.

17

All payments to the Adjudicator shall be made by the Contractor who will be
pay
entitled to be reimbursed half by the Employer. The Contractor shall
invoices
The
Adjudicator's
receipt.
28
days
of
invoices addressed to him within
for any monthly retainer shall be submitted quarterly in advance and invoices
for daily fees and expenses shall be submitted lollowing the conclusion of a Site
visit or hearing. All invoices shall contain a brief description of the activities
performed during the relevant period. The Adjudicator may suspend worl< if any
invoice remains unpaid at the expiry ot the period for payment, provided that 7
days prior notice has been given to both Parties.

Procedure lor Obtaining

Adiudicator's Decision

18

lf the Contractor fails to pay an invoice addressed to it, the Employer shall be
entitled to pay the sum due to the Adjudicator and recover the sum paid from
the Contractor.

'19

A dispute between the Parties may be refened in writing by either Party to the
Adjudicator for his decision, with a copy to the other Party. lf the Adjudicator
has not been agreed or appointed, the dispute shall be refened in writing to the
other Party, together with a proposal for the appointment of an Adjudicator' A
reference shall identify the dispute and refer to these Bules.

20

The Adjudicator may decide to visit the Site. The Adjudicator may decide to

conduct

a hearing in which event he shall decide on the date, place

and

duration for the hearing- The Adjudicator may request that written statements
from the Parties be presented to him prior to, at or after the heaing. The Parties
shall promptly provide the Adiudicator with sufficient copies of any
documentation and inlormation relevant 10 the Contract that he may request'
0 D01999

Strort Form of Contract

decide upon the Adjudicator's own jurisdiction, and as to the scope of

any dispute refened to him,
make use of his own specialist knowledge, if any,
adopt an inquisitorial procedure,

decide upon the payment of interest in accordance with the Contract,

open up, review and revise any opinion, instruction, determination,
certmcate or valuation, related to the dispute,
refuse admission to hearings to any persons other than the Employer,
the Contractor and their respective representatives, and to proceed in
the absence of any Party who the Adjudicator is satisfied received notice
of the hearing.

No later than the ffty-sixth day after the day on which the Adjudicator received
a reference or, if later, the day on which the Adjudicator,s Agreement came into
effect, the Adjudicator shall give written notice of his decision to the parties.
Such decision shall include reasons and state that it is given under these Rules.

Bubs tor Adjudicatih

O F101C 1999

All communlcations between either of the parties and the Adjudicator and all
hearings shall be in the language of the Adjudicator's Agreement. All such
communications shall be copied to the other party.

The Adjudicator shall act as an impartial expert, not as an arbitrator, and shall
have full authority to conduct any hearing as he thinks fit, not being bound by
any rules or procedures other than those set out herein. Withod limiting the
foregoing, the Adjudicator shall have power to:

Adjudicator's Agreement

ldentncatiOn Of Prolect

lthe Prolect )

Narne and address ofthe Employeri

(the 'Employe")
Name and address of Contractor:

he COntractor

Nalne and address of Adludicator

he Adludicator

Whereas the Employer and the Contractor have entered into a contract(

the

Contracti)fOrthe execution ofthe Prolect and wish to appOint the Adludicator to act
as adludicatorin accordance wth the Rules for Adludication rthe Rules 1

The Emp:oyet Contractor and AttudiCator agree as fo ows:

l

l he Rules and the dispme prOvisions of the Contract sha forrn part of thiS

Agreement
2

T he Adludicator sh l be pald:

A retainer fee of

per calendar month

(where applicable)
A daily fee of

Expenses (including the cost of telephone calls, courier charges, faxes and
telexes incuned in connection with his dutiesi all reasonable and necessary
travel expenses, hotel accommodation and subsistence and other direct travel
expenses).

Receipts will be requared for all expenses.

iv

FlDrc lgsg

{iar

SIGNED BY

for and on behalf of the Employer in the presence of

Witness

---

SIGNED BY

for and on behatf of the Contractor in the prosence of

Witness

=--

SIGNED BY

for and on behaf of the Adjudicator in the presence of

Witness

O F1010 1999

The language of thls Agreement shall be

This Agreement shall be governed by the law of

has disclosed to the Parties any previous or existing relationship with the
Parties or others concerned with the Proiect.

The Adjudicator agrees to act as adjudicator in accordance with the Rules and

AGREEMENT

GENERAL CONDiT10NS

SHORT FORM of Contract

PARTICULAR CONDIT!ONS

RULES FOR AD UDiCAT:ON

Notes for Guidance

First Edtion 1999

NOTES FOR GU:DANCE

FEDERAON lNTERNA ONALE DES iNGENIEURS CONSE!LS

INTERNAnONAL FEDERAT10N OF CONSUL NG ENGlNEERS

INTERNAT10NALE VEREINIGUNG BERATENDER INGENlEURE
FEDERAC10N!N ERNAC10NAL DEINGENIEROS CONSULTORES

(not forming part of the Contract)

General

The objective of this Contract is to express in clear and simple terms traditional
procurement concepts. The C,ontract is intended to be suitable for works of simple
content and short duration. lf it is required that the Contractor should undertake
design, this is also provided for.
There are no Particular Conditions, afthough these Notes contain alternative wording

for consideration in particular circumstances. All necessary additional information is

intended to be provided in the Appendix.
A single document is proposed for the form of tender and the agreement. This reffects
the simple projects envisaged.
One resutt of the simple form of Contract is that there is an increased burden on the
Employer to set olrt in the Specification and Drawings the full scope of works,
including the extent of any design to be done by the Contractor.
There is no Engineer or Employer's Representative in the formal sense used in some

other FIDIC Conditions. The Employer takes all necessary actions. However, the
Employer must nominate his authorised spokesman and, if he wishes to engage a
consultant to administer the Contract, may appoint a representative with specilic
delegated duties and authority. The Contractor also nominates a representative.

The Conditions contain no overall limit on the Contractor's liability. lf such a limit is
required, a Clause should be inserted in the Particular Conditions.

Agreement

The printed form envisages a simple procedure of offer and acceptance. ln order to
avoid the traps and uncertainties that sunound 'letters of acceptance' and 'letters ol
intent', it was thought preferable to promote a clear and unambiguous practic'e.
It is intended that the Employer will write in the Employer's name in the Agreement
and fill in the Appendix where appopriate and send two copiqs to tenderers together
with the Specificalion, Drawings etc forming the tender package. ln respct of both
copies, the Contractor is to complete, sign and date the Offer section and complete
any remaining spaces in the Appendix. Having decided which tender to accept, the
Employer signs the Acceptance section of both copies and returns one copy to the
Contractor. The Contract comes into effect upon receipt by the Contractor of his copy.

lf post-tender negotiations are permitted and changes in specification or price are

agreed, then the form can still be used after the Parties have made and initialled the
appropriate changes to thek respective documents. The Contractor thus makes a
revised offer in rosponse to the Employer's revised tender documents and the revised
offer is accepted by the Employer signing and returning the Acceptance form. lf the
changes are extensive, a new form of Agreement should be completed by the Parties.
Notes for Guiclance

FrDrc

r9s9

Notes for Guidance

-l

As the Contract comes into effect upon receipt of the signed Acceptance by the
contractor, the Employer should take steps to establish when receipt occurs, for
example by requiring the Contractor to collect and sign for the Agreement'
Vvhen the applicable law imposes any form of tax such as VAT on the Works' the

Employer should make clear whether tenderers should include such taxes in their
prices. Similarly, if payment is to be made in whole or in part in a cunency other than
ih" crn"n"y of the Country the Employer should make this clear to tenderers' See
Sub-Clause

Appendix

11

.7.

Any Notes for Guidance on the completion of the Appendix are to be found in the
Notes to the Clauses concerned. The Employer should complete the Appendx as
indicated prior to inviting tenders. Tenderers may be asked to insert a Time for
Completion at 1.1.9 ff none is specffied. Vvhere tenderers are required to submit
design with their tenders, the documents contalning the tendered design should be
identifed by the tenderer against item 1 .1 .1 (0 of the Appendix.

A number of suggestions have been made in the Appendix' such as the time for

submission of the Contractor's programme under Sub-Clause 7'2 and the amount of
retention under sub-clause 1 1 .3. lf these suggestions are adopted by the Employer,
no action is required. Otherwise' they should be deleted and replaced'

Definitions. The definitions in these Conditions are not all the same as
those to be found in other FIDIC Contracts. This is as a resutt of the need
for simplicity in Conditions of this sort. Significantly different definitions

General Provisions

include Commencement Date, Site, Variation and Works.

1..1.1

"Contract'. The list of documents serves two purposes: firstly' to identify

which documents form part of the Contract; and secondly, to provide an
order of priority in the event of conflict between them.
Docurnent identification is necessary to avoid any possible doubt, for example
because specmcations have been sub.iect to revisions A complete list of
Drawings is always desirable and could be attached on a separate sheet'

There is no need for Particular Conditions but if amendments to these

Conditions are required, they should be inserted on the sheet headed
Particular Conditions and given priority over the General Conditions lf none,
delete the reference.

The Specification should set out in clear terms any design that the
Contractor is required to undertake, iraluding the extent to which any
design proposals are to be submitted with the tender. lf none, the reference
to the Contractor's teMered design should be deleted.

the reference.

lf a letter of acceptance is used, it should be given high priority, with or in

place of the Agreement, for example.
Short Form of Contract

O FIDC 19"

lf there are additional documents which are required to form part of the
Contract, such as schedules of information provided by the Contractor'
these should be added by the Employer. Consideration should be given in
each case to the required priority.

lf there is no bill of quantities, delete

-Commencement Date'. The starting date for the Contract is 14

days after
the date when the Contractor receives the Agreement signed by the
Employe( unless the Parties agree otheMise.

1.1

.14

'Force Majeure' may include, but is not limited to, exceptional events or
circumstances of the kind listed below, so long as all of the four conditions
stated in the definition have been satisfied:

.7

1 .1

b)

c)

e)

rebellion, terrorism, revolution, insunection, military or usurped

power, or civil war,
not, commotion, disorder, strike or lockorrt by persons other than the
Contractor's personnel and other employees,

munitions

of war, explosive

materials, ionising radiation or

contamination by radioactivity, except as may be attributable to the

Contractor's use of Such munitions, explosives, radiation or radioactivity, and

natural catastrophes such as earthquake, hurricane, typhoon or

volcanic activity.

1.1.19

"Works'. The term 'Works" is intended to cover all the obligations of the
Contractor, including any design and the remedying of defects.

1.5

1.6

Communications. The problem of languages is addressed by requiring the

important @mmunications such as notices and instructions to be in the
language stated in the Appendix. OtheMise there is no .Ruling Language,.
Any arbitration will be conducted in the specmed language.

Changes to the law after the date of the Contractor,s offer are at the
Employer's risk and any delay or additional cost are recoverable by the
Contractor. f the law of the Contract is not the law of the Country then SubClause 6.1 should be changed in the particular Conditions.

The Employer

21

Unless the Parties have agrced otherwise, the Site must be handed over by
the Employer to the Contractor on the Commencement Date. This is 14

days after the Contract has come into effect, which occurs when the signed
Agreement has been retumed by the Employer to the Contractor (see also
Sub-Clause 1 .1 .7 above).

22

lf for any reason, permrts etc may also be required from places other than
the Country this Sub-Clause could be limited by the addition at the end of
the words:

'... in the Country but not elsewhere.'

24

The term 'approval' is only used in the Conditions in relation to the

performance scurity at Sub-Clause 4.4 and insurances at Sub-Clause
14.1. lt is important that risks such as those of poor workmanship or
Contractor's design are not transfened to the Employer unintentionally. The
Sub-Clause is intended to prevent argument.

Employer's
Bepresentatives

Notes for Guidahce

O F10 C 1999

Two principles guided the drafting of this Ctause. Firsfly, the Contractor
should know who in an Employer organisation is authonsed to speak and

war, hostilities (whether war be declared or not), invasion, act of

foreign enemies,

a)

act for the Employer at any gven time. This is achieved by Sub-Clause 3'1:
the authorised indvidual should be named in the Appendix'

Secondly, those Employers who require professional assistance should not

be discouraged from doing so and their consuttant should have clearly

established delegaied powers. This is the object of Sub-Clause 3'2' Once

appointed, the Employer's representative acts for and in the interests of the

is no dual role or duty to be impartial lf an impartial

Employer's Representative is required with a role similar to the traditional
Enginee( then the following words could be used in the Particular
Emptoyer. There

Conditions:

'Replace the final sentence of Sub-Clause 3.2 with the following: 'The
Emptoyer's Representative shalt exercise in a fai and impaftial manner
the powers of the Employer under or in connection with the following
Sub-Aau*s: 1.3,2.3, 4-2,4.3' 5.1, 7.3' 8.2,9'1,9'2, 10'1' 10'2, 1O'5'
11.1 to 11.6, 11.8, 12.1 , 13.2 and 14.1.'
To the extent that the Employer has delegated powers to an Employer's
powers himself in
representative, he should be careful not to exercise such
etc'
decisions
instructions,
order to avoid the risk ol conflicting

The Contractor

41

Most contracts do not specily the exact standard required for each element

of the Works, so some benchmark standard is needed with which the

Contractor is to comply. lf a more specific set of standards could be refened
to for a particular project, then an amendment in the Particular Conditions
would be desirable.

44

(surety
Performance Security. Suggested forms of performance bond
bond) or bank guarantee have not been provided. lf it is felt that the scale
of project warrants security by means of a bond, then local commercial
practice should dictate the form. Example forms are included with FIDIC'S
to
bonditions of Contract for Construction. The amount and a reference
in
the
the desired form of any required security should be set oui
Appendix.

Design by Contractor

5.1

As with ali design-build contracts it is essential that the Employer's

requirements are set out clearly and precisely. The Appendix should indicate

to ienderers the Sub-Clause(s) in the Speciication that set out the design
requiremenl. Where the Employer procures any part of the design' the
rosponsibility for design will be shared as this Contract makes the
Contractor responsible only for design prepared by him' The extent of the
Contractor's design obligation should therefore be clearty stated if disputes
are to be avoided. The Conditions avoid the confusing concept of approval
of design. Designs are submitted and may b returned with comments or
rejected. The Employer need not react at all.

5.2

tv

The Contractor's responsibility for his design remains, as is made clear here

and in Sub-Clause 2.4. ln the event of conflict betlveen the Specification

and Drawings and the Contractor's tendered design, the order of priority in
the Appendix makes it clear that the Employer's documents prevail This
means that if the Employer prefers the Contractor's tendered solution, the
Specification and Drawings should be amended before the Contract is
signed bY the Parties.
Short Fo.m of Coflvacl

the Works designed by him are fit for their purpose, provided that the
intended purposes are deined in the Contract. The Employer must
therefore make cloar in the parts of the Specification that impose design

not.
lf a party wishes to protect the intellectual property in his design, provision
must be made in the Particular Conditions.

61

This Sub-Clause gathers together in one place the grounds for extension of

time under Sub-Clause 7.3 and the grounds for claims under Sub-Clause
10.4. There is no time or claim for bad weather although this could be
adjusted in the Particular Conditions if so required.

Time for Completion

72

The Appendix should stipulate any particular requirements as to the form

and level of detail of prograrme to be submitted. Where Contractor's
design is required, the Appendix could stipulate that the programme should
show the dates on which it is intended to prepare and submit drawings etc.

Taking-Over

73

The test for entitlement to an eltension of time is whether it is appropriale.

This means that if an event under Sub-Clause 6.1 caused critical delay to
the Works and it is fak and reasonable to grant an extension of time, the
Employer should do so. An extension of time should not be granted to the
extent that any failure by the Contractor to give an early warning notice
under Sub-Clause 10.3 contributed to the delay.

74

There is a maximum amount which the Contractor is liable to pay for late
completion specified in the Appendix. 107o of the sum stated in the
Agreement is suggested.

82

ln line with normal practice, it is not envisaged that the Worl<s need be
100% complete before the Employer may take over. Once the Works are
ready to be used for their intended purpose, the notice should be given.
There is no provision for taking-over of only parts of the WorlG but if this is
required, provision should be made in the Particular Conditions.
lf any tests are required to be completed prior to taking-over, these should
be specified in the Specification. The definition of Works is broad enough to
include any such tests.

Remedying Defects

9.1

There is no defined Defects Uability Period but during the period - normally

12 months - from the date of taking-over, the Employer may notify the
Contractor of defects. The Contractor must remedy such defects within a
reasonable time. lf he fails to do so, the Employer may employ others for
that purpose at the Contractor's cost. The Employer may also notii/ defects
at any time prior to taking-over.
The liability of the Contractor for defects will not normally end with the expiry
of the period stated in the Appendix. Although he is then no longor obliged
Notes for Guijance

O FDC,

Employer's Liabilities

obligations, the intended purposes of the part of the Works to be designed

by the Contractor. This should be done even where this seems obvious in
order to avoid argument about whether an intended purpose is defined or

The C,ontractor will have an absolute obligation to ensure that the parts of

to return to Site to remedy defects, the defect represents a breach of

contract for which the Contractor is liable in damages. This liability remains
for as long as the law of the Contract stipulates, often 3, 6 or 10 years from
the date of the breach. lf this long-term liability is to be reduced or
eliminated, a Clause in the Particular Conditions is required.

Variations and Claims

10.1

Vanation is delined to include any change to the Specification or Drawings

included in the Contract. lf the Employer requires a change to part of the

Works designed by the Contractor either as part of his tender or after the
Contract was awarded, then this is to be done by way of an addition to the
Specification or Drawings which by Sub-Clause 5.2 will prevail over

funtractor's design.
1A.2

This Sub-Clause sets out alternative procedures for the valuation of

Variations, to be applied in the order of priority given. lt applies equally to
omissions as to additional works.

A lump sum should be the first method to be considered as it can

encompass the true cost of a Variation and avoid subsequent
dispute over the indirect effect. The Employer can invite the

b)
c)
d)
e)

10.3

Contract Price and

Payment

Contractor to submit an itemised make-up (Sub-Clause 10.5) before

instructing the Variation so that an agreed lump sum can form part
of the instruction.
Alternatively, a more traditional approach can be taken by valuing the
Variation at rates in ihe bill of quantrties and any schedules, or
using these rates as a basis, or
using new rates.

Daywork rates are normally used when the Variation is of an

indeterminate nature or is otJt of sequence with the remaining Works'

To ensure reasonable daywork rates, provision should be made for
these to be priced competitively in the tender documents'

This Sub-Clause and Sub-Clause 10.5 require the Contractor to notify the
Employer of events promptly and to detail any claim within 28 days' lf the
effects of the event are increased or if the ability of the Employer to verify any
claim is affected by the failure to notrry, then the Employer is protected'

Normally only one of the options In the Appendix should be used to indicate

1.1

how the sum in the offer is be calculated and presented. The following
explains what is intended:
Lump sum pnce

A lump sum offer without any supporting details.

This would be used for very minor works where
Variations are not anticipated and the Works will
be completed in a short period requiring only one
payment to the Contractor.

Lump sum Pdce with

schedule of rates

A lump sum offer supported by schedules

of

rates prepared by the tenderer. This would be a

larger contraci where Variations and stage
payments would be required. lf the Employer
does not have the resources to prepare his own
bill oi quantities then this alternative would be
suitable-

Vl

O FIDIC 19"

Sho.t Form of Contract

Lump sum pnce wth

of quantlies

A lump sum offer based on bill of

quantities

prepared by the Employer. This would be the

same as last but where the Employer has the
resources to prepare his own bill of quantities. A
better contract would result with an Employer's
bill of quantities.

A sum subject to remeasurement at the rates

offered by the tenderer in the bill of quantities
prepared by the Employer. This would be the
same as last but would suit a contract where
many changes are envisaged to the Works after

Remeasurement with
bill of quantities

the Contract has been awarded.

by the tenderer which will

be replaced by the actual cost of the Works

An estimate prepared

calculated in accordance with the terms set by

the Employer. This would suit a project where the
extent of work cannot be ascertained before the
Contract is placed. An example of this woutd be

an emergency reconstruction of

building

damaged by fire.

However, if for some special reason, more than one option is selected, for
example there is a remeasureable element in a lump sum Contract, then the
details should b carefully defned.

The Foreword indicates that this Short Form of Contract is intended for

works of short duration. ln the event of a contract for works of long duration,
a new clause could be inserted at Sub-Clause 1 1 .1 to adjust for the rise and
fall in the cost of labour, materials and other imports to the Works. Such a
clause could be adapted from the other FIDIC C,onditions of Contract.

112

lf the Contract is for a lump sum, consideration should be given as to how

the work is to be valued for the purposes of interim payments. ln completing

the Appendix for Sub-Clause 1'1.1, the Employer may request tenderers to

submit a cash flow forecast linked to a stage payment proposal for

agreement. This would be reviewed in the event of an extension of time
made in accordance with Sub-Clause 7.3.
Altematively, interim payment can be based on valuation of the Work6 which

would also be appropriate for remeasurement and cost reimbursable

Contracts. Payment could also be based on the achievement of milestones
or a schedule of activities to which values are assigned.
lf local law or practice so dictates, an invoice may also be required, in which
case it could be submitted with the staternent.

113

No provision is made for advance payments. lf such a payment is to be

made, there should be provision in the Particular Conditions and for any
scurity to be provided by the Contractor. An example form of advance
payment guarantee is to be found in FIDIC'S Conditions of Contract for
Construction.

11 4

The deduction of etenlon is sometimes replaced by the prov siOn of

s unty by the Contractorto the Emp10yen Aternativev the enlre retentbn

Noles lor Guidance

0 DIC 1999

Cost reimbursable

sum deducted is released after taking-over upon the proMsion by the

Contractor of security. ln either event, suitable text would be required in the
Particular Condhions. An example form of retention guarantee is to be found
in FIDIC's Conditions of Contract for Construction.
1'1.5

11

.7

12.'l

Defauit

The rdmse of the second patt oi the retention will serve as confirmation that
all notified defects have been remedied.

It is assumed that payments will O6 in a single cunency lf this is not the

case, the proportions of different cunencies should be stated in the
Appendix and provision made in the Specmcation or the Particular
Conditions as to how payment is to be made.

The Employer may terminate the Contract if the defaulting Contractor does
not respond to a formal notice by taking all practicable steps to pd right his
default. This recognises that not all defaults are capable of correction in 14
days. f rermination takes place, the Employer may take over and use the
Contractor's Equipment to complete the Works. Care should be taken,
howeve( if the equipment on Site is hired: no specmc provision is made to
cover this situation and the Employer is unlikely to be able to retain such
equipment.

12.2

This provision provrdes the Contractor's main remedy for non-payment T

days after the Employer's receipt of a deJautt notice, which must refer to
su-b-clause 12.2, he contractor may suspend all or part of his work' 21
days later the option to terminate arises if the Employer persists with nonpayment or other defautt. The Contractor must use his right to terminate
*,itnin Zt days or lose it. This is to prevent a party abusing a right to
project'
terminate in his dealings with the other party for the remainder of the
lf Contractor's Equipment is essential for the safety or stability of the Works,

the Employer will be obliged to agree terms with the Contractor for the
retention of such equipment. Local law will often protect the Employer from
the immediate and reckless removal of essential items.

The right of the Employer to retain the Contractor's Equipment may clash
with the right of a Iiquidator or receivei to realise the assets of an insolvent
Contractor. Reference to the applicable law would be necessary

12.4

This Sub-Clause enables the financial aspects of the Contract to be iesofued

quickly and without the necessity to await the completion of the Works by
others. By speciting the damages payable to the innocent party for the
defautts leading to the termination, much delay, complication and scope for

12.3

a replacement
loss
of proft'
than
the
Contractor's
generally
higher
be
contractor will
dispute are avoided. The Employer's costs in obtaining

Responsibility

13.1

Although the Contractor is responslble for the Works prior to taking-over, he

is protected by the obligation to insure the Works under Clause 14 and by
his ability to recover under Clause 6 his Cost if one of the Employer's

Risk and

Uabilrties occurs.

To qualify as Force lvlajeure, events must prevent performance of an

obligation. See also the definition at Sub-Clause 1.1.14. Notice must be
given at once.

O FOIC l

Short Form ol

Cmtr*l

13.2

Employer should set out his precie requirements in the Appendix. Third
Party, public liability insurance would normally be mandatory. As smaller
contracts are likely to fall within tenderers' standing Contractors' All Risk
(CAR) insurance policies, tenderers should generally be asked to submit
details of their insurance cover with their tenders.

lhe

should be covercd by Particular Conditions. See also Clause 13.

tf the Employer wishes to take out the insurances instead of the Contractor,

the following should be used as a Particular Condition in place of SubClause 14.1

be

Sub-Clauses 14.2 and 14.3 should be deleted

if

the Employer takes out the

insurances.

It should be noted thal in the event of the Employer's failure to insure, the
Contractor may give notice under Sub-Clause 12.2.

Disputes

15,1

There are advantages in appointing an adiudicator from the outset even

though the adjudicator may not be requircd to take any action or earn any
fee unless and until a dispute is refened to him. Delays will inevitably occur
if the parties initiate the procedure to appoint an adjudicator only when a
dispute has arisen. tt is therefore recommended that the Employer propose
a person to act as adjudicator either at tender stage or shortly after the
Agreement is signed and that the matter is discussed and agreed as soon
as possible.
Care should be taken about whether ari adjudicator should be local or from
a neutral country Atthough the adjudicator should be impartial, the costs of
employing someone from a third country could be disproportionate if it is
necessary for the adjudicator to visit or if a hearing became nec'essary.
However, in view of the costs involved in arbitration, even of minor disputes,
any extra cost of a truly impartial ad.iudicator is a recommended investment.

tt is intended that all decisions made by the Employer or his representative

should be capable of being reviewed by an adiudicator and, if required, by
an arbitrator.

153

Arlcitration may not be commenced unless the dispute has frst been the
subject of an ad.ludication. The Rules of arbitration should be stipulated in

the Appendix. The UNCrI-RAL Rules are recommended. However, if

administered arbitration is required, that is arbitration overseen and
administered by an arbitral institrrtion, the ICC Rules could be specifled. The
ICC Court of Abitration and its Secretariat in Paris appoints and replaces
arlcitrators, checks the form of terms of reference and awards and generally
mon ors progress and the perfomance of arblrators Where atternative
Noles lor Gu darce

O OC 1999

:X

"Replace the text of Sub-Clause.14.1 with the following: 'The Employer

shall, prior
the Comffiencement Date, effect insurance in the joint
names of the Parties of the types, in the amounts and with the exclusions
stipulatd in tlle Appendk. The Employer sl@il provide the Contmctor
with eidence that any rquhed policy is in force and that the premiums
paid."
have

Resolution of

Any requirements for insurance after the date of the Employer's notice
under Sub-Clause 8.2, or arising from taking-over parts of the Works,

141

lnsurance

appointment should be changed to reflect this. For example, if ICC Rules are
chosen, then the appointing atrthority should normally be changed to 'lCC
Court of tubitration'. The place of arbitration is significant as the arlcitration
law of the place of arbitration will appty in such matters as the ability of a
party to appeal.

an arbitrator, the authority designated in the Appendix to make the

arbrtration rules are chosen that include a procedure for the appointment of

0 DC 199Q

Shorl Fo(m ol Contract

FIDIC
!nternational Federation of Consulting Engineers(F:DIC)
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Switzedand

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ll

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1215 GENEVA 15
Switzedand

Telephone: +41 227994900

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