FORM OF

AGREEMENT

FIDIC 1999

The FIDIC contract provide a central role for the

Engineer in the certification process - in other
contracts is performed by a role described as the
Superintendent, Architect or similar.
Any project specific amendments to FIDIC General
Conditions must be detailed in the Particular
Conditions. This ensures that any changes that are
made to the standard conditions are obvious.

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DESCRIPTION

Sub-clause 3.1, The Engineers

Duties
and Authority

whenever carrying out duties or

exercising authority, specified in
or implied by the Contract, the
Engineer shall be deemed to act
for the Employer.

Clause 10 Employers Taking

Over

Sub-clause 10.2- the engineer,

with the permission of the
employer, may issue a taking-over
certificate for any part of the
permanent works.

Sub-clause 11.3 Defects

Liability

the employer is entitled to an

extension of the defects
notification period for the works as
a whole or for a section of
the works (If damaged and
defective).
Maximum extension period is 2

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DESCRIPTION

Sub-clause 14.8 Delayed

Payment

If employers fail to make payment

within timescale, Contractors will
be entitled to recover his financing
charges at annual rate of 3% and
compounded monthly.

Clause 16 Suspension and

Termination by Contractor

Contractor is entitled to suspend

the work if the engineer fails to
issue interim payment certificates
or if the employer has Financial
Arrangements problems.

Clause 17.3 Employers risk

Losses due to war, hostilities,

invasion, act of foreign enemies,
rebellion, terrorism, riot,
commotion or disorder within the
Country by persons other than the
Contractors Personnel, are to be
borne by employer.

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DESCRIPTION

Sub-clause 17.6 Limitation to

Liability

Parties are not liable to each other.

To avoid inability to insure their
liabilities under the contract which
are not covered by insurance.

Sub-clauses 20.2 to 20.4

Appointment of the Dispute
Adjudication Board, Failure to
Agree DAB , Obtaining DAB
Decision

Dispute resolution mechanism

prior to an amicable settlement
procedure. Adjudication role of the
engineer is handed over to DAB.

Sub-clauses 20.5 to 20.8

Amicable Settlement,
Arbitration, Failure to Comply
with DAB Decision, Expiry of
DABs Appointment

If no notice of dissatisfaction with

DAB has been given by either
Party within 28 days, then decision
is final.
Else, both parties must settle
amicably or by international
arbitration

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MITIGATION

Clause 2.4
(Employers
Financial
Arrangements).
Contractor has the
right to request
reasonable
evidence that
financial
arrangements
have been made
and are being
maintained which
will enable the
employer to pay
the contract price

reasonable evidence
can be misinterpreted. If
the contractor
determines the evidence
is not reasonable,
contractor are entitled to
suspend the work.

Bring theDispute
Adjudication Board
(DAB) into play to
advise the contractor
whether or not the
evidence is
reasonable.

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RISK

MITIGATION

Sub-clause 1.12
requires the
contractor to
disclose
confidential as the
engineer may
reasonably require
in order to verify
the contractors
compliance with
the contract.

Contractors may have

duty of confidentiality to
a 3rd party

Parties should
discuss this matter
prior to the contract
signature and agree
on the extent of the
privileged
information

Clause 5.2 states

indemnify the
contractor against
and from any
negligence or
misuse of goods

Goods isnt defined, so

what is insured against?
What would be the limit?

There should be clear

clauses to define
goods or any other
vague terms

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Sub-clause 17.1 ,
the term
employers risks

RISK
Risks are not properly
defined.

Clause 18 the term At times, it may be

insuring party
defined as either 2
parties or both.
Confusion might arise in
combined insurance

MITIGATION
Risks should be
replaced with
Employers risks of
loss and damage
since risks are more
confined to
accidental
loss/damage to
physical property
which in turn would
lead to financial and
time loss risks
Prior to agreement of
contract, each party
should be clearly
defined

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MITIGATION

sub-clause 3.5 The

Engineer shall
proceed in
accordance with this
Sub-Clause 3.5 to
agree or determine
any matter. If
agreement is not
achieved, the
Engineer shall make
a fair determination

Precise meaning of fair

determination is not
stated. Decisions made
can be lopsided to
parties involved.

Specify fair
determination in the
contract. (i.e. fair to
both parties)