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Short Form Con: Agreement General Conditions Rules For Adjudication Notes For Guidance
Short Form Con: Agreement General Conditions Rules For Adjudication Notes For Guidance
FIDIC
goals: maintenanc
views and informatio
Published by
FM6ration Internationale des Ing6nieurs-Conseils (FIDIC)
P.O. Box 86
No part of this publication
may be reproduced
or transmitted in any form
or by any means without
permission of the publisher.
CH-1000 Lausanne 12
Switzerland
Phone
+41 21 654 44 11
FaX
+41 21 653 54 32
E-mail
fidic@pobox.com
www
http://w.fidic.org
0 FlDlC 1999
._
____
AGREEMENT
A
m
D,C
ACKNOWLEDGEMENTS
The Federation lnternationale des Ingknieurs-Conseils (F
thanks to the following members of its Task Group: P
Group Leader), WS Atkins, UK; AEJ (Tony)
Edward Corbett, Corbett & CO, UK. Liaison with
provided by Peter L Booen, GIB6 Ltd, UK.
The preparation was carried out under th
Engineer, UK; Michael Mortimer-Hawkins,
Jaeger, Schmidt Reuter Partner, Germa
Adviser), Consulting Engineer, UK.
Drafts were commented on by the foll
Ahmad, NESPAK, Pakistan; Peter
Bunni, Consulting Engineer,
Industry Authority of the Phili
Asea Brown Boveri Ltd, S
Hawker, Consulting Engin
Wijers, DHV Beheer
Poland; J G Rees,
n of the FlDlC
Sweden; Axel-Volkmar
(Tony) Norris (Special
its appreciation of the time and effort devoted by all the above.
the form and content of the document rests with FIDIC.
0 FlDlC 1999
FOREWORD
These Conditions of Contract have been prepared by the Fe
des Ingknieurs-Conseils (FIDIC) and are recommended for en
work of relatively small capital value. However, depend
circumstances, the Conditions may be suitable for con
considered most likely to be suitable for fairly simple o
duration without the need for specialist sub-contract
ons will together comprise the Conditions governing the rights and
tion of tenders.
8 FlDlC 1999
CONTENTS
Agreement .......... .........
.... i
Offer
Acceptance
Appendix
General Conditio
1
.............................
........................................
GENERAL PROVlSl
EEMPLOYER
.........................
.3
.....................................
,3
EMPLOYER'S REPRESENTATIVES
Authorised Person
Employer's Representative
THE CONTRACTOR
4.1
4.2
4.3
4.4
General Obligations
Contractor's Representative
Subcontracting
Performance Security
0 FlDlC 1999
DESIGN BY CONTRACTOR
5.1
5.2
Contractor's Design
Responsibility for Design
EMPLOYER'S LIABILITIES
6.1
Employer's Liabilities
7.1
7.2
7.3
7.4
TAKING-OVER
8.1
8.2
Completion
Taking-Over Notice
REMEDYING EFFECTS
9.1
9.2
Remedying Defect
...............................
.3
...............................
.4
................
.5
................... 5
.............
. . . . . . . . . . . . . . . . . . . . . . . . . .5
................................
10
10.1
10.2
10.3
10.4
10.5
Claim Procedure
11
thly Statements
..
...
.............7
,'
11.8
Delayed Payment
12
DEFAULT
12.1
12.2
12.3
12.4
Default by Contractor
Default by Employer
Insolvency
Payment upon Termination
13
13.1
13.2
0 FlDlC 1999
..........................................
. . . .8
..............................
.9
..........................................
14
INSURANCE
14.1
14.2
14.3
Extent of Cover
Arrangements
Failure to Insure
15
RESOLUTION OF DISPUTES
15.1
15.2
15.3
Adjudication
Notice of Dissatisfaction
Arbitration
INDEX
.....................
Particular Conditions
Notes for
... 10
..ll
. . . . . . . . . . . . . . . . . ......... . . . .
.9
13
....................
15
. . . . . . . .....................
21
..................................31
8 FlDlC 1999
1
.
OFFER
ndix which forms part of this
the Contract for the sum of
UJ
0
4-
as
Date:
Signature: .
. .
._
EPTANCE
e Employer has by signing below, accepted the Contractor's offer and agrees that in
when the Contractor receives one original of this document signed by the Employer.
"
Signature: -~
___
Name:
- -.
Capacity:
Q FlDlC 1999
_.
- --
Date:
..
--
. .- -.-
- .-
- - -- -
APPENDIX
6%
I Note: with the exception of the items for which the Empolyer)Q?gl&pmdnst
have
Sub-clause Data
Item
-_--
bA
Documents forming the Contract
listed in the order of priority . . .
1.1.1
(9)
(h)
The Agreement . . . . . . . .
Particular Conditions . ,
General Conditions . . .
The Specification
The Drawings . . .
The Contractor's te
design
The bill of quan
...
Identification
. . . .
.
-.
1.1.9
W
. . . . . . . . . 1.4
....
...
.-
. . . .
. -. .
-.
days
..........
3.1
.....
.....
thorised person
. . . . . . . . . . . . . . . . 4.4 . . . . .
Amount
Form
..................
4.4
.....
(details)
ii
Sub-clause
-
Data
--
.....
Programme:
I
Form of programme
$
.
.....
7.2
7.2 . . . . l \ h
__
Amount payable due to failure to
complete . . . . . . . . . . . . . . . . .
per day up
of 10%* of sum
stated in the Agreement
7.4
Variation procedure
Daywork&\
10.2
.....
.-
.-
- . - --
..-
-..
-.
__
(details)
--
Valuation o
Lump su
. . . . . . . . . . . 11.1 . . . . .
(details)
................
(details)
11.1
.....
(details)
. . . . . . . . . 11.I . . . . .
(details)
(details)
.....
..............
iii
-.- -.
11.1
Cost reimbursable
-_
Materials
80%'
Plant
90%'
Item
Sub-clause
Percentage of retention . . . . . . .
11.3
Currency of payment
lnsurances
.....
. . . . . . . . . 11.7 . . . . .
.............
11.8
................
14.1
Rate of interest
Data
Type of cover*
.....
Amount of cover*
Full re
Arbitration
Rules
...
oo.
15.3
.........
Q FlDlC 1999
15.3
. . . . . The Country*
iv
General Conditions
Geniral Provisions
1.1
Definitions
6
50
'2
9
1
Persons
1.1.3
1.1.4
"Employer" means
successors in title t
Contractor) any a
1.1.5
i
but not (except with the consent of the
1.1.6
"P@e"3\
1.1.7
" C w e n t Date" means the date 14 days after the date the
Agree
omes into effect or any other date agreed between the Parties.
General Conditions
1.1.11
1.1.12
1.1.13
1.1.14
0 FlDlC I999
1.1.8
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.
1.1.15
"Materials" means things of all kinds (other than Plant) intended to form or
forming part of the permanent work.
1-2
_.
1.1.17
1.1.18
1-1.19
.. . . - -
__
.. .
--
y) to be performed by the
Interpretation
1.4
...---
. -
. . .-. - .- -. .--
Law
1.5
...
Communications
ontractor shall comply with the laws of the countries where activities are
med. The Contractor shall give all notices and pay all fees and other charges in
The Employer shall provide the Site and right of access thereto at the times stated in
the Appendix.
2.2
. ..
..
..... -. -
The Employer shall, if requested by the Contractor, assist him in applying for permits,
licences or approvals which are required for the Works.
0 FlDlC 1999
2.3
Employer's Instructions
The Contractor shall comply with all instructions given by the Employer in respect of
the Works including the suspension of all or part of the Works.
5
5
W
2.4
Approvals
er's Representatives
3.1
Authorised Person
Employer's
Representative
4.1
General Obligations
_.---
4.2
Contractor's
Representative
4.3
Subcontracting
part of the Works without the consent of the Employer.
.
4.4
_._
Performance Secur
The Contractor shall carry out design to the extent specified, as referred 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 submitted 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
General Conditions
8 FlOlC 1999
'II:
CI)
submitted to the Employer or where the design for that element has been rejected.
Design that has been rejected shall be promptly amended and resubmitted. The
Contractor shall resubmit all designs commented on taking these comments into
account as necessary.
5.2
6.1
Employer's Liabilities
c)
m)
n)
0)
p)
63 FlDlC 1999
I '
.i
for Completion
Ti
7.1
Execution of the Works
The Contractor shall commence the Works on the Commencement Date and shall
proceed expeditiously and without delay and shall complete the
for Completion.
7.2
Within the time stated in the Appendix, the Contractor
programme for the Works in the form stated in the
Programme
,
7.3
-.
..
Extension of Time
the Time for Completion if he is or will be
Liabilities.
c
7.4
.-
..
Late Completion
- -.
. -. .
- --
Ta
8.1
Completion
8.2
Taking-Over Notice
9.1
Remedying Defects
The Employer may at any time prior to the expiry of the period stated in the Appendix,
notify 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 workmanship not being in accordance with the Contract.
General Conditions
8 FlDlC 1999
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 Employer's notice shall entitle the Employer to carry out all
necessary work at the Contractor's cost.
I-
9.2
50
10.1
Right t o Vary
W
10.2
--
.-
Valuation of Variations
I?
3
8
a)
c)
in the absence of ap
the basis for valuatio
ontractor shall be entitled to the amount of such Cost. If as a result of any of the
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 giving rise to the
claim. The Employer shall check and if possible agree the value. In the absence of
agreement, the Employer shall determine the value.
0 FlDlC 1999
11
The Works shall be valued as provided for in the Appendix, subject to Clause 10.
- __
..
Monthly Statements
Iu o
Plant
Interim Payments
11.4
11.5
of Retention
11.6
6@*
@8
Final Payment
11.7
days of the latest of the events listed in Sub-clause 11.5 above, the
ctor shall submit a final account to the Employer together with any
docu entation reasonably required to enable the Employer to ascertain the final
ontfact value.
Within 28 days after the submission of this final account, the Employer shall pay to the
Contractor any amount due. If the Employer disagrees with any part of the
Contractor's final account, he shall specify his reasons for disagreement when making
payment.
Currency
11.8
The remainder
shall be paid by the Employer to the Contractor within
r either the expiry of the period stated in the Appendix, or the remedying
of notif
days&
efects or the completion of outstanding work, all as referred to in Subhever is the later.
Delayed Payment
The Contractor shall be entitled to interest at the rate stated in the Appendix for each
day the Employer fails to pay beyond the prescribed payment period.
General Conditions
Q FlDlC 1999
lJ2
I
Def
12.1
Default by Contractor
---1
If the Contractor abandons the Works, refuses or fails to comply with a valid
Default by Employer
W
12.3
under any applicable law, the other Party may by notice
iately. The Contractor shall then demobilise from the Site
case of the Contractor's insolvency, any Contractor's
mployer instructs in the notice is to be used until the
Insolvency
12.4
Payment upon
Termination
&:;
d)
The net balance due shall be paid or repaid within 28 days of the notice of
termination.
Cl FlDlC 1999
I?
Ris atl_)Responsibility
13.1
Contractor's Care of the
Works
The Contractor shall take full responsibility for the care of the Works from the
Commencement Date until the date of the Employer's notice und
Responsibility shall then pass to the Employer. If any loss or
Works during the above period, the Contractor shall rectify
that the Works conform with the Contract.
Unless the loss or damage happens as a result of
Contractor shall indemnify the Employer, the Em
employees against all loss or damage happening to
or expense arising out of the Works caused by
negligence or by other default of the Contractormagents or employees.
13.2
Force Majeure
L-----
8
z
d9
U
14.1
Extent of Cover
e Contractor shall, prior to commencing the Works, effect and thereafter maintain
joint names of the Parties:
b)
c)
General Conditions
for loss and damage to the Works, Materials, Plant and the Contractor's
Equipment,
for liability of both Parties for loss, damage, death or injury to third parties or
their property arising 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 Employer's 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.
Q FlDlC 1999
- ..
14.2
Arrangements
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
Contractor shall provide the Employer with evidence that any required policy is in force
and that the premiums have been paid.
All payments received from insurers relating to loss or damage to the Works shall be
held jointly by the Parties and used for the repair of the loss
compensation for loss or damage that is not to be repaired.
1
14.3
Failure to Insure
z
0
O
2
a=l
AA
of Disputes
15.1
Adjudication
15.2
Notice of Dissatisfaction
\$
15.3
Arbitration
10
8 FlOlC 1999
INDEX OF SUB-CLAUSES
Adjudication
Approvals
Arbitration
Arrangements, Insurance
Authorised person
&@
.1
10
Page
3
10
10
Communications
Completion
Contractor's Care of the Works
Contractor's Design
Contractor's Representative
Currency
2
5
9
3
3
7
Default by Contractor
Default by Employer
Definitions
Delayed Payment
8
1
a
11.8
10.3
2.3
3.2
6.1
7.1
7.3
14.1
7
6
3
3
4
5
5
9
14.3
11.6
13.2
10
7
9
4.1
12.3
11.3
1.2
8
7
2
7.4
1.4
Monthly Statements
11.2
Notice of Dissatisfaction
15.2
10
12.4
4.4
2.2
1.3
8
3
2
2
Final P
terpretation
Late Completion
General Conditioils
sub-c1@
Q FlDlC 1999
11
J
7
i9
Programme
Provision of Site
Remedying Defects
Responsibility for Design
Retention, First Half
Retention, Second Half
Right to Claim
Right to Vary
-1
7.2
2.1
9.1
5.2
1 1.4
Statutory Obligations
Subcontracting
Taking-Over Notice
8.2
9.2
11.1
10.2
10.5
7
6
6
12
5
2
63 FlDlC 1999
Particular Conditions
Note
0 FlDlC 1999
13
i
IY
W
W
[r
&$i
(I)
z
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JO
luc3
66
djudication shall
General
Appointment of
Adjudicator
Terms of Appointment
The Adjudicator'
The A
e Ru
.wo
dicator is not agreed at the latest
in accordance with these Rules,
f the application to the other Party, to
ntract or, if none, to the President of
cator, and such appointment shall be
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 Adjudicator 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 giving 28 days' notice to the Parties. In 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.
Q FlDlC 1999
ffV
15
,z
,
ff
11
The Adjudicator shall in no circumstances be liable for any claims for anything
done or omitted in the discharge of the Adjudicator's duties unless the act or
omission is shown to have been in bad faith.
12
If 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 pro
paid to him
if, as a consequence of such breach any proceedings o
s of the
Adjudicator are rendered void or ineffective.
L
?
v
Payment
13
14
15
16
17
All payments q t R q
n
v
the Contractor.
A dispute between the Parties may be referred in writing by either Party to the
Adjudicator for his decision, with a copy to the other Party. If the Adjudicator
has not been agreed or appointed, the dispute shall be referred 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 Rules.
Procedure for 0
20
46
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 hearing. The Parties
shall promptly provide the Adjudicator with sufficient copies of any
documentation and information relevant to the Contract that he may request.
0 FlDlC 1999
21
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. Without limiting the
foregoing, the Adjudicator shall have power to:
' W
w
U
9
(a)
(b)
(c)
(d)
(e)
22
23
8 FlDlC 1999
17
w
0
Adjudicator's Agreement
Identificationof Project:
.-_-
-.
(the "Project")
Name and address of the Employer:
..
(the "Employer")
Ha
--
(the "Contractor")
- .
and the dispute provisions of the Contract shall form part of this
Agreement.
2.
_ _ _ .-
__
..
Expenses (including the cost of telephone calls, courier charges, faxes and
telexes incurred in connection with his duties; all reasonable and necessary
travel expenses, hotel accommodation and subsistence and other direct travel
expenses).
Receipts will be required for all expenses.
18
0 FlOlC 1999
3.
The Adjudicator agrees to act as adjudicator in accordance with the Rules and
has disclosed to the Parties any previous or existing relationship with the
Parties or others concerned with the Project.
4.
5.
Address
Date
0 FIDIC 1999
19
General
There is no Engineer
q-.
required,
Agreement
$
i
!
J
@
+&
It is in ended that the Employer will write in the Employer's name in the Agreement
d fill in the Appendix where appropriate and send two copies to tenderers together
h the Specification, Drawings etc forming the tender package. In respect 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.
If 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 their respective documents. The Contractor thus makes a
revised offer in response to the Employer's revised tender documents and the revised
offer is accepted by the Employer signing and returning the Acceptance form. If the
changes are extensive, a new form of Agreement should be completed
.. by the Parties.
0 FlDlC 1999
Previous page
is blank
21
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.
w
When 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
the currency of the Country, the Employer should make this cle
Sub-clause 11.7.
!
i
se I
wa
56
00
- .
P
a
Appendix
..
. _.
3 !
General Provisions
-.
Definitions. Th
those to be fou
-.
_.
or in
22
Q FlDlC 1999
1.1.7
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:
n
foreign enemies,
or usurped
1.5
1.6
- .-
ess the Parties have agreed otherwise, the Site must be handed over by
Contractor on the Commencement Date. This is 14
er the Contract has come into effect, which occurs when the signed
returned by the Employer to the Contractor (see also
-Clause 1.1.7 above).
The Employer
If for any reason, permits 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:
"
2.4
Employer's
Representatives
Two principles guided the drafting of this Clause. Firstly, the Contractor
should know who in an Employer organisation is authorised to speak and
0 FlDlC 1999
23
act for the Employer at any given time. This is achieved by Sub-clause 3.1 :
the authorised individual should be named in the Appendix.
Secondly, those Employers who require professional assistance should not
be discouraged from doing so and their consultant should have clearly
established delegated powers. This is the object of Sub-clause 3.2. Once
appointed, the Employer's representative acts for and i
Employer. There is no dual role or duty to be im
Employer's Representative is required with a role
Engineer, then the following words could be
Conditions:
"Replace the final sentence of SubEmployer's Representative shall exe
the powers of the Employer under
11.1 to 11.6, 11.8, 12.1, 13.
The Contractor
4.1
Most contracts do
would be desi
4.4
nv
Perform
,()Appendix.
Design by Contractor
24
The Contractor's responsibility for his design remains, as is made clear here
and in Sub-clause 2.4. In the event of conflict between 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.
8 FlDlC 1999
The Contractor will have an absolute obligation to ensure that the parts of
the Works designed by him are fit for their purpose, provided that the
intended purposes are defined in the Contract. The Employer must
therefore make clear in the parts of the Specification that impose design
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 p u r p o s w e f i n e d or
not.
If a party wishes to protect the intellectual property i n m p r o v i s i o n
must be made in the Particular Conditions.
\w
Employer's Liabilities
6.1
7.2
7.3
Taking-Over
7.4
8.2
Q FlDlC 1999
25
z <
10.1
JO
gg
55
C!lo
'
0 1
$ 1
0
3:
10.2
to be considered as it can
ion and avoid subsequent
make-up (Sub-Clause 10.5) before
n agreed lump sum can form part
ional approach can be taken by valuing the
I of quantities and any schedules, or
26
Normally only one of the options in the Appendix should be used to indicate
how the sum in the offer is be calculated and presented. The following
explains what is intended:
Lump sum price
0 FlDlC 1998
Remeasurement with
bill of quantities
prepared by the E
11.3
11.4
Q FlDlC 1999
27
11.5
The release of the second part of the retention will serve as confirmation that
all notified defects have been remedied.
11.7
12.1
z
0
uch equipment. Local law will often protect the Employer from
e and reckless removal of essential items.
the Employer to retain the Contractor's Equipment may clash
to realise the assets of an insolvent
law would be necessary.
This Sub-clause enables the financial aspects of the Contract to be resolved
quickly and without the necessity to await the completion of the Works by
others. By specifying the damages payable to the innocent party for the
defaults leading to the termination, much delay, complication and scope for
dispute are avoided. The Employer's costs in obtaining a replacement
contractor will generally be higher than the Contractor's loss of profit.
28
0 FlDlC 1999
Insurance
The Employer should set out his precise 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.
14.1
Resolution of Disputes
15.1
*ossible.
ould be taken about whether an adjudicator should be local or from
eutral country. Although the adjudicator should be impartial, the costs of
ploying someone from a third country could be disproportionate if it is
ecessary for the adjudicator to visit or if a hearing became necessary.
However, in view of the costs involved in arbitration, even of minor disputes,
any extra cost of a truly impartial adjudicator is a recommended investment.
%@
Q&
15.3
Arbitration may not be commenced unless the dispute has first been the
subject of an adjudication. The Rules of arbitration should be stipulated in
the Appendix. The UNCITRAL Rules are recommended. However, if
administered arbitration is required, that is arbitration overseen and
administered by an arbitral institution, the ICC Rules could be specified. The
ICC Court of Arbitration and its Secretariat in Paris appoints and replaces
arbitrators, checks the form of terms of reference and awards and generally
monitors progress and the performance of arbitrators. Where alternative
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