Professional Documents
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Contracts Terms and Conditions
Contracts Terms and Conditions
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OBJECT OF CONTRACT
WORK
TIME
SCHEDULE
PROGRESS CONTROL
REPORTS
ENTIRE AGREEMENT
NON-WAIVER - MODIFICATIONS TO
CONTRACT
INTERPRETATION OF CONTRACT
FINAL ACCEPTANCE
INDEPENDENCE OF CONTRACTOR
CHANGE ORDERS
COMPANY REPRESENTATIVE
CONTRACTOR'S ORGANIZATION
APPLICABLE
LAWSCUSTOMS
REGULATIONS- AUTHORIZATIONS
SUB - CONTRACTORS
ASSIGNMENT
CONTRACTOR'S PERSONNEL
WORK LOCATIONS
SITE REQUIREMENTS
AND
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CONFIDENTIALITY
CONTRACT PRICE
TAXES
INDUSTRIAL PROPERTY
INFRINGEMENT
BANK GUARANTEE
CONFLICT OF INTEREST
CLAIMS
LIENS
SETTLEMENT OF DISPUTES
FORMAL NOTICES
EFFECTIVE DATE
LIQUIDATED DAMAGES
ADDITIONAL DEFINITIONS
CONSEQUENTIAL DAMAGES
RIGHTS
PATENT
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Contractors liability
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Contractors liability
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
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PLANT Performance
Guarantees
Remedies
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PLANT Performance
Guarantees
Remedies
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PLANT Performance
Guarantees
Remedies
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PLANT Performance
Guarantees
What is guaranteed? PLANT throughput, products specs
Rely upon: feedstock composition, PROCESS LICENSORs
guarantees
Tolerance band?
Deemed APPROVAL?
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PLANT Performance
Guarantees
Remedies
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PLANT Performance
Guarantees
Remedies
Make good
Possibility to pay liquidated damages instead? How
much?
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
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PLANT Performance
WORK TIME SCHEDULE
What are the key features of
the time schedule
guarantee?
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PLANT Performance
WORK TIME SCHEDULE
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
What does the Mechanical
warranty cover?
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
What does the Mechanical
warranty cover?
Design, material and
workmanship defects
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
What are the key features of
the Mechanical warranty
provision?
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
Duration
Start
Long date limit?
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
Duration
Start
Long date limit?
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PLANT Performance
WORK TIME SCHEDULE
MECHANICAL WARRANTY
Duration
Start
Long date limit?
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Contractors liability
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Contractors liability
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Contractors liability
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Contractors liability
Exclusions of consequential (indirect) damages
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Contractors liability
Exclusions of consequential (indirect) damages - example
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Contractors liability
Exclusions of consequential (indirect) damages - example
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Contractors liability
Exclusions of consequential (indirect) damages - example
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Contractors liability
Exclusions of consequential (indirect) damages - example
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Contractors liability
Exclusions of consequential (indirect) damages
Liability cap, e.g., 20% of the CONTRACT PRICE, but with
exclusions, e.g.
Liquidated Damages
Make-good
Indemnification
At law claims
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Contractors liability
Examples
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Performance Guarantee
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Performance Guarantee
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Performance Guarantee
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Performance Guarantee
ARTICLE 44
SPECIAL PROVISIONS
Notwithstanding anything to the contrary in the CONTRACT, CONTRACTORs aggregate liability arising out of
or in connection with this CONTRACT including negligence shall be limited to Seventy five percent (75%)of
the Final CONTRACT PRICE, excluding
i)
Contractors liability for indemnities under articles 40 and 41;
ii)
Contractors re-performance obligations under articles 19.1 and 19.2
iii)
Contractors liability for breach of its confidentiality obligations
iv)
Contractors liability for taxes under Article 34.
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Performance Guarantee
What is CONTRACTORs exposure to make good for not meeting PLANT performances?
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Performance Guarantee
What is CONTRACTORs exposure to make good for not meeting PLANT performances? 75%
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Performance Guarantee
What is CONTRACTORs exposure to make good for not meeting PLANT performances? 75%
What is CONTRACTORs exposure to compensation to CPY for deficiencies?
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Performance Guarantee
What is CONTRACTORs exposure to make good for not meeting PLANT performances? 75%
What is CONTRACTORs exposure to compensation to CPY for deficiencies? Unlimited
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Contractors liability
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Contractors liability
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Notices:
The CONTRACT requires that CONTRACTOR formally notifies
COMPANY upon occurrence of certain events, within a specified
period after the occurrence of the event.
Force Majeure,
HSE incident or near incident,
Notice of Readiness for Inspection, prior to cover up
etc.
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Contractors liability
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Contractors liability
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What happened?
Different soil quality than that indicated in the CONTRACTs soil survey report were
identified.
What do you think of CTRs entitlement to a CHANGE ORDER?
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What happened?
Different soil quality than that indicated in the CONTRACTs soil survey report were
identified.
What do you think of CTRs entitlement to a CHANGE ORDER?
Pursuant to Art. 12.1 CTR is not entitled to compensation for different than expected
soil conditions.
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Contractors liability
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Contractors liability
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The Clause:
What happened?
On a Revamping job, CTR needed some existing documents. Such existing
documents were not available.
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The Clause:
What happened?
On a Revamping job, CTR needed some existing documents. Such existing
documents were not available.
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Contractors liability
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Contractors liability
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Case study:
a CONTRACT contains the following
articles and endorsement certificate
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Case study
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3.
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Discipline presentation:
activities and deliverables
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Difference between
Engineering and Shop
drawings
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Eligible events
Delay, defect in CPY item
Delay in CPY document, design basis, clarification etc.
Force Majeure
Determination of the EOT
Delay of the COMPLETION DATE due to this sole events
impact on the Critical Path of the WORK TIME SCHEDULE
Unless CTR immediately notifies CPY, CTR forfeits its right
to an EOT
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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Independence of CONTRACTOR
CPY has the right to instruct CTR as to the results which it wishes to obtain from the WORK
and to inspect the WORK at all stages of execution in order to ascertain that these results are
being obtained and that WORK is being carried out in accordance with CONTRACT
requirements CPY shall not have the right to direct the execution of the WORK except in case
of defective performance and take-over.
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Independence of CONTRACTOR
CPY has the right to instruct CTR as to the results which it wishes to obtain from the WORK
and to inspect the WORK at all stages of execution in order to ascertain that these results are
being obtained and that WORK is being carried out in accordance with CONTRACT
requirements CPY shall not have the right to direct the execution of the WORK except in case
of defective performance and take-over.
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Independence of CONTRACTOR
CPY has the right to instruct CTR as to the results which it wishes to obtain from the WORK
and to inspect the WORK at all stages of execution in order to ascertain that these results are
being obtained and that WORK is being carried out in accordance with CONTRACT
requirements CPY shall not have the right to direct the execution of the WORK except in case
of defective performance and take-over.
As per the CONTRACT CPY has no such rights but in fact there are
numerous procedural requirements in the Co-ordination procedure
(submittals, reporting requirements)
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Co-ordination procedure
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The co-ordination
requirements
procedure
entails
numerous
procedural
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Co-ordination procedure
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The co-ordination
requirements
procedure
entails
numerous
procedural
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Co-ordination procedure
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The co-ordination
requirements
procedure
entails
numerous
procedural
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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Entire AGREEMENT
The CONTRACTs Exhibit K is empty (it had not been filled at CONTRACT
Award stage). Upon CONTRACT award, CTRs representative changes
(Proposal Manager is replaced by Project Manager).
CPY notifies CTR that it is exercising liquidated damages due to the
above substitution.
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Entire AGREEMENT
The CONTRACTs Exhibit K is empty (it had not been filled at CONTRACT
Award stage). Upon CONTRACT award, CTRs representative changes
(Proposal Manager is replaced by Project Manager).
CPY notifies CTR that it is exercising liquidated damages due to the
above substitution.
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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As per the above article, what is the validity of CPYs instructions in:
Emails
Comments on deliverables
Minutes of Meeting
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As per the above article, what is the validity of CPYs instructions in:
Emails not valid
Comments on deliverables - cannot be considered as CPY
instructions, as they are not signed by CPY rep
Minutes of Meeting no, unless signed by CPY representative
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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21.2 Any delay attributable to an occurrence described in Section 21.1 shall be considered an
excusable delay, and neither PARTY shall be entitled to compensation beyond the provisions of
this AGREEMENT as a result thereof except as follows;
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21.3 Any delay attributable to an occurrence described in Section 21.1 shall be considered an
excusable delay, and neither PARTY shall be entitled to compensation beyond the provisions of
this AGREEMENT as a result thereof except as follows;
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21.3 Any delay attributable to an occurrence described in Section 21.1 shall be considered an
excusable delay, and neither PARTY shall be entitled to compensation beyond the provisions of
this AGREEMENT as a result thereof except as follows;
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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ARTICLE 6
6.4
INTERPRETATION OF CONTRACT
Clarifications
During the performance of the WORK, should any error, omission, deficiency, inaccuracy,
contradiction, ambiguity, and/or discrepancy become apparent between or among the
CONTRACT DOCUMENTS and/or additional or revised COMPANY supplied documents,
CONTRACTOR shall promptly notify COMPANY of same and shall obtain COMPANYS
clarification prior to commencing any related part of the WORK, it being understood that
performance of any such WORK prior to clarification shall be at CONTRACTORS risk and cost.
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ARTICLE 6
6.4
INTERPRETATION OF CONTRACT
Clarifications
During the performance of the WORK, should any error, omission, deficiency, inaccuracy,
contradiction, ambiguity, and/or discrepancy become apparent between or among the
CONTRACT DOCUMENTS and/or additional or revised COMPANY supplied documents,
CONTRACTOR shall promptly notify COMPANY of same and shall obtain COMPANYS
clarification prior to commencing any related part of the WORK, it being understood that
performance of any such WORK prior to clarification shall be at CONTRACTORS risk and cost.
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ARTICLE 6
6.4
INTERPRETATION OF CONTRACT
Clarifications
During the performance of the WORK, should any error, omission, deficiency, inaccuracy,
contradiction, ambiguity, and/or discrepancy become apparent between or among the
CONTRACT DOCUMENTS and/or additional or revised COMPANY supplied documents,
CONTRACTOR shall promptly notify COMPANY of same and shall obtain COMPANYS
clarification prior to commencing any related part of the WORK, it being understood that
performance of any such WORK prior to clarification shall be at CONTRACTORS risk and cost.
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The 1st specification states that welds can only be painted after hydrotest while the
second spec states that this only applies to a few welds (socket and seal welds).
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Conclusion?
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Conclusion? CPY has the final word on the interpretation. CTR may
claim.
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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New information
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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CPYs APPROVAL
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CPYs APPROVAL
Is Contractor required to wait for CPYs APPROVAL before to issue documents Issue for
Order or Issue for Construction?
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CPYs APPROVAL
Is Contractor required to wait for CPYs APPROVAL before to issue documents Issue for
Order or Issue for Construction?
No, it is only mentioned that CTR may proceed prior to APPROVAL from CPY at his own
risk. Fair enough, CTR decides to proceed at its own risk but at least CTR is not delayed.
CTR should consider CPYs review and APPROVAL as a service to CTR, that of checking the
compliance with the CONTRACT, rather than a constraint.
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Independence of CONTRACTOR
Entire agreement
Force Majeure
CPYs APPROVAL
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CPYs APPROVAL
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CPYs APPROVAL
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CPYs APPROVAL
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Wrap-up
Which are the critical CONTRACT clauses for the EPC Contractor?
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Wrap-up
Which are the critical CONTRACT clauses for the EPC Contractor?
Consequential damages
Liability
Endorsement
Guarantees
Liquidated Damages
Schedule Clause
Change Clause
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And also
Settlement of disputes: place
Conditions for drawing Performance bond
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