CONDITIONS OF

CONTRACT
INTRODUCTION

FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS (FIDIC)

FOUNDED IN 1913 IN FRANCE

EXPANDED IN 1945 TO INCLUDE 40 COUNTRIES, BY 2001 HAD OVER 60

NATIONAL CONSULTING ENGINEERS ASSOCIATION.

PUBLISHED ITS FIRST CONDITIONS OF CONTRACT IN 1957 CALLED “CONDITIONS

OF CONTRACT FOR WORKS OF CIVIL ENGINEERING CONSTRUCTION” POPULARLY
CALLED “THE RED BOOK”.

FIDIC CONDITIONS OF CONTRACT

GENERAL CONDITIONS - REMAINS UNCHANGED FOR EVERY PROJECT.

PARTICULAR CONDITIONS - PREPARED FOR THE PARTICULAR PROJECT AND

CONTAINS CHANGES TO THE GENERAL CONDITIONS AND ADDITIONAL CLAUSES
TO MEET THE REQUIREMENTS OF THE PROJECT.
THE FIDIC 1999 CONTRACTS

PRIOR TO SEPTEMBER 1999 THE PRINCIPAL “TRADITIONAL” FIDIC

CONTRACT CONDITIONS WERE:-

“THE RED BOOK” - CONDITIONS OF CONTRACT FOR WORKS OF CIVIL

ENGINEERING CONTRACTORS.

“THE YELLOW BOOK” - CONDITIONS OF CONTRACT FOR ELECTRICAL AND

MECHANICAL WORKS.

“THE ORANGE BOOK” - CONDITIONS OF CONTRACT FOR DESIGN – BUILD

AND TURNKEY.

“THE WHITE BOOK” – CLIENT/CONSULTANT MODEL SERVICES

AGREEMENT.
NEW FIDIC CONTRACTS FIRST PUBLISHED IN SEPTEMBER, 1999.

CONDITIONS OF CONTRACT FOR CONSTRUCTION (FOR BUILDING AND

ENGINEERING WORKS DESIGNED BY THE EMPLOYER)

CONDITIONS OF CONTRACT FOR PLANT AND DESIGN-BUILD (FOR ELECTRICAL AND

MECHANICAL PLANT AND FOR BUILDING AND ENGINEERING WORKS DESIGNED
BY THE CONTRACTOR)

CONDITIONS OF CONTRACT FOR EPC/TURNKEY PROJECTS

SHORT FORM OF CONTRACT

MULTILATERAL DEVELOPMENT BANK (MDB) HARMONISED GENERAL CONDITIONS

OF CONTRACT AND SAMPLE FORMS (2005, AMENDED 2006)
FIDIC’S REASONS FOR INTRODUCING NEW SUITE OF CONDITIONS OF CONTRACT
DOCUMENTS

EXPANSION OF TYPES OF PROJECTS TO BE COVERED THAT REFLECTS CHANGES

WITHIN THE INTERNATIONAL CONSTRUCTION SECTOR

ATTEMPT TO STANDARDIZE FORMAT OF MAIN FIDIC CONTRACT DOCUMENTS

INTRODUCTION OF NEW CLAUSES AND UPDATE OF CERTAIN CLAUSES TO MEET

CURRENT PRACTICE WITHIN THE CONSTRUCTION INDUSTRY

UPDATE THE ROLE OF “THE ENGINEER”

DEVELOP USE OF “DISPUTES ADJUDICATION BOARD”

FIDIC PROPOSED USE OF :-

“NEW RED BOOK” - CONDITIONS OF CONTRACT FOR CONSTRUCTION

“RECOMMENDED FOR BUILDING OR ENGINEERING WORKS DESIGNED BY THE

EMPLOYER, OR BY HIS REPRESENTATIVE, THE ENGINEER. UNDER THE USUAL
ARRANGEMENTS FOR THIS TYPE OF CONTRACT, THE CONTRACTOR CONSTRUCTS
THE WORKS IN ACCORDANCE WITH A DESIGN PROVIDED BY THE EMPLOYER.
HOWEVER, THE WORKS MAY INCLUDE SOME ELEMENTS OF CONTRACTOR–
DESIGNED, CIVIL, MECHANICAL, ELECTRICAL AND/OR CONSTRUCTION WORKS”

“NEW YELLOW BOOK”- CONDITIONS OF CONTRACT FOR PLANT AND DESIGN–

BUILD

“RECOMMENDED FOR THE PROVISION OF ELECTRICAL AND MECHANICAL PLANT,

AND FOR THE DESIGN AND EXECUTION OF BUILDING OR ENGINEERING WORKS.
UNDER THE USUAL ARRANGEMENTS FOR THIS TYPE OF CONTRACT, THE
CONTRACTOR DESIGNS AND PRODUCES, IN ACCORDANCE WITH THE EMPLOYERS
REQUIREMENTS, PLANT AND/OR OTHER WORKS; WHICH MAY INCLUDE ANY
COMBINATION OF CIVIL, MECHANICAL, ELECTRICAL AND/OR CONSTRUCTION
WORKS”
“SILVER BOOK” - CONDITIONS OF CONTRACT FOR EPC/TURNKEY

“WHICH MAY BE SUITABLE FOR THE PROVISION ON A TURNKEY BASIS OF A

PROCESS OR POWER PLANT OR FACTORY OR SIMILAR FACILITY, OR OF AN
INFRASTRUCTURE PROJECT OR OTHER TYPE OF DEVELOPMENT, WHERE (I) A
HIGHER DEGREE OF CERTAINTY OF FIRM PRICE AND TIME IS REQUIRED, AND (II)
THE CONTACTOR TAKES TOTAL RESPONSIBILITY FOR THE DESIGN AND EXECUTION
OF THE PROJECT, WITH LITTLE INVOLVEMENT OF THE EMPLOYER. UNDER THE
USUAL ARRANGEMENTS FOR TURNKEY PROJECTS, THE CONTRACTOR CARRIES OUT
ALL ENGINEERING, PROCUREMENT, AND CONSTRUCTION EPC: PROVIDING A FULLY
EQUIPPED FACILITY, READY FOR OPERATION AT THE “TURN OF A KEY”

“GREEN BOOK” - SHORT FORM OF CONTRACT.

“WHICH IS RECOMMENDED FOR BUILDING OR ENGINEERING WORKS OF

RELATIVELY SMALL CAPITAL VALUE. DEPENDING ON THE TYPE OF WORK AND
CIRCUMSTANCES, THIS FORM MAY ALSO BE SUITABLE FOR CONTRACTS OF
GREATER VALUE, PARTICULARLY FOR RELATIVELY SIMPLE OR REPETITIVE WORK
OR WORK OF SHORT DURATION. UNDER THE USUAL ARRANGEMENTS FOR THIS
TYPE OF CONTRACT THE CONTRACTOR CONSTRUCTS THE WORKS IN ACCORDANCE
WITH A DESIGN PROVIDED BY THE EMPLOYER OR HIS REPRESENTATIVE (IF ANY),
BUT THIS FORM MAY ALSO BE SUITABLE FOR A CONTRACT WHICH INCLUDES, OR
WHOLLY COMPRISES, CONTRACTOR-DESIGNED CIVIL, MECHANICAL, ELECTRICAL
AND/OR CONSTRUCTION WORKS
MULTILATERAL DEVELOPMENT BANK (MDB) HARMONISED GENERAL CONDITIONS OF
CONTRACT AND SAMPLE FORMS (2005, AMENDED 2006)
CONDITIONS OF CONTRACTS FOR CONSTRUCTION
CLAUSE  GENERAL CONDITIONS ”

 1.  GENERAL PROVISION
 2.  THE EMPLOYER
 3.  THE ENGINEER
 4.  THE CONTRACTOR
 5.  NOMINATED SUBCONTRACTOR
 6.  STAFF AND LABOUR
 7.  PLANT, MATERIALS AND WORKMANSHIP
 8.  COMMENCEMENT, DELAYS AND SUSPENSION
 9.  TESTS ON COMPLETION
 10.  EMPLOYERS TAKING OVER
 11.
 DEFECTS LIABILITY
 12.
 MEASUREMENTS AND EVALUATION
 13.
 VARIATION AND ADJUSTMENTS
 14.
 CONTRACT PRICE AND PAYMENT
 15.
 TERMINATION BY EMPLOYER
 16.
 SUSPENSION AND TERMINATION BY CONTRACTOR
 17.
 RISK AND RESPONSIBILITY
 18.
 INSURANCE
 19.
 FORCE MAJEURE
 20 .  CLAIMS, DISPUTES & ARBITRATION
 APPENDIX-General Conditions of Dispute Adjudication
Board
 ANNEX-Procedural rules
 INDEX of Sub-Clauses
 GUIDANCE of the Preparation of Particular Conditions
 FORMS of Letter of Tender
 Appendix to Tender
 Contract Agreement
 Dispute Adjudication Agreement
APPENDIX

GENERAL CONDITIONS OF DISPUTE ADJUDICATION AGREEMENT

WHEN DAB APPOINTED

METHOD OF PAYMENT

TERMINATION

AVAILABILITY

GUIDANCE PREPARATION OF PARTICULAR CONDITIONS

INTRODUCTION

NOTES ON THE PREPARATION OF TENDER DOCUMENTS

ANNEXES - FORMS OF SECURITY

PREPARATION OF PARTICULAR CONDITIONS

THE GUIDANCE IS TO ASSIST WRITERS OF THE PARTICULAR CONDITIONS

BY GIVING OPTIONS FROM VARIOUS SUB-CLAUSES WHERE APPROPRIATE

FIDIC RECOMMEND SUITABLY QUALIFIED ENGINEER TO PREPARE

DOCUMENTS AND A REVIEW BY A SUITABLY QUALIFIED LAWYER

MAJOR EXERCISE IN CROSS REFERENCING GENERAL CONDITIONS WITH:

- APPENDIX TO TENDER
- SPECIFICATIONS
- PARTICULAR CONDITIONS,

AND ENSURING NO CONTRADICTION.

CLAUSE 1.5 GIVES PRIORITY OF CONTRACT DOCUMENTS

RESPONSIBILITIES AND DUTIES

PARTIES TO THE CONTRACT

- RESPONSIBILITY OF THE EMPLOYER – CLAUSE 2
- AUTHORITY OF THE ENGINEER – CLAUSE 3
- OBLIGATIONS OF THE CONTRACTOR – CLAUSE 4

CONTRACT ADMINISTRATION/PROJECT MANAGEMENT

- DELEGATED TO THE ENGINEER, HOWEVER OTHER CONTRACT

ADMINISTRATIVE/PROJECT MANAGEMENT PROCEDURES MUST BE FOLLOWED BY
THE EMPLOYER AND CONTRACTOR.

SUB-CLAUSE 2.4 - EMPLOYERS FINANCIAL ARRANGEMENTS

SUB-CLAUSE 2.5 - EMPLOYERS CLAIMS
SUB-CLAUSE 4.9 - QUALITY ASSURANCE
SUB-CLAUSE 4.21 - DETAILED MONTHLY PROGRESS REPORTS
SUB-CLAUSE 6.7 - HEALTH AND SAFETY RECORDS
SUB-CLAUSE 6.10 - PERSONNEL AND EQUIPMENT DETAILS
SUB-CLAUSE 8.3 - NOTICE OF PROGRAMMING IMPLICATIONS
SUB-CLAUSE 13.2 - VALUE ENGINEERING PROPOSALS
SUB-CLAUSE 14.3 - INTERIM PAYMENT CERTIFICATE STATEMENT
SUB-CLAUSE 19 - FORCE MAJEUR
SUB-CLAUSE 20 - CLAIMS, DISPUTES AND ARBITRATION PROCEDURES
DESIGN RESPONSIBILITY

“NEW RED BOOK” DESIGN PROVIDED BY EMPLOYER. SUB-CLAUSE 4.1 –

PROVISION FOR CONTRACTOR-DESIGNED WORKS.

“NEW YELLOW BOOK” DESIGN CARRIED BY CONTRACTOR IN ACCORDANCE WITH

EMPLOYERS REQUIREMENTS.

RISK ALLOCATION

GENERALLY THE CONTRACTOR ACCEPTS ALL RISKS THAT ARE NOT SPECIFICALLY
ALLOCATED TO THE EMPLOYER.

EMPLOYERS LIABILITIES INCLUDE “SPECIAL RISKS” AT SUB-CLAUSE 17.3.

ENGINEER RESPONSIBLE FOR DUTIES LAID DOWN IN THE CONDITIONS OF

CONTRACT. CONTRACTOR CAN TAKE ACTION AGAINST THE EMPLOYER IF THE
ENGINEER OBSTRUCTS HIM IN HIS OBLIGATIONS.

SUBCONTRACTORS ACCEPT THE OBLIGATIONS THAT ARE STATED IN THE MAIN

CONTRACT AND ARE RESPONSIBLE TO THE CONTRACTOR.
THE EMPLOYER

HAS A DUTY TO STATE WHAT HE WANTS

TO PROVIDE THE SITE

TO PAY FOR THE PROJECT

AVOID PREVENTING THE CONTRACTOR FROM CARRYING OUT HIS OBLIGATIONS.

THE CONTRACTOR

PERSON WHO CONSTRUCTS THE WORKS

RESPONSIBLE UNDER THE CONTRACT AS WELL AS COMMON LAW

SUB-CLAUSE 8.1 – “THE CONTRACTOR SHALL . . . PROCEED WITH THE WORKS WITH DUE EXPEDITION AND
WITHOUT DELAY”

CAN EMPLOY SUB-CONTRACTOR BUT RETAINS HIS OBLIGATION UNDER THE CONTRACT TO THE EMPLOYER.

HAS CONTROL OF THE SITE, THEREFORE RESPONSIBLE FOR THE CARE OF THE WORKS, FOR SECURITY,
SAFETY AND OTHER GENERAL DUTIES.
THE ENGINEER

APPOINTED BY THE EMPLOYER AND NAMED IN THE PARTICULAR CONDITIONS.

“DEEMED TO ACT FOR THE EMPLOYER” – SUB-CLAUSE 3.1(A)

INCLUDED IN THE DEFINITION OF “EMPLOYER’S PERSONNEL’ –

SUB-CLAUSE 1.1.2.6.

IN DETERMINATION OF A CLAIM UNDER SUB-CLAUSE 3.5, HE MUST CONSULT WITH

EMPLOYER AND CONTRACTOR TO “MAKE A FAIR DETERMINATION”.

SUB-CLAUSE 14.6, ENGINEER TO ACT FAIRLY WHEN PREPARING INTERIM

PAYMENT CERTIFICATES.

ENGINEERS DECISIONS CAN BE REFERRED TO DAB, ARBITRATION OR LITIGATION.

THE SUBCONTRACTOR

EMPLOYED BY CONTRACTOR FOR SPECIALIST PARTS OF WORK.

CONTRACTOR HAS COMPLETE RESPONSIBILITY FOR THEIR ACTION EXCEPT WHERE

HE IS IMPOSED BY EMPLOYER, CLAUSE 5 “NOMINATED SUBCONTRACTORS”

CONSENT OF ENGINEER TO BE OBTAINED UNDER CLAUSE 4.4.

THE RESIDENT ENGINEER

AN ASSISTANT TO WHOM DUTIES AND AUTHORITY MAY BE DELEGATED, SUB-CLAUSE

3.2.

LARGE PROJECTS, RESIDENT SITE TEAM.

INDEMNITIES

UNDER CLAUSE 17 CONTRACTOR RESPONSIBLE FOR CARE OF WORKS, THE

EMPLOYER’S RISKS, ANY LIMITATION AND LIABILITIES.

SUB-CLAUSE 17.1 REFERS TO INDEMNITIES I.E TO “HOLD HARMLESS AND

INDEMNIFY” WITH RESPECT TO CLAIMS FROM THIRD PARTIES.

AVOIDANCE OF INTERFERENCE (CONTRACTOR)

TRANSPORT OF GOODS (CONTRACTOR)
INDEMNITIES (CONTRACTOR AND EMPLOYER)
INTELLECTUAL AND INDUSTRIAL PROPERTY RIGHTS (CONTRACTOR AND
EMPLOYER)

BOND & INSURANCES

PERFORMANCE SECURITY PROCEDURE SUB-CLAUSE 4.2

EXAMPLE OF PERFORMANCE SECURITY GIVEN IN PARTICULAR CONDITIONS.

CLAUSE 18 – INSURANCES TO BE PROVIDED BY CONTRACTOR.

EXAMPLE FORMS AND SECURITIES

ANNEX A PARENT COMPANY GUARANTEE

ANNEX B TENDER SECURITY

ANNEX C PERFORMANCE SECURITY – DEMAND GUARANTEE

ANNEX DPERFORMANCE SECURITY – SURETY BOND

ANNEX E ADVANCE PAYMENT GUARANTEE

ANNEX F RETENTION MONEY GUARANTEE

ANNEX GPAYMENT GUARANTEE BY EMPLOYER

FORMS

CONTRACT AGREEMENT

DISPUTE ADJUDICATION AGREEMENT (ONE-PERSON DAB)

DISPUTE ADJUDICATION AGREEMENT (THREE-PERSON DAB)

APPENDIX TO TENDER

NON FINANCIAL DETAIL TO BE COMPLETED AS PART OF TENDER

DOCUMENTATION

EMPLOYER’S DETAILS
CONTRACTOR’S DETAILS (COMPLETED AFTER CONTRACT AWARD)
ENGINEER’S DETAIL
TIME FOR COMPLETION OF THE WORKS
DEFECTS NOTIFICATION PERIOD
ELECTRONIC TRANSMISSION SYSTEMS
GOVERNING LAW
RULING LANGUAGE
LANGUAGE FOR COMMUNICATIONS
TIME FOR ACCESS TO THE SITE
NORMAL WORKING HOURS
PERIODS FOR SUBMISSION OF INSURANCES
DATE BY WHICH DAB SHALL BE APPOINTED
SECTION COMPLETIONS (OPTIONAL)
APPENDIX TO TENDER

FINANCIAL DETAIL TO BE COMPLETED AS PART

OF TENDER DOCUMENTATION

AMOUNT OF PERFORMANCE SECURITY

DELAY DAMAGES FOR THE WORKS
MAXIMUM AMOUNT OF DELAY DAMAGES
PERCENTAGE FOR ADJUSTMENTS OF
PROVISIONAL SUMS
ADJUSTMENTS FOR CHANGES IN COST
TOTAL ADVANCE PAYMENT (AND DETAILS FOR PAYMENT)
PERCENTAGE OF RETENTION
LIMIT OF RETENTION MONEY
PLANT AND MATERIAL EN ROUTE / TO SITE
MINIMUM AMOUNT OF INTERIM PAYMENT
CERTIFICATE
CURRENCY DETAILS
MAXIMUM AMOUNT OF DEDUCTIBLES FOR
INSURANCE OF THE EMPLOYER’S RISKS
MINIMUM AMOUNT OF THE THIRD PARTY
INSURANCE