This Second Edition of the FIDIC Silver Book maintains the principles of risk . Andrew Read, Pedersen Read Consulting, New Zealand (chairman FIDIC. In , FIDIC published a new contract, the Conditions of Contract for EPC The introductory note to The Silver Book sets out the circumstances in which. for Construction (new Red Book), Conditions of Contract for Plant and Contract for EPC Turnkey Projects (Silver Book)), obtainable via presinescinmett.tk
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Turnkey Projects, a new standard form also referred to as the "Silver Book" Silver Book and discuss how the international construction industry and the legal . negative to FIDIC's "Silver Book" and contained some disparaging and unfounded remarks. These texts are: ▫ The new FIDIC EPC BOT contract: J. Bruno de. FIDIC Matrix: FIDIC Yellow, Silver & Gold Books + Review of updates, London, We will also be reviewing the new editions of the Yellow and Silver.
Variations and adjustments Sub-Clauses The rationale of the clause stays in that in almost all the construction contracts the need to vary the works may arise during the construction phase and after the contract has already been awarded.
There are three main types of variations: those purely instructed by the Employer; those proposed by the Contractor upon request of the Employer; those proposed by the Contractor. Sub-Clause Unless the Contractor gives a notice to the contrary in case of specific and limited cases, the latter will be bound by any variation instructed by the Employer.
Variations initiated by the Contractor are instead governed by Sub-Clause The proposal submitted by the Contractor shall clearly specify any impact that the variation will have on costs and time for completion. If no agreement is reached between the parties in such respect, the Employer shall proceed according to Sub-Clause 3.
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Clearly one point to be also considered is that any Variation may have an impact on the liabilities of the Contractor and this should be carefully considered especially in the case the Contractor simply execute an Employer's Instruction. Claims One of the most important issues for any contractor is the entitlement to submit claims. There are various clauses which provides expressly said right. In general terms however, the most relevant provision of the Silver Book is contained in Sub-Clause It must be stressed that the provision is a time-bar-limit provision and this is expressly stated in the second paragraph of the same Sub-Clause which provides that: "if the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim".
Whether the time-bar-provision will be enforceable or not will clearly depend on the governing law of the Contract but this will eventually be discussed during the dispute or even at contentious level.
FIDIC Silver Book (2017)
The best advice is clearly to comply with the time limit provided by Sub-Clause Clause Their provisions are mostly self-explanatory and provide the possibility to amend the General Conditions via Special Conditions which will allow adapting the Contract to the specific project and the governing law.
Silver Book aims at providing the Employer certainty in terms of costs and time for completion.
It is fair to say that as they are now the provisions of the Silver Book are slightly more favorable to the Employer. The use of the Silver Book but this is true also for the other FIDIC forms requires however a competent contract administration both from the Employer and the Contractor to avoid any pitfall and to ensure that it reaches fully the aim the parties have in mind.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Should the wording of the edition be used without modifications, it would be wise to consider the time limits as firm time bars and not rely on a justification of a late claim by the engineer. The engineer shall make a determination of the matter or claim pursuant to sub-clause 3.
Attention should be paid to the fact that if the engineer does not make a determination within the time limit concerning a claim, the claim will be deemed rejected which, for the sake of clarification, also applies in respect of the employer's claims.
If a party wants to file a notice of dissatisfaction with the determination with the DAAB, such notice must be filed within 28 days calculated from the date of the deemed rejection, which definitely places heavy demands on the parties' claims procedure. Employer and Contractor Attention should be paid to the many new requirements for processing claims, including time bars and whether the engineer's failure to react is deemed an approval or a rejection.
It should be considered making it clear what the consequences are of failure to comply with a time limit. Engineer Attention should be paid to the excessive number of deadlines and procedures for handling claims and the difficulties in reading clause 20 and sub-clause 3. This naturally poses the question whether the intention of the above is to obtain a factual change, including whether a purpose expressly stated elsewhere in the contract except in the Employer Requirements should be disregarded, which will probably be considered the general rule, and which is also in line with the opinion of the FIDIC speakers; thus, a change in the contractors' favour.
In addition to the above change, the edition introduces an indemnification obligation for the lack of fitness for purpose of the works, see further details below under item 6. Employer It is recommended to include a separate clause on the purpose of the works in the Employer Requirements and at least under Danish law to clarify the understanding of a fit for purpose provision.
Furthermore, it is generally as usual recommended to ensure that the purpose and requirements are described as precisely as possible, e. Contractor Instead of relying on the "ordinary purpose", it is recommended to ensure that the purpose of the works is described in detail and preferably that the understanding of the fitness for purpose clause is clear.
As an example, the programme i. The provision is relevant, but is nonetheless close to empty, as it only refers to what has been agreed in the Particular Conditions, and if nothing has been agreed there, all relevant circumstances must be taken into consideration.
The provision does, however, serve as a reminder for the parties to regulate the matter, which is often neglected. Along this line is a new provision in sub-clause Time extension for weather has been tightened so that it is limited to unforeseeable climatic conditions at the site.
If the construction of the works is sensible to adverse weather e. Contractor It should be considered if the provisions on extension of time are sufficient, especially in respect of adverse weather if relevant to the project.
For example, it now appears from sub-clause Again, this may give rise to doubts as to whether the intention of this changed wording is to obtain a factual change, and it does not seem clear from which point in time the undue delay is calculated.
Further, the reference in sub-clause Contractors should be aware that sub-clause There are still no provisions in the contract on serial defects, which - depending on the nature of the delivery - should be considered by the employer. Employer It should be considered whether to use the wording of the provisions mentioned above or at least make it clear from which point in time certain deadlines are calculated.
Protection in respect of serial defects are also worthwhile considering.
Contractor Sub-clause Clause 17 is now entitled "Care of the Works and Indemnities" and holds many of the provisions of the clause Clause 18 is now entitled "Exceptional Events" which replaces the clause 19 concerning force majeure. The term "force majeure" is no longer used in the edition. The changes made to these clauses do not, in our view, contribute much to an easy understanding of this very important issue, and the wording seems unclear in some places despite the intention by FIDIC to obtain a much clearer language.
NEW FIDIC CONTRACTS
The obligation of the parties to indemnify each other for certain claims has been extended by a new provision in sub-clause The provision implies that the contractor shall indemnify and hold harmless the employer "against all acts, errors or omissions by the Contractor in carrying out the Contractor's design obligations that result in the Works or Section or Part or major item of Plant, if any , when completed, not being fit for the purpose s for which they are intended under Sub-Clause 4.
This extensive obligation to indemnify the employer was - in the draft version of the FIDIC Yellow Book circulated about a year ago - further exempted from the limitations of liability in sub-clause However, in the final version this is no longer the case and FIDIC seems to have listened to the many objections against that provision. As mentioned above, the limitations of liability are now found in sub-clause 1.
Some changes have been made to the exceptions of the overall liability cap and the exclusion of indirect loss, which seem to be correcting the provision in the edition. Employer Clause 17 and 18 should be read and considered carefully.Time extension for weather has been tightened so that it is limited to unforeseeable climatic conditions at the site. Employer Clause 17 and 18 should be read and considered carefully.
The split of the old Clause 20 into the new Clauses 20 and 21 is probably one of the key changes insofar as it introduces a clear distinction between claims and disputes and the methodology for establishing both.
FIDIC Silver Book (2017)
Sub-Clauses 9. The difference in risk allocation between the FIDIC suite of contracts has been reflected in the market by differential pricing even taking into account the differences in scope for which the different Books were designed , namely, a contractor bidding under a Red Book risk profile is likely to offer a lower price than for a Silver Book risk profile.
This is exemplified on even the simplest level by the fact that the drafting has increased in this section of the Silver Book from one page in length to around five pages.