Work on contracts FIDIC

Kornev Ihor
04 / 02 / 2019

What is FIDIC?

 In 1913, in order to aim developing common standards for work in the construction sector, three national associations of European consultancy engineers created FIDIC organization (the abbreviation is formed from the initial letters of the French name International Federation of Engineering Consultants). Subsequently, the organization developed model contracts (protocols) and rules for regulating the relations of participants in international investment and construction activities. As a rule, these documents are advisory and not legally obligatory. However, many companies successfully apply them in their activities as a quality obligatory It should be ruled out that FIDIC's norms are trusted not only in the construction industry international private companies, but also from world financial institutions (European Bank Reconstruction and Development, World Bank, European Investment Bank, etc.) which are engaged in the financing of large infrastructure projects.

 What are the features and benefits of working with FIDIC contracts?

When answering this question, you should pay attention to the area in which they are used. The process construction is quite complex in terms of legal regulation of relations and liability of parties, risk calculations, etc. In addition, each contract establishing rules, should reflect a balanced ratio of rights and obligations of participants in the transaction, that contain the most favorable conditions for both parties. Very often one of them is in more advantageous position and might abuse the requirements of a transaction. Therefore: the advantages of FIDIC, consist in the fact that such contracts are universal and not require the drawing up of individual documents from scratch. They provide for a reasonable reflection of rights and the responsibilities of the parties, in order to minimize the number of controversial issues. FIDIC rules are allowed by mutual agreement of the parties to make changes in the agreements, as well as to regulate the attitude at pre-contract stage. The application of the terms of the FIDIC contracts provide an opportunity to create an effective project management at the expense of the existence of the role of a consultant engineer, who is in fact a manager project. So FIDIC contracts are based on international practice and are international standards that are universally recognized and universal. This approach allows you to save time and resources to negotiate and prepare contracts, since contracts are prepared tools for tender selection. Many risk management conditions for FIDIC contracts are dictated by law enforcement practice, which is also their unconditional advantage.

What types of FIDIC contracts exist?

To classify FIDIC contracts, the feature of the differences in functions and principles are used when you are interacting  between the customer, the executor and the engineer-consultant. Currently, the following groups of prototypes of contractual documentation have been developed. The first group of contracts - contracts issued before 1999. This group includes several

Typical contracts, namely:

1. "The terms of the contract for the construction of civil engineering objects", 4th edition of 1987, corrected and supplemented in 1988 and 1992 (The "Red" book).

2. "Terms of contract for electrical installation work and installation of mechanical Equipment ", 3rd edition of 1987 (" Yellow "book) Conditions of Contract for Electrical and Mechanical Works, Third Edition 1987 (Yellow Book).

3. "Terms of subcontracting on the construction of civil engineering objects", 1st edition 1994 Conditions of Subcontract for Civil Engineering Construction, First Edition 1994.

4. "Model contract between the customer and the consultant for rendering services", 3rd edition of 1998 ("White" book) Client / Consultant Model Services Agreement, Third Edition 1998 (White Book).

5. "Terms of the contract for the design, construction and commissioning of objects turnkey", 1 st 1995 Edition (Orange Book) Conditions of Contract for Design-Build and Turnkey, First Edition 1995 (Orange Book).

The second group includes contracts, issued in 1999, includes:

1. "Terms and conditions for a construction contract", 1st edition 1999 (new "Red" book) Conditions of Contract for Construction, First Edition 1999 (New Red Book).

2. "Contract conditions for the supply of equipment, design and construction", 1st edition 1999 (new "Yellow" book) Conditions of Contract for Plant and Design and Build, First Edition 1999 (New Yellow Book).

3. "Contract terms for projects of type" IPS "(" engineering - conducting of trades - construction ") and projects carried out" turnkey ", 1st edition, 1999 (" Silver "book) Terms of Contract for EPC Turnkey, First Edition 1999 (Silver Book).

4. "Brief Contract Form", 1st edition 1999 ("Green" book) Short Form of Contract, First Edition 1999 (Green Book).

The third group includes the latest contracts released in 2017. This group includes:

1. The Newest Red Book (Contract for the construction of Objects)