The so-called “FIDIC Contracts” are a set of framework contracts published by the FIDIC (International Federation of Consulting Engineers) which are used in an international setting for construction or engineering works.

Furthermore, said FIDIC standard contracts are used by diverse countries as a framework contract for public works, as well as by the World Bank, the Inter-American Development Bank (IDB), the European Bank for Reconstruction and Development (EBRD), the European Union or international cooperation agencies for the projects which they finance.

With their origin lying in Anglo-Saxon law, a number of framework contracts currently exist which are revised regularly by the FIDIC, among which are:

  • Red book, titled “Conditions of Contract for Construction” for works in which the design corresponds to the contracting party (the client, owner, employer).
  • Yellow book, titled “Conditions of Contract for Plant & Design-Build”, for works in which the design corresponds to the contractor.
  • Silver book, titled “Conditions of Contract for Engineer Procurement Contract/Turnkey Projects” for turnkey works, in which the risk on the design and overpricing is assumed by the contractor.
  • Green book, titled “Short Form of Contract”, for projects which require a relatively small investment, as well as for small or repetitive works, or short-term projects.

The main principle and reason that the FIDIC standard contracts have had such a good reception in the international construction arena is that they bring legal security to foreign investment when the contracting parties are from different jurisdictions.

The FIDIC contracts distribute the risks assumed by each party to the project in a balanced manner, foreseeing some of the general conditions -applicable to all projects -and specific conditions particular to each contract -wherein the precise circumstances of each project may be specified-.

Likewise, the FIDIC standard contracts also provide alternative mechanisms for dispute resolution based upon direct negotiation, mediation, adjudication and arbitration, which in practice are frequently used during the implementation of the different phases of each project.

Ultimately, prior to the negotiation or draft of each contract, our work as legal advisors would consist of determining which of the FIDIC contracts would be the most appropriate for a specific project, with attention to the responsibility for the design, certainty of pricing and the delivery time, or the maintenance subsequent to construction.

 

 

Carla Villavicencio

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

3rd September 2021