WILLIAM GODWIN QC was legal member of the FIDIC Updates Task Group responsible for drafting the 2017 (2nd) editions of the Red, Yellow and Silver Books. He is a specialist London-based barrister whose work often involves cross border projects.

Foreword xiii

Preface xv

About the Author xvii

1 Overview of the 2017 Contracts 1

1.1 Introduction 1

1.2 The Rainbow Suite: The Main Features of the 1999 Red, Yellow and Silver Books 2

1.2.1 The 1999 Red Book 2

1.2.2 The 1999 Yellow Book 4

1.2.3 The 1999 Silver Book 5

1.3 Contractor Risk in the Silver Book: Two Examples 7

1.3.1 Unforeseeable Difficulties 7

1.3.2 Errors in Employer's Requirements 7

1.4 New Potential Risks for Contractor and Employer in the 2017 Books 8

1.4.1 Contractor Risks 8

1.4.2 Employer Risks 10

1.5 FIDIC's Guidance for the Preparation of Particular Conditions 13

1.5.1 The Contract Data 13

1.5.2 The Special Provisions 13

1.5.3 Golden Principles 14

1.5.4 Tender Documents 14

1.5.5 Drafting Options 14

1.5.6 Building Information Modelling 15

1.6 Forms 15

2 Key General Provisions 17

2.1 Definitions 17

2.2 Notices and Other Communications 17

2.3 Law and Language 18

2.3.1 Governing Law 18

2.3.2 Language of the Contract/Communications 19

2.4 Priority of Documents 19

2.5 Errors in the Employer's Requirements/Delayed Drawings and Instructions 20

2.5.1 Errors in Employer's Requirements: Yellow Book Clause 1.9 20

2.5.2 Delayed Drawings and Instructions 21

2.6 Use of Documents 21

2.7 Compliance with Laws 22

2.8 Limitation of Liability 23

2.8.1 Indirect or Consequential Loss or Damage 23

2.8.2 Cap on Contractor's Total Liability 25

2.9 Contract Termination: Clause 1.16 Red and Yellow Books/1.15 Silver Book 26

3 The Employer, the Engineer and Contract Administration 27

3.1 The Employer 27

3.1.1 Right of Access to Site 27

3.1.2 Assistance 28

3.1.3 Employer's Personnel and Other Contractors 28

3.1.4 Employer's Financial Arrangements 28

3.1.5 Site Data and Items of Reference 29

3.1.6 Employer-supplied Materials and Employer's Equipment 29

3.2 The Engineer/Employer's Administration 29

3.2.1 Contract Administration in the Three Books: Engineer's/Employer's Representative's Role and Authority 30

3.2.2 Instructions 32

3.2.3 Instructions: The 2017 Provisions 33

3.2.4 Where the Instruction Does Not State that it is a Variation 33

3.2.5 Clause 3.5/3.4 Sub-paragraph (a) 34

3.2.6 Clause 3.5/3.4 Sub-paragraph (b) 35

3.3 Agreement or Determination 35

3.3.1 Consultation 35

3.3.2 Engineer's Determination 36

3.3.3 Time Limits 36

3.3.4 Effect of Agreement or Determination 37

3.3.5 Dissatisfaction with Engineer's Determination 38

3.4 Meetings 39

4 The Contractor and Fitness for Purpose 41

4.1 Contractor's General Obligations 41

4.1.1 Yellow and Silver Books 41

4.1.2 Red Book 41

4.1.3 'Fitness for Purpose' 42

4.1.4 Other General Obligations 45

4.2 Contractor to Provide Performance Security 45

4.3 Contractor's Representative 47

4.4 Subcontractors 47

4.5 Nominated Subcontractors 48

4.6 Contractor's Documents: The 2017 Red Book 49

4.7 Cooperation 50

4.8 Quality Management and Compliance Verification Systems 50

4.8.1 Quality Management System 51

4.8.2 Compliance Verification 51

4.9 Use of Site Data 52

4.10 Unforeseeable Difficulties/Physical Conditions 53

4.10.1 Unforeseeable Physical Conditions: Procedure 54

4.11 Other Contractor's Obligations 55

5 Design 57

5.1 Contractor's General Design Obligations 57

5.1.1 Silver Book: Errors in Employer's Requirements 57

5.1.2 Silver Book: Designs by Employer 58

5.1.3 Silver Book: Design Personnel 58

5.1.4 Yellow Book: Errors in Employer's Requirements 59

5.1.5 Yellow Book: Designs by Employer 61

5.1.6 Yellow Book: Design Personnel 61

5.2 Contractor's Documents: 2017 Yellow and Silver Books 62

5.3 Other Design-related Provisions 63

6 Plant, Materials and Workmanship/Staff and Labour 65

6.1 Staff and Labour 65

6.2 Plant, Materials and Workmanship 65

6.2.1 Execution, Samples and Inspection 67

6.2.2 Testing by the Contractor 67

6.2.3 Defects and Rejection 68

6.2.4 Remedial Work 69

6.2.5 Ownership of Plant and Materials/Royalties 69

7 Commencement, Delays and Extensions of Time, and Employer's Suspension of the Works 71

7.1 Commencement 71

7.2 Time for Completion 72

7.3 The Programme 72

7.3.1 Contents of the Initial and any Revised Programme 73

7.3.2 Other Provisions: Clause 8.3 76

7.4 Advance Warning 76

7.5 Extensions of Time 77

7.5.1 Yellow and Red Books 77

7.5.2 Silver Book 78

7.5.3 Completion 79

7.6 The Specified Causes of Delay to Completion 80

7.6.1 Variations 80

7.6.2 A Cause of Delay Giving an Entitlement to an Extension Under Another Clause 82

7.6.3 Exceptionally Adverse Climatic Conditions: Red and Yellow Books 82

7.6.4 Unforeseeable Shortages 82

7.6.5 Delays, Impediments or Preventions Caused by or Attributable to the Employer 83

7.7 Concurrent Causes 83

7.8 Delay Damages 85

7.8.1 Clause 8.8: First Paragraph 85

7.8.2 Clause 8.8: Second and Third Paragraphs 89

7.8.3 Other Delay-related Provisions 89

7.9 Employer's Suspension of theWorks 90

7.9.1 Right to Instruct Suspension 90

7.9.2 Effects of Suspension 90

7.9.3 Payment for Plant and Materials After Suspension: Clause 8.11 90

7.9.4 Prolonged Suspension: Clause 8.12 91

7.9.5 Instruction to ResumeWork: Clause 8.13 91

8 Testing on and After Completion and Employer's Taking Over 93

8.1 Testing on Completion 94

8.1.1 Contractor's Obligations 94

8.1.2 Delayed Tests 95

8.1.3 Retesting 95

8.1.4 Failure to Pass Tests on Completion 95

8.2 Employer's Taking Over 97

8.2.1 The 1999 Contracts 97

8.2.2 The 2017 Yellow Book 97

8.2.3 The 2017 Red and Silver Books 98

8.2.4 Procedure Under Clause 10.1 99

8.2.5 Wording of the Deeming Provision 100

8.2.6 Taking Over of Parts: Clause 10.2 101

8.2.7 Other Clause 10 Provisions 101

8.3 Tests After Completion 102

8.3.1 The Yellow Book 102

8.3.2 The Silver Book 104

9 Defects After Taking Over, Acceptance of the Works and Unfulfilled Obligations 107

9.1 Contractor's Basic Obligation 107

9.2 Who is Responsible for the Cost? 108

9.3 Extending the DNP 108

9.4 Other Obligations 109

9.5 Performance Certificate 110

9.6 Unfulfilled Obligations 110

10 Measurement, the Price and Payment 113

10.1 Measurement and Valuation: Clause 12 of the 2017 Red Book 113

10.1.1 Measurement Procedures 113

10.1.2 Method of Measurement 114

10.1.3 Valuation 114

10.1.4 Omissions 115

10.2 The Contract Price 115

10.2.1 Yellow Book 115

10.2.2 Red Book 116

10.2.3 Silver Book 116

10.3 Advance Payment 117

10.4 Plant and Materials Intended for the Works 117

10.5 The Payment Process 118

10.5.1 Interim Payments 119

10.5.2 Statement at Completion 122

10.5.3 Final Statement 123

10.5.4 Discharge 124

10.5.5 Issue of Final Payment Certificate/Final Payment 124

10.5.6 Payment 126

10.5.7 Delayed Payment 127

10.6 Cessation of Employer's Liability 127

11 Variations and Adjustments to the Contract Price 129

11.1 Variations 129

11.1.1 Meaning of 'Variation' 129

11.1.2 The Right to Vary: Omitting Works to Be Carried out by Others 130

11.1.3 Contractor's Objections to a Variation 131

11.1.4 Engineer/Employer's Response 133

11.2 Value Engineering 134

11.2.1 The 1999 Editions 134

11.2.2 The 2017 Books 134

11.3 Variation Procedure 135

11.3.1 Variation by Instruction: Clause 13.3.1 135

11.3.2 Variation by Request for Proposal: Clause 13.3.2 138

11.3.3 New Applications of the Variation Procedure 139

11.4 Other Adjustments to the Contract Price 140

11.4.1 Adjustments for Changes in Laws 140

11.4.2 Adjustments for Changes in Cost 141

12 Termination and Suspension 143

12.1 Employer Termination: For Contractor Default 144

12.1.1 The Grounds of Termination: Clause 15.2, 1999 Editions 145

12.1.2 The Termination Procedure Under Clause 15.2, 1999 Editions 147

12.1.3 Valuation and Payment After a Clause 15.2 Termination 147

12.1.4 The Grounds of Termination: Clause 15.2.1, 2017 Editions 149

12.1.5 Termination: Clause 15.2.2, 2017 Editions 151

12.1.6 Termination Procedure Under Clauses 15.2.3 and 15.2.4, 2017 Editions 151

12.1.7 Valuation and Payment After a Clause 15.2 Termination 151

12.2 Employer's Termination: For Convenience 152

12.2.1 Clause 15.5, 2017 Editions 153

12.2.2 Clauses 15.6 and 15.17, 2017 Editions 154

12.3 Contractor's Right to Suspend 154

12.4 Contractor's Termination 155

12.4.1 The Grounds of Termination: Clause 16.2, 1999 Editions 156

12.4.2 Termination Under Clause 16.2, 1999 Editions 158

12.4.3 Effects of Termination and Payment 158

12.4.4 The Grounds of Termination Under Clause 16.2.1, 2017 Editions 159

12.4.5 Termination Under Clause 16.2, 2017 Editions 160

12.4.6 Contractor's Obligations After Termination 161

12.4.7 Payment After Contractor's Termination 161

13 Care of the Works, Indemnities and Insurance 163

13.1...