10 Contract Clauses to Review Before Signing a FIDIC Contract

The phrase “FIDIC contract” can create a false sense of familiarity. The published General Conditions may be well known, but the contract you sign is the project-specific agreement: the selected FIDIC form and edition, the Particular Conditions, Contract Data, specifications or Employer’s Requirements, schedules, tender clarifications, amendments and other incorporated documents.

Pre-signature review should therefore focus less on recognising clause numbers and more on understanding where risk has actually been placed.

The following ten areas are a practical starting point. They are not a substitute for legal advice, and clause numbering can differ between editions and forms.

1. Contract documents, hierarchy and Particular Conditions

Start by establishing what the contract actually consists of.

Check:

• which FIDIC form and edition is used;
• whether the 1999 or 2017/2022 form is being adopted;
• which documents are incorporated;
• the order of precedence;
• whether addenda and tender clarifications are included;
• whether the Particular Conditions amend defined terms; and
• whether one amendment silently changes the effect of another clause.

This is the foundation of the review. It is dangerous to analyse a General Condition in isolation when a Particular Condition has rewritten the risk allocation.

FIDIC’s Golden Principles emphasise that Particular Conditions should be clear and unambiguous and should not undermine the essential balance and character of the General Conditions.

2. Scope and design responsibility

A price is only meaningful if the scope is sufficiently clear.

Review the boundary between:

• permanent and temporary works;
• Employer design and Contractor design;
• performance requirements and prescriptive requirements;
• temporary utilities and permanent utilities;
• testing and commissioning;
• permits and approvals;
• interfaces with other contractors;
• free-issue materials or Employer-supplied items; and
• work expressly excluded from the price.

For design-build and EPC forms, look beyond the headline statement that the Contractor designs the Works. Test whether the Employer’s Requirements contain performance obligations, fitness-for-purpose language, design-life requirements or compliance duties that materially expand exposure.

The key question is: Can the tender team price and programme the obligation from the documents provided?

3. Site access, site data and physical conditions

Access and ground risk can control the entire project.

Review:

• when and in what sequence the Site will be made available;
• whether access is exclusive;
• rights of way and third-party land;
• utility relocation responsibilities;
• reliance on geotechnical and survey information;
• the definition of unforeseeable conditions;
• climatic and hydrological risk; and
• the notice and record requirements for physical-condition claims.

A programme based on full access is not compatible with a contract that only promises phased or discretionary access. The tender programme should reflect the contractual access regime.

4. Programme, Time for Completion and extension of time

Do not treat the completion date as a single line in the Contract Data.

Check:

• commencement conditions;
• Time for Completion;
• sectional or milestone dates;
• programme submission requirements;
• level of schedule detail;
• logic, float and critical-path requirements;
• progress-update obligations;
• recovery or acceleration mechanisms;
• EOT events; and
• the relationship between EOT and additional payment.

A critical distinction is that a compensable event does not automatically equal a day-for-day extension. Under FIDIC, the relevant test generally concerns the effect on completion. The project controls strategy must be capable of demonstrating that effect.

5. Notices, claims procedures and time bars

This is one of the first clauses the project team should operationalise after signature—and one of the most important to review before signature.

Identify:

• who must notify;
• to whom;
• permitted communication method;
• contractual address or platform;
• whether the communication must expressly identify itself as a Notice;
• trigger date;
• time limit;
• initial notice content;
• detailed claim requirements;
• requirements for continuing effects; and
• consequences of non-compliance.

The 1999 and 2017 suites are not procedurally identical. Particular Conditions also frequently modify the standard periods. Build a notice matrix before the contract is signed, not after the first claim arises.

6. Delay damages and other performance remedies

Delay damages should be reviewed with the programme and EOT clauses, not in isolation.

Check:

• the rate;
• cap;
• whether damages apply to Sections or milestones;
• the contractual trigger;
• treatment of partial taking-over;
• relationship with extensions of time;
• whether other damages remain available;
• performance damages; and
• any aggregate liability cap.

Then model the downside. A percentage can look harmless until converted into the value of a realistic six- or twelve-month delay.

7. Variations and valuation

Construction projects change. The contract must tell the team how change becomes authorised and how it is valued.

Review:

• who has authority to instruct a Variation;
• whether the Contractor can object in defined circumstances;
• Request for Proposal procedures;
• valuation hierarchy;
• use of existing rates and new rates;
• daywork or cost-reimbursable mechanisms;
• mark-ups and profit;
• time effects;
• provisional sums; and
• requirements to proceed before price agreement.

The project team should know the difference between a technical comment, an instruction and a contractual Variation. Ambiguity here creates work first and arguments later.

8. Payment, price adjustment, retention and set-off

Cash flow can become a larger project risk than margin.

Map the complete payment cycle:

application → review → certificate → invoice → payment

Then review:

• currencies;
• advance payment;
• advance-payment recovery;
• retention and release;
• plant and materials off site;
• price adjustment or indexation;
• taxes and withholding;
• minimum certificate thresholds;
• rights to withhold or set off;
• financing charges; and
• suspension rights for non-payment.

For lump-sum or EPC contracts, confirm what is actually included in the price and which events can adjust it.

9. Securities, insurance, indemnities and liability

Commercial teams often review price and time in detail but treat securities and insurance as standard administration. They can carry material exposure.

Check:

• performance security amount and expiry;
• advance-payment security;
• parent-company guarantee;
• retention bond;
• on-demand wording;
• extension obligations;
• CAR/EAR coverage;
• professional indemnity;
• third-party liability;
• deductibles;
• indemnities;
• exclusions of indirect or consequential loss; and
• overall and specific liability caps.

The expiry of a bond should align with the underlying obligation, and insurance obligations should be commercially obtainable in the relevant market.

10. Suspension, termination and dispute resolution

Finally, review the clauses that become critical when the relationship stops operating normally.

Understand:

• Employer termination rights;
• Contractor termination rights;
• notice-to-correct mechanisms;
• termination for convenience;
• prolonged suspension;
• payment following termination;
• ownership and handover of documents/materials;
• DAAB/DAB procedure;
• Notice of Dissatisfaction;
• amicable settlement;
• arbitration rules and seat;
• governing law; and
• language.

FIDIC’s Golden Principles treat dispute-board review before arbitration as a defining feature of the standard risk-management structure, subject to governing law.

Turn the review into a Contract Risk Register

A clause review is most useful when it produces operating controls.

For each risk, record:

The objective is not to label clauses “good” or “bad.” It is to ensure the tender price, programme, insurance, securities, delivery strategy and management processes all match the contract being signed.

A familiar standard form can still contain unfamiliar risk. The best time to discover that risk is before signature.