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FIDIC Risk Allocation

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FIDIC Risk Allocation

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kontractsmanager
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© © All Rights Reserved
Available Formats
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PRAGMATIC PROJECT CONSILIUM

RISK
ALLOCATION

UNDER FIDIC
CONTRACTS

For Enquiries
[email protected]

© ww.pragmaticpc.com
FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 1 of 19

1. Compliance with Laws (Clause 1.13)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

Under all three FIDIC Books, the responsibility for complying with
applicable

laws lies with the Contractor. This is a common allocation across


many contracts, ensuring that the Contractor, who is often better
placed to manage local legal requirements, takes on this
obligation.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 2 of 19

2. Delayed Drawings or Instructions (Clause 1.9)

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Not Applicable (N/A)

In both the Red and Yellow Books, the risk of delayed drawings or
instructions falls on the Employer. However, this risk is not
applicable under the Silver Book, where the Contractor is usually
responsible for both design and construction, thus controlling the
timing of the drawings and instructions.

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FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 3 of 19

3. Errors in the Employer’s Requirements (Clause 1.9)

• Red Book: Not Applicable (N/A)

• Yellow Book: Employer (E)

• Silver Book: Not Applicable (N/A)

In the Yellow Book, where the Employer provides specific


requirements, the risk of errors in these requirements is borne by
the Employer. However, this is not applicable in the Red and Silver
Books, where either there are no such detailed requirements or
the Contractor takes responsibility for the design.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 4 of 19

4. Right of Access to the Site (Clause 2.1)

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Employer (E)

The responsibility for providing access to the site remains with the
Employer in all three FIDIC Books. This ensures that the Contractor
can commence work as scheduled without delays caused by site
access issues.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 5 of 19

5. Setting Out (Clause 4.7)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

In all three contracts, the Contractor is responsible for setting out


the works. This includes ensuring that the works are positioned
correctly according to the contract requirements.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 6 of 19

6. Quality Assurance (Clause 4.9)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

Quality assurance is consistently the Contractor’s responsibility


across all three books. The Contractor must implement and
maintain a quality assurance system to meet the contract’s
standards.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 7 of 19

7. Site Data (Clause 4.10)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

The Contractor is responsible for interpreting and using the site


data in all three contracts. This places the burden on the
Contractor to account for the conditions of the site as provided in
the data.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 8 of 19

8. Unforeseeable Physical Conditions (Clause 4.12)

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Contractor (C)

Unforeseeable physical conditions are a shared risk in the Red and


Yellow Books, with the Employer bearing the responsibility.
However, in the Silver Book, this risk is transferred to the
Contractor, reflecting the Silver Book’s intent to place more risks
on the Contractor.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 9 of 19

9. Protection of the Environment (Clause 4.18)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

Environmental protection is uniformly the Contractor’s


responsibility across all three FIDIC Books. The Contractor must
ensure that the works comply with environmental laws and
regulations.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 10 of
19

10. Fossils (Clause 4.24)

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Employer (E)

The discovery of fossils is treated as an Employer's risk under all


three contracts, meaning that any delays or extra costs due to
fossil findings are the Employer’s responsibility.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 11 of
19

11. General Design Obligations (Clause 5.1)

• Red Book: Not Applicable (N/A)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

In the Yellow and Silver Books, the Contractor is responsible for the
design. However, in the Red Book, where the Employer provides
the design, this clause does not apply.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 12 of
19

12. Design Error (Clause 5.8)

• Red Book: Not Applicable (N/A)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

The responsibility for design errors lies with the Contractor in both
the Yellow and Silver Books. This reflects the Contractor’s role in
the design process under these contracts.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 13 of
19

13. Testing Delays by Employer (Clause 7.4)

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Employer (E)

The Employer is responsible for any delays in testing under all


three books, as it is generally the Employer’s obligation to arrange
for testing.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 14 of
19

14. Rejection of Materials (Clause 7.5)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

If materials are rejected, the Contractor bears the responsibility,


which is consistent across all three FIDIC Books. The Contractor
must ensure that materials meet the specified requirements.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 15 of
19

15. Remedial Work (Clause 7.6)

• Red Book: Contractor (C)

• Yellow Book: Contractor (C)

• Silver Book: Contractor (C)

Remedial work is the Contractor’s responsibility in all three


contracts. This includes correcting any defects or deficiencies in
the work.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 16 of
19

16. Extension of Time for Completion – Variation (Clause


8.4(a))

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Employer (E)

Variations that lead to a delay in completion entitle the Contractor


to an extension of time, with the responsibility falling on the
Employer in all three books.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 17 of
19

17. Extension of Time for Completion – Delay (Clause


8.4(b))

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Employer (E)

If the Employer causes a delay, the Contractor is entitled to an


extension of time. This is consistent across all three FIDIC
contracts.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 18 of
19

18. Extension of Time for Completion – Exceptionally


Adverse Climatic Conditions (Clause 8.4(c))

• Red Book: Employer (E)

• Yellow Book: Employer (E)

• Silver Book: Contractor (C)

Exceptionally adverse climatic conditions are an Employer’s risk in


the Red and Yellow Books, but in the Silver Book, this risk is
transferred to the Contractor. This is in line with the overall risk
allocation approach of the Silver Book, where the Contractor
assumes more risk.

©www.pragamticpc.com | [email protected] | WhatsApp: +91-99442 54959, +971-5458 19603


FIDIC Risk Allocation: A pragmatic
comparison across Red, Yellow, and
Silver Books 1999
Page 0 of 19

-----------------------------------------------------------------------------------------------------------------------------------------------

For Enquiries Contact:


Email : [email protected]
Mobile : +91-9944254959 | +91 - 9790370609
WhatsApp : +91—9944254959 | +971-545819603
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Website : www.pragmaticpc.com

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