Reed Smith Client Alerts

When is a FIDIC contract not a FIDIC contract? Although FIDIC contracts are standard forms, which, by definition, require amendment to meet the specific needs of a particular project, there has been a continuing trend towards substantial amendment. This means that, in many cases, the final contract no longer reflects the ‘fair and balanced’ philosophy claimed to underpin the FIDIC forms. FIDIC discourages this practice, and its recently issued “Golden Principles 2019” seeks to remind users of the underlying philosophy of its forms and to highlight the risks of making substantial amendments that cut across the same. Will the Golden Principles 2019 have any practical impact on the approach and behaviour of FIDIC users?

Authors: Vincent Rowan Shareena Edmonds Elinor Crowther Bree Miechel Simon Harvey

Building cranes at construction site at night

FIDIC contracts are well established – better the devil you know

FIDIC forms of contract are widely and successfully used for international construction projects, largely because they are tried, tested and respected and because they seek a fair and balanced, or at least known, approach to risk and reward. Parties believe they know what they are signing up to when they enter into a FIDIC contract. 

But FIDIC contracts are standard forms; they do not and cannot include all the provisions that the parties wish or need to include. The forms are intended to be amended to take into account, for example: (i) governing law; (ii) the location of the project; (iii) other special and particular characteristics of each project; and (iv) the parties’ particular preferences. Other amendments may simply be general improvements that clarify the drafting or reflect developments in practice, for example, including  BIM provisions (where FIDIC has so far only provided guidance).