Background of FIDIC Contracts

FIDIC contract forms

Over time, FIDIC has continuously enhanced its contracts by introducing new forms of contract, replacing previous ones, and updating important terms. The table provided gives a brief overview of all FIDIC contracts to date. Although there are many different types of FIDIC contracts available, they all share some common features.

FIDIC contract	Year released	Notes
The (old) Red Book	First published in 1957, the fourth and final edition was published in 1987, with a supplement added in 1996.	These contracts were aimed at the civil engineering sector, as differentiated from the mechanical/electrical engineering sector.
The (old) Yellow Book	First published in 1967 with the third and last edition in 1987.	These contracts were aimed at the mechanical/electrical engineering sector.
The Orange Book	The first and only edition of this contract was released in 1995.	This was the first design and build contract released by FIDIC.
The (new) Red Book	Released in 1999.	The Red Book is suitable for contracts that the majority of design rests with the Employer.
The (new) Yellow Book	Released in 1999.	The Yellow Book is suitable for contracts that the contractor has the majority of the design responsibility.
The Silver Book	Released in 1999.	The Silver Book is for turnkey projects. This contract places significant risks on the contractor. The contractor is also responsible for the majority of the design.
The Pink Book	First published 2005 – an amended version was published 2006, with a further edition in June 2010.	This is an adaptation of The Red Book created to fit the purposes of Multilateral Development Banks.
The Gold Book	Released in 2008.	This is FIDIC’s first Design-build and operate contract.

Other contracts in the FIDIC family include the FIDIC sub-contract, The Blue Book, which is concerned with dredging and reclamation works, and The White Book, which is for the engagement of consultants by Employers.

General features of FIDIC contracts

Although the FIDIC family covers a wide range of contracts, there are some common features:

Presentation

FIDIC contracts are generally divided into two parts: Part I and Part II. Part I comprises the general conditions of the contract, such as the rights and obligations of each party, payment procedures, variation, certification, and dispute resolution. Part II of the contract is concerned with the conditions of particular application, and it is used to introduce project-specific clauses such as language of the contract, choice of law, and the name of the person or firm appointed to act as Engineer or Employers representative for the project. The appendix typically contains sample documents to be used for the procurement process.

Most FIDIC forms have a default hierarchy for the documents forming the contract. The order of priority is set out in the contract, and in the event of inconsistency, the first on the list takes precedence. However, the parties may rearrange the priority of documents or stipulate that no priority or order of hierarchy will apply to the contract. This can be done in Part II of the contract.

1. The Contract Agreement
2. The Letter of Acceptance (this is the formal acceptance of the contractor's tender and marks the formation of the contract)
3. The Letter of Tender
4. Part II – the conditions of particular application
5. Part I – general conditions of contract
6. The Specification and Drawings (Red Book), The Employer’s Requirements (Yellow Book), the Schedules (Red and Yellow Books)
7. Further documents (if any), listed in the Contract Agreement or in the Letter of Acceptance.

The parties are allowed to rearrange the priority of documents or stipulate that no priority or order of hierarchy will apply to the contract. This can be done in Part II of the contract.

Dispute resolution

FIDIC contracts follow a multi-tier dispute resolution process, with an emphasis on amicable settlement. In the first step, disputes are submitted for adjudication before an Engineer or a Dispute Board. If one or both parties are dissatisfied, a period is allowed for amicable settlement. If the dispute cannot be settled during the amicable settlement period, the final stage is arbitration. FIDIC contracts provide that the arbitration rules of the International Chambers of Commerce should apply by default in the arbitration of disputes arising from the contract.

Bias for English law

The first FIDIC contracts were based on English law principles, but subsequent contracts have incorporated the principles of other legal systems, particularly the civil law system. Nonetheless, the basic framework of English law principles has endured, and provisions relating to liquidated damages have been maintained.

Since 1957, future FIDIC contracts have successfully incorporated the principles of other legal systems especially the civil law system. However, the basic framework of English law principles has survived. For instance, provisions relating to liquidated damages have been maintained.
 

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