Notices under FIDIC Silver Book 2017 Edition Part 11

This is part 11 in an ongoing series on notices under FIDIC Silver Book 2017. This post covers the provision for notices in Clause 15 (Termination by Employer).

Clause 15 (Termination by Employer)

Sub-Clause 15.1 (Notice to Correct). If the Contractor fails to carry out any obligation under the contract, the Employer may give a notice describing that failure. The Contractor shall then remedy it within a specified time. The time specified in the notice to correct shall not imply any Extension of Time for completion. The Contractor shall immediately respond by giving a notice to the Employer describing the measures the Contractor will take to remedy the failure and stating the commencement date in order to comply with the time specified in the notice to correct.

Sub-Clause 15.2 (Termination for Contractor’s Default)
Sub-Clause 15.2.1 (Notices). Under this sub-clause, there are two means of Employer's termination. One is the Employer giving Notice of his intention to terminate the contract. Alternatively, the Employer can directly give Notice of termination.

The Employer shall be entitled to give a notice to the Contractor of the Employer's intention to terminate the contract if the Contractor:

  • fails to comply with:
    • a Notice to Correct,
    • a binding agreement, or
    • a decision of the DAAB,
  • abandons the Works, or
  • without reasonable excuse, fails to:
    • proceed with the Works,
    • comply with a Notice of Rejection,
    • comply with Sub-Clause 4.2 (Performance Security).without reasonable excuse, fails to

Unless the Contractor remedies the matter described in this notice within 14 days of receiving the notice, the Employer may, by giving a second notice to the Contractor, immediately terminate the contract in line with Sub-Clause 15.2.2 (Termination). The date of termination shall be the date of the Contractor receiving the second notice.

Similarly, the Employer shall be entitled to give a Notice of termination if the Contractor:

  • subcontracts the whole, or parts, of the Works in breach of Sub-Clause 4.4 (Subcontractors),
  • becomes bankrupt, or
  • is found to have engaged in corrupt, fraudulent, collusive practice at any time in relation to the works or contract.

In this case, the Employer may immediately terminate the contract and the date of termination shall be the date the Contractor receives this notice.

Sub-Clause 15.5 (Termination for Employer’s Convenience). If the Employer wants to terminate the contract at any time for the Employer's convenience, he shall give a notice of such termination to the Contractor. The termination under this shall take effect 28 days after the later of the dates on which,

  • the Contractor receives this notice, or
  • the Employer returns the performance security.

Unless and until the Contractor has received payment of the amount due under Sub-Clause 15.6 (Valuation after Termination for Employer's Convenience), the Employer shall not execute the works or arrange other entities to execute the work.

This is the eleventh in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, part six on Clauses 7 and 8 can be read here, part seven on Clauses 9 and 10 can be read here, part eight on Clause 11 can be read here, part nine can be read here, and part ten can be read here. The next installment will cover Clause 16.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as a LinkedIn video, viewable here and here.


Notices under FIDIC Silver Book 2017 Edition Part 10

This is the tenth in a multi-part series on notices under the 2017 Edition of FIDIC Silver Book. This post covers the provision for notices in Clause 13 (Variations and Adjustments) and Clause 14 (Contract Price and Payment).

Clause 13 (Variations and Adjustments)

Sub-Clause 13.1 (Right to Vary). The Contractor shall be bound by each variation instructed and shall execute it without delay unless the Contractor promptly gives a notice to the Employer stating his reasons. If a notice is given, the Employer shall respond by giving a notice to the Contractor, cancelling, confirming, or varying the instruction.

Sub-Clause 13.2 (Value Engineering). The Contractor may submit a written proposal for Value Engineering if it benefits the Employer. The proposal shall be prepared at the cost of the Contractor, including all details. The Employer shall respond by giving a notice of the Employer's consent or otherwise.

Sub-Clause 13.3.1 (Variation by Instruction). The Employer may instruct a variation by giving a notice to the Contractor in accordance with Sub-Clause 3.4 (Instructions). The Contractor shall proceed with execution of the variation and shall, within 28 days of receiving the Employer's instruction, submit to the Employer’s Representative detailed particulars.

Sub-Clause 13.3.2 (Variation by Request for a Proposal). The Employer may request a proposal before instructing a variation by giving a notice to the Contractor. The Contractors shall promptly respond to this notice, either by submitting a proposal or by giving reasons why the Contractor cannot comply by reference to the matter as described in Sub-Clause 13.1 (Right to Vary).

Sub-Clause 13.4 (Provisional Sums). If the Employer instructs a Contractor to submit details as stated for each provisional sum, it may be quotations from the Contractor, supplier and/or Subcontractor for all or some of the items of the work to be executed or other things to be purchased, then the Employer may respond by notice either instructing the Contractor to accept one of these quotations or revoking the instruction. If Employer does not so respond within seven days, the Contractor is entitled to accept any of these quotations at his discretion.

Sub-Clause 13.6 (Adjustments for Changes in Law). If any adjustment to the execution of the Works become necessary as a result of any change in the law that leads to delay or increase in cost, the Contractor shall promptly give a notice to the Employer. Alternatively, if there is a decrease in cost, the Employer shall promptly give a notice to the Contractor. Thereafter, the Employer shall either instruct a variation under Sub-Clause 13.3.1 (Variation by Instruction) or request a proposal under 13.3.2 (Variation by Request for a Proposal).

Clause 14 (Contract Price and Payment)

Sub-Clause 14.6.1 (Notice of Interim Payment). After receiving the Contractor’s statement and supporting documents, the Employer shall give a notice of amount considered due within 28 days.

Sub-Clause 14.6.2 (Withholding Amounts in an Interim Payment). If the Employer wants to withhold an interim payment, which would be less than the minimum amount of an interim payment stated in the Contract Data, the Employer shall promptly give a notice to the Contractor with his calculations of the amount and reasons.

Sub-Clause 14.6.3 (Correction or Modification). If the Contractor was or is failing to perform any obligation under the contract, the value of that may be withheld until it is performed. The Employer will promptly give a notice describing the failure with supporting particulars.

If the Contractor considers that interim payment does not have any amounts to which he is entitled, these amounts shall be identified in the next statement as “identified amounts”. The Contractor, by giving a notice refers this matter to the Employer’s Representative under Sub-Clause 3.5 (Agreement or Determination) shall apply. The Employee shall then make any correction or modification that should be made in the next interim payment.

Sub-Clause 14.11.1 (Draft Final Statement) The Contractor shall submit a draft final statement within 56 days after the issue of the Performance Certificate, which shall include:

  1. The value of all Works done,
  2.  any further sums due at the date of issue of the Performance Certificate, and
  3. any other amounts that have or will become due after the issue of the Performance Certificate, and amounts by reference to the matters like Contractor’s claim for Extension of Time, any matter referred to the DAAB and any matter to which a Notification of Dissatisfaction has been given under Sub-Clause 21.4 (Obtaining DAAB's Decision).

Except for any amount under number 3 in this list, if the Employer disagrees with any part of the draft final statement, he shall give a notice to the Contractor who shall then submit such information within the time stated in the notice and make changes in the draft as may be agreed between them.

If the Contractor fails to submit a draft final statement within 56 days, the Employer shall request the Contractor to do so. If the Contractor then fails to submit it within a period of 28 days, within a further 28 days after this, the Employer shall give a notice to the Contractor stating the final payment with supporting particulars.

Sub-Clause 14.13 (Final Payment). Within 28 days after receiving the final statement and discharge the Employer shall give a notice of the amount considered finally due. The Employer then makes the payment within 56 days after receiving the final statement and discharge.

This is the tenth in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, part six on Clauses 7 and 8 can be read here, part seven on Clauses 9 and 10 can be read here, part eight on Clause 11 can be read here, and part nine can be read here. The next installment will cover Clause 15.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as three LinkedIn videos, viewable here, here, and here


Notices under FIDIC Silver Book 2017 Edition Part 9

This is the ninth in a multi-part series on notices under the 2017 Edition of FIDIC Silver Book. This post covers the provision for notices in Clause12 (Tests after Completion).

Clause 12 (Tests after Completion)

Sub-Clause 12.1 (Procedure for Tests after Completion). Not later than 42 days before the date the Contractor intends to commence the Tests after Completion, the Contractor shall submit a detailed test programme showing the intended timing and resources required. The Employer may review and give a notice to the Contractor within 14 days, stating the extent to which it does not comply with the contract.

The Contractor shall then revise the test programme to rectify such non-compliance. If no notice is issued from the Employer within 14 days, the Employer shall be deemed to have given a notice of no-objection.

In addition to any dates shown in the test programme, the Contractor should give a notice to the Employer of not less than 21 days of the date after which the Contractor will be ready to carry out each of the Tests after Completion.

The Contractor shall commence the Tests after Completion within 14 days after the date stated in the notice or on such date as the Employer shall instruct. The Contractor shall not commence the Tests after Completion until a notice of no-objection is given or is deemed to have been given to the Contractor's test programme.

Sub-Clause 12.2 (Delayed Tests). If the Contractor has given a notice under Sub-Clause 12.1 (Procedure for Tests after Completion) that the Works or a Section is ready for Tests after Completion and these tests are unduly delayed due to the Employer, then the Contractor shall carry out the test as soon as practicable.

In any case, the tests should be carried out before the expiry date of the Defects Notification Period (DNP). If the Contractor incurs cost as a result, he shall be entitled subject to Sub-Clause 20.2 (Claims for Payments and/or Extension of Time).

Note: If, for a reason not attributable to the Contractor, a Test after Completion on the Works cannot be completed during the DNP, then the Works or Section shall be deemed to have passed this Test after Completion.

Sub-Clause 12.4 (Failure to Pass Tests after Completion). If the Works fail to pass a Test after Completion, the Contractor shall propose to make adjustments or modifications to the works by giving a notice to the Employer. The Contractor may be instructed by the Employer with a notice that right of access to the works cannot be given until a reasonable time that is convenient to the Employer.

The Contractor shall remain liable to carry out the adjustments or modifications and to satisfy this Test within a reasonable period of receiving the above notice. If there is no notice from Employer, the Contractor shall be relieved of the obligation to make such adjustments or modifications, and the Works shall be deemed to have passed this Test after Completion.

This is the ninth in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, part six on Clauses 7 and 8 can be read here, part seven on Clauses 9 and 10 can be read here, and part eight on Clause 11 can be read here. The next installment will cover Clauses 13 and 14.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as two LinkedIn videos, viewable here and here


Notices under FIDIC Silver Book 2017 Edition Part 8

This is the eighth in a multi-part series on notices under the 2017 Edition of FIDIC Silver Book. This post covers the provision for notices in Clause 11 (Defects after Taking Over).

Clause 11 (Defects after Taking Over)

Sub-Clause 11.1 (Completion of Outstanding Work and Remedying Defects). If a defect appears or damage occurs during the Defects Notification Period (DNP) of which a notice is given to the Contractor by the Employer on/before the expiry date of the DNP, then the Contractor will execute all works required to remedy defects or damage.

Subsequently,

  1. the Contractor and the Employer's Personnel shall jointly inspect the defects or damage,
  2. the Contractor shall then prepare and submit a proposal for necessary remedial work and
  3. Sub-Clause 7.5 (Defects and Rejection) shall apply.

Sub-Clause 11.2 (Cost of Remedying Defects). If the Contractor considers that the work is attributable to a reason beyond his obligation, he shall give a notice to the Employer; the Employer’s Representative shall proceed under Sub-Clause 3.5 (Agreement or Determination). If it is agreed or determined that the work is attributable to a cause other than his obligations, Sub-Clause 13.3.1 (Variation by Instruction) shall apply as if such work had been instructed by the Employer.

Sub-Clause 11.4 (Failure to Remedy Defects). If the remedying of any defect or damage is unduly delayed by a Contractor, a date may be fixed by the Employer as a notice to the Contractor, allowing reasonable time by when the defects or damage is to be remedied.

If the Contractor fails to remedy the defects by the date stated and it was to be executed at the Contractor's cost, then the Employer may:

  1. carry out the work by own or by others and is entitled to Sub-Clause 20.2 (Claims for Payment and/or Extension of Time), or
  2. accept the damaged or defective work and is entitled under Sub-Clause 20.2 to payments of performance damages or a reduction in the contract price, or
  3. treat any part of the work as an omission or
  4. terminate the contract as a whole with immediate effect and is entitled to Sub-Clause 20.2 (Claims for Payment and/or Extension of Time).

Sub-Clause 11.5 (Remedying of Defective Work Off-site). If, during the Defects Notification Period (DNP), the Contractor considers that any defect or damage in any plant cannot be remedied on the site, he shall give a notice with reasons requesting consent to remove the items for repair. Once the Employer gives consent, the Contractor may remove such item of plant.

As a condition of this consent, the Employer may require the Contractor to increase the amount of the Performance Security by the full replacement cost of the defective or damaged plant.

Sub-Clause 11.6 (Further Tests after Remedying Defects). Within seven days of completion of the work of remedying of any defect or damage, the Contractor shall give a notice to the Employer describing the remedies work and the proposed repeated test. If the Contractor fails to give notice within seven days, the Employer may give a notice to the Contractor within 14 days after the defect or damage is remedied, instructing the repeated tests that are necessary to comply with the contract. If the Employer fails to give notice within 14 days, then the Employer shall be deemed to have agreed with the Contractor's proposal.

Sub-Clause 11.7 (Right of Access After Taking Over). Whenever the Contractor intends to access any part of the Works during the DNP, the Contractor shall request access by giving a notice to the Employer describing the parts of the Works to be accessed, the reasons, and the preferred date for access.

Within seven days after receiving this notice, the Employer shall give a notice, either

  1. giving consent or
  2. proposing alternative dates with reasons.

If the Employer fails to give notice within seven days, the Employer shall be deemed to have given consent for the Contractor’s access on the preferred date stated in this notice.

Sub-Clause 11.8 (Contractor to Search). The Contractor shall, if instructed by the Employer, search for the cause of any defect on the date stated in the Employer's instruction or as agreed. If the Contractor fails to carry out the search, it may be carried out by the Employer's personnel, for which the Contractor shall be given a notice of the date when such a search will be carried out. The Contractor may attend at his own cost.

This is the eighth in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, part six on Clauses 7 and 8 can be read here, and part seven on Clauses 9 and 10 can be read here. The next installment will cover Clause 12.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as two LinkedIn videos, viewable here and here


Notices under FIDIC Silver Book 2017 Edition Part 7

This is the seventh in a multi-part series on notices under the 2017 Edition of FIDIC Silver Book. This post covers the provision for notices in Clauses 9 (Tests on Completion) and 10 (Employer’s Taking Over).

Clause 9 (Tests on Completion)

Sub-Clause 9.1 (Contractor’s Obligation). The Contractor shall submit within 42 days before the date the Contractor intends to commence the Tests on Completion, a detailed test programme showing the particulars. In addition to any dates shown in the test programme, the Contractor shall give a notice of not less than 21 days of the date after which the Contractor will be ready to carry out each of the Tests on Completion.

The Employer may review and then give a notice to the Contractor stating the extent to which it does not comply with the contract. If he gives a notice within 14 days’ time, the Contractor shall revise the test program to rectify such non-compliance. If there is no notice given within 14 days’ time, the Employer shall be deemed to have given a notice of no-objection.

During the trial operation, the Contractor shall give a notice to the Employer that they are ready for any other Tests on Completion, including performance tests. As soon as the works have passed each stage of the Tests on Completion, the Contractor shall submit a certified report of the results to the Employer.

The Employer shall review each report and may give a notice to the Contractor stating the extent to which the results of the test does not comply with the contract. If no notice is given, the Employer shall be deemed to have given a notice of no-objection.

Sub-Clause 9.2 (Delayed Test). If the Tests on Completion are unduly delayed by the Contractor, the Employer may give a notice to the Contractor requiring the Contractor to carry out the test within 21 days after receiving the notice.

If the Contractor is ready to carry out the test within 21 days’ time, he shall give a prior notice to the Employer of not less than seven days. If the Contractor fails to carry out the test within 21 days, then

  1. the Employer, after giving a second notice to the Contractor, shall proceed with the test, and
  2. the Contractor may attend and witness these tests.
  3. Within 28 days of these tests being completed, the Employer shall send a copy of the test results to the Contractor, and
  4. if the Employer incurs additional cost as a result of such testing, the Employer shall be entitled subject to Sub-Clause 20.2 (Claims for Payment and/or Extension of Time).

Clause 10 (Employer’s Taking Over)

Sub-Clause 10.1 (Taking over the Works and Sections). The Contractor may apply for a Taking Over Certificate by giving a notice to the Employer not more than 14 days before the works will, in the Contractor's opinion, be complete and ready for taking over.
Within 28 days’ time, the Employer shall, after receiving the Contractor's notice, either:

  • issue the Taking Over Certificate to the Contractor stating the date on which the works were completed in accordance with the contract, except for any minor outstanding works and any defects, or
  • reject the application by giving a notice to the Contractor with reasons. This notice shall specify the work to be done, that defects to be remedied, and the document to be submitted to enable the Taking Over Certificate to be issued. The Contractor shall then complete all the above duties before giving a further notice under the same Sub-Clause.

If the Employer does not issue a Taking Over Certificate or rejects the application within this period of 28 days, and if the conditions for the Taking Over Certificate have been fulfilled as stated in this clause, the Works shall be deemed to have been completed in accordance with the contract on the 14th day after the Employer receives the Contractor’s notice of application and the Taking Over Certificate shall be deemed to have been issued.

This is the seventh in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, and part six on Clauses 7 and 8 can be read here. The next installment will cover Clause 11.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as two LinkedIn videos, viewable here and here