What Qualifies as Force Majeure Under FIDIC?

One of our blog subscribers requested advice on force majeure under the FIDIC Red or Yellow books. The good news is that the FIDIC force majeure clauses are nearly the same under the Red, Yellow, Silver, and Gold forms of contract, so the following is applicable to all of them. Sub-Clause 19.1 (Definition of Force Majeure) the Red Book states that: ‘In this Clause, "Force Majeure" means an exceptional event or circumstance:      (a) which is beyond a Party's control,      (b) which such Party could not reasonably have provided against before entering into the Contract,      (c) which, having arisen, such Party could not reasonably have avoided overcome, and      (d) which is not substantially attributable to the other Party.’ Thus, to qualify as a force majeure event, it has to tick all of the boxes (a) to (d) above. The clause, however, goes on to offer further definitions as follows: Force Majeure may include, but is not limited to, exceptional events or circumstances of the kind…

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Claiming Prolongation Costs when there is no Entitlement to an Extension of Time

It is generally accepted that, in a situation where a contractor is entitled to an extension of time, he is also entitled to claim for time-related costs for site overheads and head office running costs for the additional time that he was obliged to remain on site. This is based upon a fundamental principle of law, that a party who has been prevented from performing his obligations by the other party is entitled to compensation to put him back into the position that he would have been in, had the act of prevention not occurred. In construction terms, this usually means the reimbursement of the contractor’s costs for providing site management, site establishment, plant and equipment, insurances, additional financing costs and the like and head office costs, which are often referred to as prolongation costs for the extended time.

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Claims for Prolongation Costs

It is common practice for contractors to link claims for additional payment for prolongation costs to claims for extensions of time and to present both as one single claim. Whilst this may be appropriate in straightforward circumstances, consideration should be given to dealing with the two subjects separately on the basis that the award of the extension of time is invariably easier to agree and determine because, at this stage at least, it does not cost the Employer money. This paper discusses claims for prolongation costs associated with extensions of time. The Institute of Construction Claims Practitioners has a detailed paper on this subject. To request a copy, please send an email with your contact details to hello@instituteccp.com with “Claims for Prolongation Costs” in the subject line. Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of member's only content on contracts and…

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