FIDIC Contracts for VT Project Managers (Part 2)

In the first part of this article, you can read about, the definition of FIDIC Contract, and its types along with the references. Click here to read PART 1 if you have missed it.

Advantages And Disadvantages of FIDIC Contracts

FIDIC contracts, which stand for International Federation of Consulting Engineers, are widely used in the construction industry worldwide.

There are several advantages to using FIDIC contracts.

Firstly, these standardized contracts provide a balanced and equitable framework for both parties involved in a construction project.

The contracts clearly outline the rights and obligations of the employer and the contractor, helping to minimize the potential for disputes.

Secondly, FIDIC contracts offer a comprehensive set of provisions that cover various aspects of a project, including design, construction, and post-construction activities.

This level of detail ensures that all parties are clear on their responsibilities, reducing the likelihood of misunderstandings and conflicts.

Lastly, FIDIC contracts are internationally recognized and respected, particularly by multilateral agencies and major international financial institutions, which can give contractors a competitive edge when bidding on projects.

However, there are also some disadvantages to using FIDIC contracts.

One of the main drawbacks is the complexity and length of these contracts.

They contain a large number of clauses and subclauses, which can be overwhelming for parties who are not familiar with contract law or the specific terminology used in the construction industry.

Additionally, FIDIC contracts are often criticized for being biased towards the employer.

Some provisions, such as the allocation of risks, payment terms, and dispute resolution procedures, may place an unfair burden on the contractor and limit their ability to protect their interests.

Lastly, due to the standardized nature of FIDIC contracts, they may not always fully capture the unique circumstances and requirements of a specific project.

This can lead to difficulties in adapting the contract to specific local laws and regulations, resulting in potential gaps or conflicts that need to be resolved during the project execution.

In conclusion, FIDIC contracts offer numerous advantages in terms of providing a fair and comprehensive framework for construction projects.

They help to reduce disputes and ensure clear roles and responsibilities for all parties involved.

Nevertheless, their complexity, potential bias towards the employer, and the need for customization to specific project circumstances can pose challenges.

It is crucial for both employers and contractors to carefully evaluate the advantages and disadvantages of FIDIC contracts before using them and to seek legal advice to ensure their rights and interests are protected.

To be continued……..

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References:

1. British Institute of Economic and Political Scince lectures,(B.I.E.P.S). Londonn,United Kingdom.
2. I.C.A.C.C. Cairo,Egypt.
3. The Economic Unit of the League of Arab States , Cairo, Egypt.
4. The International Commercial Arbitration Center Cairo, Egypt.
5.New legal rules in FIDIC contracts, Dr. Samir Hamed Abdel Aziz El-Gammal, Cairo,Egypt.
6. Al-Morsal electronic network.
7. United Nations International Treatirs.