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Payment, Time for


Performance Security


Performance Security - Claims Under


Performance Security - Period of Validity


Period of Defects Liability


Permanent Works Designed by Contractor


Physical Obstructions or Conditions - Not Foreseeable


Physical Obstructions or Conditions - Engineers Determination


Plant and Materials, Transport of


Plant, Conditions of Hire


Plant, Customs Clearance


Plant, Employer not Liable for damage to


Plant, etc - Exclusive Use for Works


Plant, Quality of


Plant, Re-export of


Plant, Removal of


Policy of Insurance - Compliance with Conditions


Possession of Site


Possession of Site, Failure to Give


Power of Engineer to Fix Rates


Priority of Contract Documents


Programme to be Submitted


Progress - Disruption of


Progress - Rate of


Protection of Environment


Provision to Indemnify Contractor


Provision to Indemnify Employer


Provisional Sums, Currencies of Payment


Provisional Sums, Definition


Provisional Sums, Production of Vouchers


Provisional Sums, Use of


Quality of Materials and Workmanship




Rate of Progress


Rates of Exchange


Rates, Power of Engineer to Fix


Rectification of Loss or Damage


Reduction of Liquidated Damages


Re-export of Plant


Regulations, Statutes, etc, Compliance with




Release from Performance


Remedies for Default of Contractor


Remedying of Defects


Remedying of Defects, Cost of


Remedy on Contractor's Failure to Insure


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Removal of Contractor's Employees


Removal of Contractor's Equipment


Removal of Improper Work, Materials or Plant


Removal of Plant, etc


Responsibility to Rectify Loss or Damage


Responsibility Unaffected by Approval


Restriction on Working Hours


Resumption of Work


Retention Money, Payment of


Returns of Labour and Contractor's Equipment


Revised Programme


Rights of Way and Facilities


Risks, Employer's


Risks, Special


Roads, etc - Damage by Extraordinary Traffic


Roads, Interference with Access to




Safety, Security and Protection of the Environment


Samples, Cost of


Security, Safety and Protection of the Environment




Singular and Plural


Site, Clearance on Completion


Site, Contractor to Keep Clear


Site, Inspection of by Contractor


Site Operations and Methods of Construction


Site, Possession of


Special Risks


Staff, Engagement of


Statement at Completion


Statement, Final


Statutes, Regulations, etc, - Compliance with




Subcontractors, Nominated


Subcontractors, Responsibility of the Contractor for Acts and Default of


Subsequent Legislation


Substantial Completion of Sections or Parts


Sufficiency of Tender


Supply of Plant, Materials and Labour


Surfaces Requiring Reinstatement


Suspension, Engineer's Determination


Suspension lasting more than 84 days


Suspension of Work


Taking Over Certificate


Taking Over of Sections or Parts


Tender Documents


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Tender, Sufficiency of


Termination of Contract by Employer


Termination of Contract by Employer, Assignment of Benefit


Terms of Insurance


Tests, Cost of


Tests not Provided for - Cost of


Third Party Insurance


Time for Completion


Time for Completion, Extension of


Time for Payment


Traffic, Extraordinary


Traffic, Interference with


Traffic, Waterborne


Transport of Contractor's Equipment and Temporary Works


Transport of Materials and Plant


Uncovering Work and Making Openings


Unfulfilled Obligations


Urgent Remedial Work


Valuation at Date of Termination by the Employer




Variations, Daywork Basis


Variations, Exceeding 15%


Variations, Instructions for


Variations, Power of the Engineer to Fix Rates


Vouchers, Production of


War, Outbreak of


Watching and Lighting etc


Waterborne Traffic


Work, Examination of Before Covering Up


Work, Improper, Removal of


Working Hours, Restriction of


Workmanship, Quality of


Workmen, Accident or Injury to


Works, Care of


Works, Completion of ( Defects Liability Certificate)


Works, Commencement of


Works, Insurance of


Works, Remedying of Defects


Works, Time for Completion of


Works to be Measured


Work, Suspension of


Work to be in Accordance with the Contract


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CLAUSE 1 : Definition and Interpretation

This clause sets out the meanings of almost all the terms in the contract which are given capital letters. The definitions of "Defects Liability Period" and "nominated Subcontractor" are to be found in clause 49.1 and clause 59.1 respectively. In addition, four terms which have not been given capital letters are also defined.

The headings and marginal notes are to be ignored when interpreting the Contract.












Singular words and plural words may be interchangeable where the context so requires.

Notices, consents, approvals, certificates and determinations must be given in writing and, with the exception of notices, must not be unreasonably withheld or delayed.

The following definitions are new to the 4th Edition: Subcontractor, Bill of Quantities, Tender, Letter of Acceptance, Contract Agreement, Appendix to Tender, Commencement Date, Time for Completion, Tests on Completion, Retention Money, Plant, Section, day, foreign currency and writing. What in the 3rd Edition was referred to (but not defined as) "Certificate of Completion", is now defined as the Taking-Over Certificate. "Constructional Plant" has now become Contractor's Equipment. The only definition that has not been repeated in the 4th Edition is "Approved". This definition has essentially been overtaken by clause 1.5 (Notices, Consents etc) which requires approvals to be in writing. It should be noted that all the definitions are subject to the opening words "except where the context otherwise requires".

Sub-clauses 1.2 and 1.4 are taken from the 3rd Edition; sub-clauses 1.3 and 1.5 are new.


(a)(i) "Employer" and "Contractor" - If the Contract Agreement has (a)(ii) Been entered into, "Employer" and "Contractor" are already defined in that Agreement and thus in these conditions. Naturally, the parties must ensure that the entries in Part II and the Agreement are identical.

The Contractor's ability to assign is restricted by clause 3.1 (Assignment of contract) whereby no part of the contract may be assigned without the prior consent of the Employer. Under that clause, the consent "shall be at the sole

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discretion of the Employer". Thus, the Employer has the right to refuse an assignment on any grounds. The Contractor's consent to an assignment is however subject to clause 1.5 (Notices, consents etc) whereby "any such

shall not be unreasonably withheld or delayed". Thus, the Employer's

ability to assign is greater than that of a Contractor. It is submitted that bona fide

concern over the financial standing of the Employer's proposed assignee would be reasonable grounds for refusing consent. It is undoubtedly right that having carefully selected a Contractor to execute the works, the Employer should have a right of veto over any proposed assignment.


An attempted assignment without the requisite consent would, in English law at least, be ineffective. Again under English law, an assignment by an Employer with consent would not relieve that Employer of a primary obligation to pay the Contractor. The Engineer's contract of engagement would also normally need to be assigned or novated to the new Employer.

(a)(iii) "Subcontractor" - Under clause 4.1 (Subcontracting), it should be noted that the Contractor is not required to obtain consent for the provision of labour. Thus, a labour-only subcontractor does not fall within the definition.

(a)(iv) "Engineer" - By clause 1.3 (Interpretation), the Engineer may be a firm, a corporation or other organisation having legal capacity. The Engineer must be named in Part II. It is a new feature of the 4th Edition that there is no ability in the Employer to replace the Engineer. In the 3rd Edition and ICE 5th and 6th, there is defined the "Engineer appointed from time to time by the Employer". The present definition will not be a problem if the Engineer is named as a firm; however, the Engineer will often be a named individual. According to the Guide issued by FIDIC on the 4th Edition, the reason for this change from the 3rd Edition is that the identity of the Engineer (and his reputation) has been a factor in the calculation of the Contractor's tender. This, it is submitted, is a mistake. Whilst it is certainly true that a Contractor might well price work differently if the Engineer is a respected independent professional on the one hand rather than a government department's Chief Engineer on the other, the functioning of the contract is so dependent upon the existence of an Engineer there must be a substantial risk of the project falling apart if its survival is dependent upon the parties' ability to agree a replacement Engineer in the event that the named Engineer died or otherwise ceased to act. If the parties were in dispute at the time, the prospects for agreement must be limited.

In theory, a dispute over the replacement Engineer would be one capable of resolution under the arbitration clause. However, in the absence of an Engineer, it is difficult to see how the disputes procedure can commence. It may be possible to draw a distinction between situations where the Engineer has died and other circumstances where he is simply failing or refusing to act. In the latter circumstances, the Engineer is still in existence and the disputes procedure can advance by default. If he is dead, there does not seem to be any way forward without agreement between the parties. The Employer is obliged to try to replace him and obtain the Contractor's agreement, it is submitted. For a case on the

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more traditional position, see Croudace v Lambeth (1986) 33 BLR 20, where the Court of Appeal held the Employer liable in damages for failing to replace the certifier after the retirement of the named person.

A similar distinction may be made with regard to the powers delegated to the

Engineer's Representative under clause 2.3 (Engineer's authority to delegate). If the Engineer is alive, it is arguable that the Engineer's Representative's powers are unimpaired. However, the Contractor's ability to question any communication of the Engineer's Representative by reference to the Engineer under clause 2.3(b) could effectively bring the Engineer's Representative's powers to an end.

If the Engineer died or otherwise ceased to act and the parties are unable to

agree to a replacement, the effects, it is submitted, would be as follows:-

(1) The Employer would not be in breach of his obligation to ensure that the

Engineer exercises his functions provided that he has taken reasonable steps to propose an alternative Engineer and has not been unreasonable in refusing any nominee of the Contractor. Compare clause 69.1 (Default of Employer) item (b)

"interfering with or obstructing


such certificate".

(2) Nor would the Employer be in breach for failing to pay the Contractor in

the absence of interim certificates. The obligation would probably be to pay when the works were complete.

(3) Clause 66.1 (Release from Performance) is not appropriate as any

impossibility is not "outside the control of both parties". Thus, it may be arguable

that the fundamental obligations of the parties remain intact:-


responsibilities) to execute and complete the works survives; and









(ii) the obligation of the Employer to pay for those works as expressed in

Article 4 of the Contract Agreement or as stated in the Letter of Acceptance or by implication will also survive. The Employer may, however, have no obligation to make any payment until the works are complete.

(4) In the event of any delay which is not the responsibility of the Contractor,

time would be at large because of the absence of the Engineer to grant extensions of time. If all the delay was the Contractor's responsibility, it may be arguable that clause 47 (Liquidated damages for delay) would continue to operate as it is not dependent upon the existence of the Engineer, who is not

mentioned in the clause. However, substantial completion is certified by the Engineer. The Contractor could be liable for breach of an obligation to complete within a reasonable time, once time was set at large.

Thus it is just conceivable that a project could limp onwards without an Engineer. Plainly, it is most unsatisfactory and an Employer might be well advised, having exhausted attempts to agree a new Engineer simply to appoint one and

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thereafter argue, when the Contractor accepts interim payment as certified by the Engineer, that the Contractor has effectively consented to the new Engineer.

For a discussion on when the Engineer's role comes to an end and he is functus officio, see under clause 2.1 (Engineer's duties and authority). See also the comments under clause 67.1 (Engineer's decision).

(a)(v) "Engineer's Representative" - The Engineer's Representative is referred to in only three other clauses: clause 2 (Engineer and Engineer's Representative) which deals with the delegation of powers by the Engineer to his Representative; clause 13.1 (Work to be in accordance with contract) whereby the Contractor is obliged to take instructions from the Engineer's Representative and clause 15.1 (Contractor's superintendence) on the same subject. In view of the delegation provision, express mention of the Engineer's Representative is unnecessary.

(b)(i) "Contract" - There is no significance in the order of contract documents given here. See clause 5.2 (Priority of contract documents). The reference in earlier editions to a "Schedule of Rates and Prices, if any" has not been repeated in this edition. It should be noted that the term "Contract" includes the Drawings and it is therefore arguable that the term includes future drawings. In order to make sense of expressions such as "increase or decrease the quantity of any work included in the Contract" in clause 51.1 (Variations), it is necessary to apply the exception in the opening words of the current sub-clause: "except where the context otherwise requires".

(b)(ii) "Specification" - As the specification includes any variations and as the specification is part of the contract, the contract is itself variable. Thus, strictly speaking, the expression "increase or decrease the quantity of any work included in the Contract" in clause 51.1 (Variations) is somewhat circular. Equally, the definition of Works is defined by reference to the contract and thus incorporates variability. It must be doubted that this point is ultimately of great significance.

(b)(iii) "Drawings" - The term is very widely defined. The inclusion of samples, patents and models is perhaps surprising and produces curious results if taken literally. For example, under clause 6.1 (Custody and supply of drawings and documents), the Contractor is to provide for copies. This is one of the occasions when the opening words of this sub-clause, "except where the context otherwise requires", will be most relevant. It is also important to appreciate that this definition is not limited to drawings etc in existence at the time time the Contract is entered into but refers to all future drawings.

(b)(iv) "Bill of Quantities" - Surprisingly, the only other reference to the prices in the Bill of Quantities is in clause 12.1 (Sufficiency of Tender): there is no express indication at all that the prices are to be used for valuation other than in relation to variations. See in particular clause 55 (Quantities) and clause 56 (Works to be measured). The 4th Edition no longer contains a reference to the Schedule of Rates.

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(b)(v) "Tender" - It is important to note that the Tender is a document "as accepted by the Letter of Acceptance". Thus, it is not necessarily the tender as submitted by the Contractor but the result of any negotiation prior to the placing of the order. Any programme included in the tender will become part of the contract as the tender is a contract document: for diccussion of this see under clause 14.1 (Programme to be submitted).

(b)(vi) "Letter of Acceptance" - There is no specified form for the Letter of Acceptance and careful attention must be paid to its contents, particularly in view of the priority given to the Letter of Acceptance by clause 5.2 (Priority of contract documents). It is second only to the Contract Agreement which is an optional document. It is important to ensure that the Letter of Acceptance matches the tender or, if there have been subsequent negotiations, an amended version of that tender. Otherwise, the Letter of Acceptance would be no more than a counter-offer which would require a further acceptance from the Contractor before a contract was formed. As "the Tender" is a contract document, conflict would result if the tender was not amended. It is also important to ensure that, if a Contract Agreement is used, the Letter of Acceptance and Contract Agreement also match. There are no terms in the contract which govern the Letter of Acceptance but it is used extensively as a trigger for periods of time by which certain activities have to be performed. These are as follows:-

Clause 10.1 (Performance security) - 28 days Clause 14.1 (Programme to be submitted) - period prescribed in Part II Clause 14.3 (Cashflow estimate to be submitted) - period prescibed in Part II Clause 41.1 (Commencement of Works) - period stated in the Appendix to Tender Clause 57.2 (Breakdown of lump sum item) - 28 days

The importance of the Letter of Acceptance as a starting point in the conditions of contract reinforces the importance of ensuring that the Letter of Acceptance is an acceptance and not a counter-offer. It would make a nonsense of the various time periods if they were running before a contract had been entered into.

(b)(vii) "Contract Agreement" - A form of Agreement is provided and referred to at clause 9.1 (Contract Agreement). Both the definition of Contract at clause 1.1(b)(i) and clause 5.2 (Priority of contract documents) allow for further documents to be incorporated as contract documents. The Contract Agreement should be amended to record such further documents.

(b)(viii) "Appendix to Tender" - As commented under the definition of Tender above, there may be negotiations which alter the contents of the Tender and the Appendix to Tender before the contract is entered into. This definition therefore refers to the Appendix as amended.

(c)(i) "Commencement Date" - This definition determines the date upon which time begins to run on the project. The notice to commence is not in a specified form. See generally the commentary to clause 41 (Commencement of Works).

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(c)(ii) "Time for Completion" - This is the contractual completion date as set out in the contract subject to any extensions under clause 44. Substantial completion must be achieved under clause 48.1 (Taking-over certificate) by this date, failing which liquidated damages will be payable under clause 47.1 (Liquidated damages for delay).

(d)(i) "Tests on Completion" - These tests will often include commissioning and are referred to in clause 48 (Taking-Over) as being a prerequisite to substantial completion and the issue of a Taking-over certificate for the whole or any part of the works for which such a test is prescribed.

(d)(ii) "Taking-Over Certificate" - No form is prescribed for this certificate: clause 48.1 (Taking-Over Certificate) only specifies that it should state the date on which, in the Engineer's opinion, the works were substantially completed.

(e)(i) "Contract Price" - It is important to appreciate that the Contract Price is a fixed sum as stated in the Letter of Acceptance and the term does not include any adjustments to the contract price for variations etc. For more on this point, see the commentary under clause 69.4 (Contractor's entitlement to suspend work).

(e)(ii) "Retention Money" - For commentary on the uncertainty of the retention provisions, see under clause 60.3 (Payment of Retention money).

(f)(i) "Works" - This term is given an adjusted meaning under clause 49.1 (Defects Liability Period). The definition of Temporary Works is not without difficulty as set out under (f)(iii) below. As there are dangers in including Temporary Works in the definition of Works, the draftsman has taken the precaution of putting flexibility ahead of certainty with the words "or either of them as appropriate". This reinforces the opening words of the sub-clause "except where the context otherwise requires".

"Permanent Works" - This definition now includes express reference to

Plant, a recognition of the growing amount of machinery etc. included in civil engineering projects.


(f)(iii) "Temporary Works" - This definition is circular with the definition of Contractor's Equipment. As noted in the commentary to clause 41 (Commencement of Works), this is unfortunate as the failure to commence the Works is a ground for determination under clause 63.1 (Default of Contractor). See clause 31.2 (Facilities for other contractors) for the obligation to make the temporary works available to other contractors and clause 32.1 (Contractor to keep site clear) and 33.1 (Clearance of site on completion) for the obligation to remove temporary work. It should be borne in mind that temporary works are not always removed, for example temporary linings to tunnels or temporary roads. By clause 54 (Contractor's Equipment, Temporary Works and materials) there is

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an obligation upon the Contractor to provide temporary works exclusively for the project.

(f)(iv) "Plant" - This is a new definition not found in the 3rd Edition or ICE 5th or 6th. It might be confusing as plant is normally regarded as meaning Contractor's machinery. Instead, this means the plant to be installed as part of the permanent works. The Contractor's machinery is now defined as Contractor's Equipment.

(f)(v) "Contractor's Equipment" - In the 3rd Edition and ICE 5th, the Contractor's machinery is called "Constructional Plant". The current definition is circular with the definition of Temporary Works. As noted in the commentary to clause 41 (Commencement of Works), this is unfortunate as the failure to commence the Works is a ground for determination under clause 63.1 (Default of Contractor). ICE 6th has adopted the term Contractor's Equipment.

(f)(vi) "Section" - The Works may be broken down into Sections and parts. The

difference is that a Section is specifically identified in the contract whereas a part, which is not defined, seems to be any other sub-division including a sub-division of a Section. See this distinction in operation in clause 47.2 (Reduction of liquidated damages), clause 48.2 (Taking over of sections or parts) and clause

48.3 (Substantial completion of parts).

(f)(vii) "Site" - This definition is a variant upon the form used in the 3rd Edition and ICE 5th. This definition falls into two parts:-


Places provided by the Employer where the Works are to be executed;



Other places which are specifically designated in the contract as forming

part of the site.

Compare 3rd Edition and ICE 5th which break down as follows:-


places on, under in or through which works are to be executed; and


places provided by the Employer or specifically designated in the contract

as forming part of the site.

The essential difference is that (a) is qualified by the words "provided by the Employer" in this Edition but (b) contains those words in the 3rd Edition and ICE 5th. One significance of this is that the Employer cannot be in breach of clause

42.1 (Possession of site and access thereto) by failing to give possession of the

site if the site is itself defined as places provided by the Employer. As the Site will normally be defined in the contract, this should not normally give rise to problems. Nor, it is submitted, should the omission of the words "on, under, in or through" create difficulties. If the failure to give possession is the failure of the

Employer to organise the removal, for example, of an underground pipe or cable conduit, even though the possession of the surface has been given to the

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