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1.4.1 Contractor Risks

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 New fitness for purpose indemnity

In the 2017 Yellow and Silver Books clause 17.4 creates a new indemnity by the Contractor in respect of any acts, errors or omissions by him in carrying out his design obligations which result in the works, when complete, not being fit for their purpose under clause 4.1.5In the 2017 Red Book this applies to the extent that the Contractor has the relevant design obligations.

In the pre‐release Yellow Book this indemnity was not within the exclusion of indirect or consequential loss or the overall liability cap under clause 17.6. However, following strong objections from contractors during the friendly review, this position has been reversed in the published 2017 Books. By a new clause 1.15 (Red and Yellow Books)/1.14 (Silver) the indemnity is now within both the exclusion and the cap.6

 Exceptions to liability limitation

The new clause 1.15/1.14 in the three 2017 Books does not include within the exclusion of indirect or consequential loss intellectual and industrial property rights under clause 17.3, or delay damages under clause 8.8, and the former is excluded from the total liability cap under the second paragraph of that clause.7Further, whereas in the 1999 editions clause 17.6 did not limit liability in any case of fraud, deliberate default or reckless misconduct, the new clause 1.15/1.14 adds gross negligence to this list.8

 Delay damages and termination

The 1999 editions provide, by clause 8.7, for a maximum amount of delay damages. This is also the case in the 2017 editions, but the 2017 Books give the Employer a new right to terminate the Contract under clause 15.2.1(c) if the Contractor exceeds this limit.9

 Adverse climatic conditions

Clause 8.4(c) in the 1999 Red and Yellow Books gives the Contractor a right to claim an extension of time in respect of exceptionally adverse climatic conditions, but the meaning of this expression often gave rise to dispute. Clause 8.5(c) in the 2017 editions of the two Books goes some way to providing clarity, but at the expense of limiting the scope of this ground to adverse climatic conditions at the site which are unforeseeable having regard to climatic data made available by the Employer and/or which are published in the relevant country for the geographical location of the site.10By thus limiting the conditions to those affecting the site only, the Contracts now exclude claims based on adverse conditions elsewhere which affect the Contractor's ability to maintain progress (by, for example, interfering with supply chains).

 Cost of remedying defects/training

Red Book contractors should note that clause 11.2 in the 2017 edition has expanded the scope of the Contractor's responsibility for executing outstanding or remedial works under clause 11.2 and a new clause 4.5 introduces a requirement to train the Employer's employees and/or other specified personnel if stated in the Specification.

Although responsible, by clause 4.1(d), for submitting the as‐built documents and operation and maintenance manuals prior to commencement of the tests on completion, the 1999 Red Book Contractor has no training obligation and no specific liability in the terms of clause 11.2(c) of the other two Books. (In the 1999 Yellow and Silver Books clause 11.2(c) requires the Contractor to execute at his own risk and cost any works resulting from improper operation or maintenance attributable to matters for which he is responsible under clauses 5.5–5.7 – that is, training (to the extent specified in the Employer's Requirements), provision of as‐built documents and operation and maintenance manuals – or otherwise.)

These differences have now been removed in the 2017 Red Book. The Red Book Contractor now has an obligation to provide training for the Employer's employees and/or other specified personnel under clause 4.5 if this is stated in the Specification, and has the same responsibility (under clause 11.2(c)) in respect of improper operation or maintenance attributable to any failure to provide such training, operation and maintenance manuals or as‐built records as the Yellow and Silver Book Contractor.11

The 2017 FIDIC Contracts

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