FIDIC
MCQ in AFA 2025 70% Exam
What is an integral part of FIDIC conditions ?
A. Risk Allocation
B. Dispute Resolution
C. Rights and obligations of parties
D. all of these
The correct answer is: D. all of these*
Explanation:
Each of the listed elements is an integral part of FIDIC Conditions of Contract:
* Risk Allocation – FIDIC contracts are known for their clear and balanced allocation of risks between the Employer and the Contractor, tailored according to the contract type (Red Book, Yellow Book, etc.).
* Dispute Resolution – A structured mechanism for resolving disputes (including Dispute Adjudication Boards and arbitration) is embedded in all FIDIC contracts to maintain project continuity.
* Rights and Obligations of Parties – FIDIC clearly defines the roles, responsibilities, rights, and duties of the Employer, Contractor, and Engineer (if applicable) to avoid ambiguities.
Hence, *all of these elements* form the foundation of FIDIC Conditions.
FIDIC Conditions of Contract
What is FIDIC?
FIDIC stands for the Fédération Internationale Des Ingénieurs-Conseils (International Federation of Consulting Engineers). It is a globally recognized organization known for publishing standard forms of contract widely used in the construction and engineering industry, especially in international projects.
Purpose of FIDIC Contracts:
FIDIC Conditions of Contract are designed to provide a balanced and fair framework for contract administration and dispute resolution. They define the roles, responsibilities, and liabilities of parties involved in construction and engineering projects.
Popular FIDIC Books: FIDIC contracts are color-coded for different types of projects:
Red Book – For Building and Engineering Works (Employer-Design)
Yellow Book – For Plant and Design-Build (Contractor-Design)
Silver Book – For EPC/Turnkey Projects
Green Book – For Short Form Contracts
Gold Book – For Design-Build-Operate projects
Key Parties in FIDIC Contracts: Typically, FIDIC contracts involve three main parties:
The Employer (client/owner)
The Contractor (executing the work)
The Engineer (acts as the contract supervisor on behalf of the employer)
Role of the Engineer:
Under the Red and Yellow Books, the Engineer plays a central role in overseeing the project, certifying payments, resolving claims, and ensuring compliance with contract terms. However, in the Silver Book, the Engineer’s role is significantly reduced or eliminated.
Risk Allocation:
FIDIC contracts are structured to fairly distribute risks between the Employer and the Contractor, depending on the type of contract used. For example, the Red Book places design risk on the Employer, whereas the Yellow and Silver Books shift this risk to the Contractor.
Payment Terms:
FIDIC contracts include detailed provisions regarding interim payments, advance payments, final payments, and the procedure for payment certification by the Engineer or Employer’s Representative.
Time for Completion & Extensions:
These contracts define a specific time for project completion, including provisions for Extensions of Time (EOT) if delays occur due to reasons not attributable to the Contractor (e.g., force majeure, late instructions by the Employer, etc.).
Claims and Dispute Resolution:
FIDIC contracts lay out a formal procedure for submitting claims and resolving disputes. This includes the use of a Dispute Adjudication/Avoidance Board (DAB/DAB), followed by arbitration under international rules if necessary.
Variations and Changes:
The contracts allow for changes in the work (variations), which may affect time and cost. The Engineer or Employer has the authority to initiate variations and adjust the contract price accordingly.
Governing Law and Language:
FIDIC contracts allow for the selection of governing law and official contract language to ensure enforceability in different jurisdictions.
Suitability for International Projects:
Due to their neutrality, adaptability, and clarity, FIDIC contracts are often the preferred choice for international projects funded by multilateral banks such as the World Bank, ADB, and others.
Recent Updates:
FIDIC released a new edition in 2017 for the Red, Yellow, and Silver Books, aiming to improve clarity, dispute avoidance, and contract management practices.
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