Differing site conditions risks: a FIDIC/engineering and construction contract comparison

Abstract

A new edition of the FIDIC Red Book is under discussion. It is an issue whether this edition should be based on the current edition or there should be a complete break with tradition in favour of a contract based on a new philosophy such as that of the NEC, which is reported to be used in many countries in circumstances in which the Red Book would otherwise have been used. This article compares the two contracts on the way they deal with site conditions issues. The comparison is on equity and clarity in risk allocation, adequacy of contractual procedures for dealing with unforeseeable conditions encountered, effectiveness of contractual machinery for dispute resolution, and compliance with reported new developments in successful contractual practices in underground construction. Studies highlighting the recurring frequency of claims for unforeseen ground conditions suggest a need for such particular attention to this aspect of construction. Although a desire for some equity in risk sharing is discernible in both contracts, there is room for improvement in the clarity of both contracts. Each contract has commendable features which are not present in the other. However, a better approach involves a combination of these features with full compliance of the reported modern developments in successful contracting practices.