FIDIC Comparison - Red Book - Yellow Book - Silver Book - en - Newsletters PDF

It is indicated that one of the areas that participants found difficult in international projects was the use of unfamiliar
contract forms. CNC Vietnam is proud to briefly introduces the comparison between typical rainbow suits (Red Book,
Yellow Book, and Silver Book) which are reputed as the leading contracts in international engineering and construction
projects for both practitioners, (Employers, Contractor), and professional (Lawyers, legal executive, contract executive
etc.) to have a further acknowledgment, and experience.
ISSUE RED BOOK (1999) YELLOW BOOK (1999) SILVER BOOK (1999)
REGULATION AND WORKS Recommended for building Recommended for the Suitable for the provision
and engineering works provision of electrical on a turnkey basis of a
designed by the Employer and/or mechanical plant process or power plant, of
or his representative, the and for the design and a factory or similar facility,
Engineer. execution of building or or of an infrastructure
engineering works. projector other type of
Under the usual
development, where
arrangements for this type Under the usual
of contract, the Contractor arrangements for this type  A higher degree of
constructs the works in of contract, the Contractor certainty of final price and
accordance with a design designs and provides, in time is required, and
provided by the Employer. accordance with the
 The Contractor takes total
However, the works may Employer’s requirements,
responsibility for the
include some elements of plant and/or other works;
design and execution of
Contractor designed civil, which may include any
the project, with little
mechanical, electrical
combination of civil, involvement of the
CNC Vietnam Consultant Co., Ltd
[A] Level 8, Vietnam Business Center Bldg., 57-59 Ho Tung Mau St.,
Dist. 1, Ho Chi Minh, Vietnam
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[W] www.consultantcnc.com | [E] contact@consultantcnc.com
1
and/or construction works. mechanical, electrical Employer.

and/or construction works.
Under the usual
arrangements for turnkey
projects, the Contractor
carries out all the
Engineering, Procurement
and Construction (EPC):
providing a fully equipped
facility, ready for operation
(at the “turn of the key”).
CONTRACT ADMINISTRATION The Contract is The Contract is There is Not Engineer. The
administered by the administered by the Contract is administered
Engineer (appointed by the Engineer (appointed by the directly by the Employer or
Employer) who shall Employer) who shall its representative who
determine any claim for determine any claim for endeavours to reach
extension of time and extension of time and agreement with the
additional payment, certify additional payment, certify Contractor on each claim.
payments and issue taking payments and issue taking The Introductory Note to
over and performance over and performance the Silver Book emphasises
certificates. certificates. that if the Contractor is to

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achieve the certainly of time

and price stipulated, then
the involvement of the
Employer must be limited to
a minimum during
construction.
RISKS ALLOCATION Risks are allocated on a Risks are allocated on a A majority of risks is
fair and equitable basis fair and equitable basis allocated to the
taking account of such taking account of such Contractor under the
matters as insurability, and matters as insurability, and Contract, including any
each party's ability to each party's ability to errors in:
foresee, and mitigate the foresee, and mitigate the
1. Errors in the Setting Out
effect of, the circumstances effect of, the circumstances
data (Sub-Clause 4.7);
relevant to each risk. relevant to each risk.
2. Site data (Sub-Clause
There are a number of There are a number of
4.10);
key risks that the Employer key risks that the Employer
retains, for example: retains, for example: 3. Unforeseeable
difficulties or costs (Sub-
1. Errors in the Setting Out 1. Errors in the Setting Out
Clause 4.12)
data (Sub-Clause 4.7); data (Sub-Clause 4.7);
The Contractor is expected
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2. Site data (Sub-Clause 2. Site data (Sub-Clause to:

4.10); 4.10);
 Price these risks; and/or
3. "Unforeseeable" Site risks 3. "Unforeseeable" Site risks
 Carryout extensive due
(Sub-Clause 4.12) (Sub-Clause 4.12)
diligence to mitigate
As a result, the tender time As a result, the tender time risks.
can be relatively short. can be relatively short.
A longer period for
preparation of a tender is
therefore usually required,
in particular to inspect the
Site and examine data
hydrological and
subsurface data and also
to scrutinise the Employer's
Requirements.
DESIGN The Contractor shall design The Contractor shall carry The Contractor shall be
(to the extent specified in out, and be responsible deemed to have
-
the Contract), execute for, the design of the Works. scrutinised, prior to the Base
ERRORS IN THE EMPLOYER’S and complete the Works in Date, the Employer's
Design shall be prepared
REQUIREMENTS accordance with the Requirements (including
by qualified designers who
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Contract and with the are engineers who comply design criteria and
Engineer’s instructions, and with the criteria (if any) calculations, if any). The
shall remedy any defects in stated in the Employer's Contractor shall be
the Works. Requirements. responsible for the design
of the Works and for the
Except to the extent Unless otherwise stated in
accuracy of such
specified in the Contract, the Contract, the
Employer's Requirements
the Contractor Contractor shall submit to
(including design criteria
the Engineer for consent
 Shall be responsible for and calculations), except
the name and particulars
all Contractor’s as stated below.
of each proposed designer
Documents, Temporary
and design Subcontractor. The Employer shall not be
Works, and such design
responsible for any error,
of each item of Plant The Contractor warrants
inaccuracy or omission of
and Materials as is that he, his designers and
any kind in the Employer's
required for the item to design Subcontractors have
Requirements as originally
be in accordance with the experience and
included in the Contract
the Contract, and capability necessary for
and shall not be deemed
the design.
 Shall not otherwise be to have given any
responsible for the The Contractor undertakes representation of accuracy
design or specification of that the designers shall be or completeness of any
available to attend data or information, except
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the Permanent Works. discussions with the as stated below. Any data
Engineer at all reasonable or information received by
The Contractor shall,
times, until the expiry date the Contractor, from the
whenever required by the
of the relevant Defects Employer or otherwise, shall
Engineer, submit details of
Notification Period. not relieve the Contractor
the arrangements and
from his responsibility for
methods, which the Upon receiving notice
the design and execution of
Contractor proposes to under Sub-Clause8.1
the Works.
adopt for the execution of [Commencement of Works],
the Works. No significant the Contractor shall However, the Employer
alteration to these scrutinise the Employer's shall be responsible for the
arrangements and methods Requirements (including correctness of the following
shall be made without this design criteria and portions of the Employer's
having previously been calculations) and the items Requirements and of the
notified to the Engineer. If of reference mentioned in following data and
the Contract specifies that Sub Clause 4.7 [Setting Out]. information provided by (or
the Contractor shall design on behalf of) the Employer:
Within the period stated in
any part of the Permanent
the Appendix to Tender,  Portions, data and
Works, then unless otherwise
calculated from the information which are
stated in the Particular
Commencement Date, the stated in the Contract
Conditions:
Contractor shall give as being immutable or

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 The Contractor shall notice to the Engineer of the responsibility of the

submit to the Engineer any error, fault or other Employer,
the Contractor’s defect found in the
 Definitions of intended
Documents for this part Employer's Requirements or
purposes of the Works or
in accordance with the these items of reference.
any parts thereof,
procedures specified in
After receiving this notice,
the Contract;  Criteria for the testing
the Engineer shall
and performance of the
 These Contractor’s determine whether Clause
completed Works, and
Documents shall be in 13 [Variations and
accordance with the Adjustments]shall be  Portions, data and
Specification and applied, if so, give notice to information which
Drawings, shall be written the Contractor accordingly. cannot.
in the language for
If and to the extent that
communications defined
(taking account of cost
in 1.4 [Law and
and time) an experienced
Language],and shall
contractor exercising due
include additional
care would have
information required by
discovered the error, fault
the Engineer to add to
or other defect when
the Drawings for co-
examining the Site and the
ordination of each Party’s
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designs. Employer's Requirements

before submitting the
 The Contractor shall be
Tender, the Time for
responsible for this part
Completion shall not be
and it shall, when the
extended and the
Works are completed,
Contract Price shall not be
be fit for such purposes
adjusted.
for which the part is
intended as are specified
in the Contract; and
 Prior to the
commencement of the
Tests on Completion, the
Contractor shall submit
to the Engineer the “as-
built” documents and
operation and
maintenance manuals in
accordance with the
Specification and in
sufficient detail for the

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Employer to operate,
maintain, dismantle,
reassemble, adjust and
repair this part of the
Works. Such part shall
not be considered to
be completed for the
purposes of taking over
under Sub-Clause 10.1
[Taking Over of the
Works and Sections] until
these documents and
manuals have been
submitted to the
Engineer.
CONTRACT PRICE Unless otherwise stated in Unless otherwise stated in Unless otherwise stated in
the Particular Conditions: the Particular Conditions: the Particular Conditions:
 The Contract Price shall  The Contract Price shall  Payment for the Works
be agreed or be the lump sum shall be made on the
determined under Sub- accepted contract basis of the lump sum

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Clause 12.3 and be amount and be subject Contract Price, subject

subject to adjustments in to adjustments in to adjustments in
accordance with the accordance with the accordance with the
Contract. Contract; Contract;
 The Contractor shall pay  The Contractor shall pay  The Contractor shall pay
all taxes, duties and all taxes, duties and all taxes, duties and
fees required to be paid fees required to be fees required to be
by him under the paid by him under the paid by him under the
Contract, and the Contract, and the Contract, and the
Contract Price shall not Contract Price shallot be Contract Price shall not
be adjusted for any of adjusted for any of these be adjusted for any of
these costs except as costs, except as stated in these costs, except as
stated in Sub-Clause 13.7 Sub-Clause 13.7 stated in Sub Clause
[Adjustments for Changes [Adjustments for 13.7.
in Legislation]; Changes in Legislation]
 Any quantities which may  Any quantities which

be set out in the Bill of may be set out in a
Quantities or other Schedule are estimated
Schedule are estimated quantities and are not
quantities and are not to to be taken as the

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be taken as the actual actual and correct

and correct quantities: quantities of the Works
which the Contractor is
1. of the Works which
required to execute;
the Contractor is
required to execute,  Any quantities or price
or data, which may be set
out in a Schedule, shall
2. For the purposes of
be used for the purposes
Clause [Measurement
stated in the Schedule
and Evaluation ];
and may be
 The Contractor shall inapplicable for other
submit to the Engineer, purposes. However, if
within 28 days after the any part of the Works is
Commencement Date, to be paid according to
a proposed breakdown quantity supplied or
of each lump sum price in work done, the
the Schedules. The provisions for
Engineer may take measurement and
account of the evaluation shall be as
breakdown when stated in the Particular
preparing Payment Conditions. The Contract
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Certificates, but shall Price shall be

not be bound by it. determined accordingly,
subject to adjustments
 Notwithstanding the
in accordance with the
provisions of
Contract.
subparagraph (b),
Contractor’s Equipment,
including essential spare
parts therefore, imported
by the Contractor for
the sole purpose of
executing the Contract
shall be exempt from the
payment of import
duties and taxes upon
importation.
PAYMENT The Employer shall make an The Employer shall make an The Employer shall make an
advance payment, as an advance payment, as an advance payment, as an
interest-free loan for interest-free loan for interest-free loan for
mobilisation, when the mobilisation, when the mobilization and design,
Contractor submits a Contractor submits a when the Contractor

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guarantee. Unless and until guarantee. Unless and until submits a guarantee.
the Employer receives this the Employer receives this
Employer shall pay the first
guarantee, or if the total guarantee, or if the total
instalment after receiving
advance payment is not advance payment is not
stated in the Contract stated in the Contract 1. A Statement;
Data (or Appendix to Data (or Appendix to
Tender), this Sub Clause shall Tender), this Sub Clause shall 2. The Performance
not apply. not apply. Security
The Engineer shall issue an The Engineer shall issue an The Contractor shall submit
Interim Payment Certificate Interim Payment Certificate a Statement in six copies
for the first instalment after: for the first instalment after: to the Employer after the
end of the period of
 Receiving a Statement  Receiving a Statement payment stated in the
and and Contract (if not stated,
after the end of each
 after the Employer  after the Employer
month), in a form
Receives: Receives:
approved by the Employer,
1. The Performance 1. The Performance showing in detail the
Security Security amounts to which the
Contractor considers
2. a guarantee in 2. a guarantee in
himself to be entitled,
amounts and amounts and
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currencies equal to currencies equal to together with supporting

the advance the advance documents.
payment payment
If the Contract includes a
The Contractor shall submit The Contractor shall submit Schedule of Payments
a Statement in six copies to a Statement in six copies to specifying the instalments
the Engineer after the end the Engineer after the end in which the Contract
of each month, in a form of each month, in a form Price will be paid, then
approved by the Engineer, approved by the Engineer, unless otherwise stated in
showing in detail the showing in detail the this Schedule.
amounts to which the amounts to which the
Contractor considers Contractor considers
Schedule of Payments
himself to be entitled,
himself to be entitled, specifying the instalments in
together with supporting
together with supporting which the Contract Price
documents which shall
documents which shall will be paid, then unless
include the report on the
include the report on the otherwise stated in this
progress during this month.
progress during this month. Schedule:
If the Contract includes a  The instalments quoted
schedule of payments
schedule of payments in the Schedule of
specifying the instalments in
specifying the instalments in Payments shall be the
which the Contract Price
which the Contract Price
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will be paid, then unless will be paid, then unless estimated contract
otherwise stated in this otherwise stated in this
 If these instalments are not
schedule: schedule:
defined by reference to
 The instalments quoted in  The instalments quoted in the actual progress
this schedule of this schedule of achieved in executing the
payments shall be the payments shall be the Works, and if actual
estimated contract estimated contract progress is found to be
values. values. less than that on which
the Schedule of Payments
 If these instalments are  If these instalments are
was based, then the
not defined by not defined by
Employer may proceed to
reference to the actual reference to the actual
agree or determine revised
progress achieved in progress achieved in
instalments, which shall take
executing the Works, executing the Works,
account of the extent to
and if actual progress is and if actual progress is
which progress is less than
found to be less than found to be less than
that on which the
that on which the that on which the
instalments were previously
Schedule of Payments Schedule of Payments
based.
was based, then the was based, then the
Engineer may proceed Engineer may proceed If the Contract does not
to agree or determine toagree or determine include a Schedule of

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revised instalments, revised instalments, Payments, the Contractor

which shall take account which shall take account shall submit non-binding
of the extent to which of the extent to which estimates of the payments,
progress is less than that progress is less than that which he expects to
on which the on which the become due during each
instalments were instalments were quarterly period.
previously based. previously based.
The first estimate shall be
If the Contract does not If the Contract does not submitted within 42 days
include a schedule of include a schedule of after the Commencement
payments, the Contractor payments, the Contractor Date.
shall submit non-binding shall submit non-binding
Revised estimates shall be
estimates of the payments, estimates of the payments,
submitted at quarterly
which he expects to which he expects to
intervals, until the Taking
become due during each become due during each
Over Certificate has been
quarterly period. quarterly period.
issued for the Works.
The first estimate shall be The first estimate shall be
submitted within 42 days submitted within 42 days
after the Commencement after the Commencement
Date. Date.
Revised estimates shall be Revised estimates shall be

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submitted at quarterly submitted at quarterly

intervals, until the Taking intervals, until the Taking
Over Certificate has been Over Certificate has been
issued for the Works. issued for the Works.
EXTENSION OF TIME Various rights for the Various rights for the The Contractor shall be
Contractor to claim Contractor to claim entitled to an EOT if (and to
ASSOCIATED COSTS
Extension of Time OR Extension of Time OR the extent that)completion
Associated Cost under the Associated Cost under the for the purposes of Taking
Contract for errors: Contract for errors: Over of the Works and
Sections is or will be delayed
 In the Setting Out data  In the Setting Out data
by any of the following
(Sub-Clause 4.7) (Sub-Clause 4.7)
causes:
 In the Site data (Sub-  In the Site data (Sub-
 A Variation (unless an
Clause 4.10) Clause 4.10)
adjustment to the Time
 Unforeseen Site risks (Sub-  Unforeseen Site risks (Sub- for Completion has
Clause 4.12) Clause 4.12) been agreed under
Variation Procedure;
 Others.  Others.
 A cause of delay giving
an entitlement to
extension of time under
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a Sub-Clause of these
Conditions;
 Any delay, impediment

or prevention caused
by (or attributable
to)the Employer, the
Employer’s Personnel, or
the Employer’s other
contractors on the Site.
TESTS ON COMPLETION The Contractor shall carry The Contractor shall carry The Contractor shall carry
out the Tests on out the Tests on out the Tests on
Completion. Completion. Completion.
The Contractor shall give The Contractor shall give The Contractor shall give
to the Engineer not less than to the Engineer not less than to the Engineer not less than
21 days’ notice of the date 21 days’ notice of the date 21 days’ notice of the date
after which the Contractor after which the Contractor after which the Contractor
will be ready to carry out will be ready to carry out will be ready to carry out
each of the Tests on each of the Tests on each of the Tests on
Completion. Completion. Completion.

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Unless otherwise agreed, Unless otherwise agreed, Unless otherwise agreed,

Tests on Completion shall Tests on Completion shall Tests on Completion shall
be carried out within 14 days be carried out within 14 days be carried out within 14 days
after this date, on such after this date, on such after this date, on such
day or days as the day or days as the day or days as the
Engineer shall instruct. Engineer shall instruct. Engineer shall instruct.
In considering the results Unless otherwise stated in Unless otherwise stated in

of the Tests on Completion, the Particular Conditions, the Particular Conditions,
the Engineer shall make the Tests on Completion the Tests on Completion
allowances for the effect shall be carried out in the shall be carried out in the
of any use of the Works following sequence: following sequence:
by the Employer on the
a. PRE-COMMISSIONING a. PRE-COMMISSIONING
performance or other
TESTS TESTS
characteristics of the
Works. As soon as the Works, which shall include the which shall include the
or a Section, have passed appropriate inspections appropriate inspections
any Tests on Completion, and ("dry" or "cold") and ("dry" or "cold")
the Contractor shall submit functional tests to functional tests to
a certified report of the demonstrate that each demonstrate that each
results of these Tests to the item of Plant can safely item of Plant can safely

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Engineer. undertake the next stage, undertake the next stage,
If the Tests on Completion b. COMMISSIONING TESTS b. COMMISSIONING TESTS

are being unduly delayed
which shall include the which shall include the
by the Contractor, the
specified operational tests specified operational tests
Engineer may by notice
to demonstrate that the to demonstrate that the
require the Contractor to
Works or Section can be Works or Section can be
carry out the Tests within 21
operated safely and as operated safely and as
days after receiving the
specified, under all available specified, under all available
notice. The Contractor
operating conditions; and operating conditions; and
shall carry out the Tests on
such day or days within c. TRIAL OPERATION c. TRIAL OPERATION
that period as the
Contractor may fix and of which shall demonstrate which shall demonstrate
which he shall give notice that the Works or Section that the Works or Section
to the Engineer. perform reliably and in perform reliably and in
accordance with the accordance with the
If the Contractor fails to Contract. Contract.
carry out the Tests on
Completion within the During trial operation, During trial operation,
period of 21 days, the when the Works are when the Works are
Employer’s Personnel may operating under stable operating under stable
conditions, the Contractor conditions, the Contractor
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proceed with the Tests at shall give notice to the shall give notice to the
the risk and cost of the Engineer that the Works Engineer that the Works
Contractor. The Tests on are ready for any other are ready for any other
Completion shall then be Tests on Completion, Tests on Completion,
deemed to have been including performance tests including performance tests
carried out in the presence to demonstrate whether the to demonstrate whether the
of the Contractor and the Works conform with criteria Works conform with criteria
results of the Tests shall be specified in the Employer's specified in the Employer's
accepted as accurate. Requirements and with the Requirements and with the
Schedule of Guarantees. Schedule of Guarantees.
Failure to pass tests
Trial operation shall not Trial operation shall not
If the Works, or a Section, fail
constitute a taking-over constitute a taking-over
to pass the Test son
under Clause 10 [Employer’s under Clause 10 [Employer’s
Completion repeated
Taking Over]. Taking Over].
under Sub- Clause 9.3
[Retesting], the Engineer Unless otherwise stated in Unless otherwise stated in
shall be entitled to: the Particular Conditions, the Particular Conditions,
any product produced by any product produced by
 Order further repetition of
the Works during trial the Works during trial
Tests on Completion
operation shall be the operation shall be the
under Sub-Clause 9.3;
property of the Employer. property of the Employer.

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 If the failure deprives the In considering the results In considering the results
Employer of substantially of the Tests on Completion, of the Tests on Completion,
the whole benefit of the the Engineer shall make the Engineer shall make
Works or Section, reject allowances for the effect allowances for the effect
the Works or Section(as of any use of the Works of any use of the Works
the case may be), in by the Employer on the by the Employer on the
which event the performance or other performance or other
Employer shall have the characteristics of the Works. characteristics of the Works.
same remedies as are As soon as the Works, or a As soon as the Works, or a
provided in Section, have passed each Section, have passed each
subparagraph (c) of of the Tests on Completion of the Tests on Completion
Sub Clause 11.4 [Failure described in sub-paragraph described in sub-paragraph
to Remedy Defects]; or (a), (b) or (c), the (a), (b) or (c), the
Contractor shall submit a Contractor shall submit a
 Issue a Taking-Over
certified report of the results certified report of the results
Certificate, if the
of these Tests to the of these Tests to the
Employer so requests.
Engineer. Engineer.
But in this case, the
If the Tests on Completion If the Tests on Completion
Contractor shall proceed in
are being unduly delayed are being unduly delayed
accordance with all other
by the Contractor, the by the Contractor, the
obligations under the
Engineer may by notice Engineer may by notice
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Contract, and the Contract require the Contractor to require the Contractor to
Price shall be reduced by carry out the Tests within 21 carry out the Tests within 21
such amount as shall be days after receiving the days after receiving the
appropriate to cover the notice. notice.
reduced value to the
The Contractor shall carry The Contractor shall carry
Employer as a result of this
out the Tests on such day or out the Tests on such day or
failure. Unless the relevant
days within that period as days within that period as
reduction for this failure is
the Contractor may fix the Contractor may fix
stated (or its method of
and of which he shall give and of which he shall give
calculation is defined) in
notice to the Engineer. notice to the Engineer.
the Contract, the Employer
may require the reduction to If the Contractor fails to If the Contractor fails to
be carry out the Tests on carry out the Tests on
Completion within the Completion within the
 Agreed by both Parties
period of 21 days, the period of 21 days, the
(in full satisfaction of this
Employer's Personnel may Employer's Personnel may
failure only) and paid
proceed with the Tests at proceed with the Tests at
before this Taking-Over
the risk and cost of the the risk and cost of the
Certificate is issued;
Contractor. The Tests on Contractor. The Tests on
 Determined and paid Completion shall then be Completion shall then be
under Sub-Clause 2.5 deemed to have been deemed to have been

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[Employer’s Claims] and carried out in the carried out in the

Sub Clause 3.5 presence of the Contractor presence of the Contractor
[Determinations] and the results of the Tests and the results of the Tests
shall be accepted as shall be accepted as
accurate. accurate.
Failure to pass tests Failure to pass tests
If the Works, or a Section, fail If the Works, or a Section, fail

to pass the Tests on to pass the Tests on
Completion repeated under Completion repeated under
Sub-Clause 9.3 [Retesting], Sub-Clause 9.3 [Retesting],
the Engineer shall be the Engineer shall be
entitled to: entitled to:
 Order further repetition of  Order further repetition of

Tests on Completion Tests on Completion
under Sub-Clause 9.3; under Sub-Clause 9.3;
 If the failure deprives the  If the failure deprives the

Employer of substantially Employer of substantially
the whole benefit of the the whole benefit of the
Works or Section, reject Works or Section, reject

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the Works or Section(as the Works or Section(as

the case may be), in the case may be), in
which event the which event the
Employer shall have the Employer shall have the
same remedies as are same remedies as are
provided in provided in
subparagraph (c) of subparagraph (c) of
Sub-Clause 11.4[Failure to Sub-Clause 11.4[Failure to
Remedy Defects]; Remedy Defects];
 Issue a Taking-Over  Issue a Taking-Over

Certificate. Certificate.
But in this case, the But in this case, the

Contractor shall then Contractor shall then
proceed in accordance proceed in accordance
with all other obligations with all other obligations
under the Contract, and the under the Contract, and the
Contract Price shall be Contract Price shall be
reduced by such amount reduced by such amount
as shall be appropriate to as shall be appropriate to
cover the reduced value cover the reduced value

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to the Employer as a result to the Employer as a result

of this failure. Unless the of this failure. Unless the
relevant reduction for this relevant reduction for this
failure is stated (or its failure is stated (or its
method of calculation is method of calculation is
defined) in the Contract: defined) in the Contract:
the Employer may require the Employer may require
the reduction to be the reduction to be
 Agreed by both Parties  Agreed by both Parties

(in full satisfaction of this (in full satisfaction of this
failure only) and paid failure only) and paid
before this Taking-Over before this Taking-Over
Certificate is issued; Certificate is issued;
 Determined and paid  Determined and paid

under Sub-Clause 2.5 under Sub-Clause 2.5
[Employer’s Claims] and [Employer’s Claims] and
Sub Clause 3.5 Sub Clause 3.5
[Determinations]. [Determinations].
TAKING-OVER Except as stated in Sub- Except as stated in Sub- Except as stated in Sub-
Clause 9.4 [Failure to Pass Clause 9.4 [Failure to Pass Clause 9.4 [Failure to Pass
[T] 08 6288 5128 | [F] 08 6288 5138
26
Tests on Completion],the Tests on Completion],the Tests on Completion],the

Works shall be taken over Works shall be taken over Works shall be taken over
by the Employer when by the Employer when by the Employer when
 The Works have been  The Works have been  The Works have been
completed in completed in completed in
Contract, including the Contract, including the Contract, including the
matters described in matters described in matters described in
Sub Clause 8.2 [Time for Sub Clause 8.2 [Time for Sub Clause 8.2 [Time for
Completion] and except Completion] and except Completion] and except
as allowed in as allowed in as allowed in
subparagraph (a) below, subparagraph (a) below, subparagraph (a) below,
and and and
 A Taking-Over Certificate  A Taking-Over Certificate  A Taking-Over Certificate

for the Works has been for the Works has been for the Works has been
issued, or is deemed to issued, or is deemed to issued, or is deemed to
have been issued in have been issued in have been issued in
accordance with this accordance with this accordance with this
Sub-Clause. Sub-Clause. Sub-Clause.
The Contractor may apply The Contractor may apply The Contractor may apply
[T] 08 6288 5128 | [F] 08 6288 5138
27
by notice to the Engineer by notice to the Engineer by notice to the Engineer

for a Taking-Over for a Taking-Over for a Taking-Over
Certificate not earlier than Certificate not earlier than Certificate not earlier than
14 days before the Works will, 14 days before the Works will, 14 days before the Works will,
in the Contractor’s opinion, in the Contractor’s opinion, in the Contractor’s opinion,
be complete and ready for be complete and ready for be complete and ready for
taking over. If the Works taking over. If the Works taking over. If the Works
are divided into Sections, are divided into Sections, are divided into Sections,
the Contractor may similarly the Contractor may similarly the Contractor may similarly
apply for a Taking Over apply for a Taking Over apply for a Taking Over
Certificate for each Certificate for each Certificate for each
Section. Section. Section.
The Engineer shall, within The Engineer shall, within The Engineer shall, within
28 days after receiving the 28 days after receiving the 28 days after receiving the
Contractor’s application: Contractor’s application: Contractor’s application:
 Issue the Taking-Over  Issue the Taking-Over  Issue the Taking-Over

Certificate to the Certificate to the Certificate to the
Contractor, stating the Contractor, stating the Contractor, stating the
date on which the date on which the date on which the
Works or Section were Works or Section were Works or Section were

[T] 08 6288 5128 | [F] 08 6288 5138
28
completed in completed in completed in

Contract, except for any Contract, except for any Contract, except for any
minor outstanding work minor outstanding work minor outstanding work
and defects which will and defects which will and defects which will
not substantially affect not substantially affect not substantially affect
the use of the Works or the use of the Works or the use of the Works or
Section for their intended Section for their intended Section for their intended
purpose (either until or purpose (either until or purpose (either until or
whilst this work is whilst this work is whilst this work is
completed and these completed and these completed and these
defects are remedied) defects are remedied) defects are remedied)
 Reject the application,  Reject the application,  Reject the application,

giving reasons and giving reasons and giving reasons and
specifying the work specifying the work specifying the work
required to be done by required to be done by required to be done by
the Contractor to enable the Contractor to enable the Contractor to enable
the Taking-Over the Taking-Over the Taking-Over
Certificate to be issued. Certificate to be issued. Certificate to be issued.
The Contractor shall then The Contractor shall then The Contractor shall then
complete this work complete this work complete this work
[T] 08 6288 5128 | [F] 08 6288 5138
29
before issuing a further before issuing a further before issuing a further

notice under this Sub notice under this Sub notice under this Sub
Clause. Clause. Clause.
If the Engineer fails either If the Engineer fails either If the Engineer fails either
to issue the Taking-Over to issue the Taking-Over to issue the Taking-Over
Certificate or to reject the Certificate or to reject the Certificate or to reject the
Contractor’s application Contractor’s application Contractor’s application
within the period of 28 within the period of 28 within the period of 28
days, and if the Works or days, and if the Works or days, and if the Works or
Section(as the case may Section(as the case may Section(as the case may
be) are substantially in be) are substantially in be) are substantially in
Contract, the Taking-Over Contract, the Taking-Over Contract, the Taking-Over
Certificate shall be Certificate shall be Certificate shall be
deemed to have been deemed to have been deemed to have been
issued on the last day of issued on the last day of issued on the last day of
that period. that period. that period.
The Engineer may, at the The Engineer may, at the Parts of the Works (other
sole discretion of the sole discretion of the than Sections) shall not be
Employer, issue a Taking- Employer, issue a Taking- taken over or used by the

[T] 08 6288 5128 | [F] 08 6288 5138
30
Over Certificate for any Over Certificate for any Employer, except as may
part of the Permanent part of the Permanent be stated in the Contract
Works. Works. or as may be agreed by
both Parties.
The Employer shall not use The Employer shall not use
any part of the Works(other any part of the Works(other
than as a temporary than as a temporary
measure which is either measure which is either
specified in the Contract or specified in the Contract or
agreed by both Parties) agreed by both Parties)
unless and until the unless and until the
Engineer has issued a Engineer has issued a

Taking-Over Certificate for Taking-Over Certificate for
this part. However, if the this part. However, if the
Employer does use any part Employer does use any part
of the Works before the of the Works before the
Taking Over Certificate is Taking Over Certificate is
issued: issued:
 The part which is used  The part which is used

shall be deemed to shall be deemed to
have been taken over as have been taken over as
[T] 08 6288 5128 | [F] 08 6288 5138
31
from the date on which it from the date on which it

is used, is used,
 The Contractor shall  The Contractor shall

cease to be liable for cease to be liable for
the care of such part the care of such part
as from this date, when as from this date, when
responsibility shall pass responsibility shall pass
to the Employer, and to the Employer, and
 If requested by the  If requested by the

Contractor, the Engineer Contractor, the Engineer
shall issue a Taking-Over shall issue a Taking-Over
Certificate for this part. Certificate for this part.
After the Engineer has issued After the Engineer has issued
a Taking-Over Certificate a Taking-Over Certificate
for a part of the Works, for a part of the Works,
the Contractor shall be the Contractor shall be
given the earliest given the earliest
opportunity to take such opportunity to take such
steps as may be necessary steps as may be necessary
to carry out any to carry out any
[T] 08 6288 5128 | [F] 08 6288 5138
32
outstanding Tests on outstanding Tests on

Completion. Completion.
The Contractor shall carry The Contractor shall carry

out these Tests on out these Tests on
Completion as soon as Completion as soon as
practicable before the practicable before the
expiry date of the relevant expiry date of the relevant
Defects Notification Period. Defects Notification Period.
If the Contractor incurs Cost If the Contractor incurs Cost

as a result of the Employer as a result of the Employer
taking over and/or using a taking over and/or using a
part of the Works, other than part of the Works, other than
such use as is specified in such use as is specified in
the Contract or agreed by the Contract or agreed by
the Contractor, the the Contractor, the
Contractor shall Contractor shall
 Give notice to the  Give notice to the

Engineer; Engineer;
 Be entitled to 20.1  Be entitled to 20.1

[T] 08 6288 5128 | [F] 08 6288 5138
33
[Contractor’s Claims] to [Contractor’s Claims] to

payment of any such payment of any such
Cost plus profit, which Cost plus profit, which
shall be included in the shall be included in the
Contract Price. After this Contract Price. After this
notice, the Engineer notice, the Engineer
(3.5) to agree or (3.5) to agree or
determine this Cost and determine this Cost and
profit. profit.
Important Notes:
1) This information has been prepared by CNC as a general guide only and does not constitute advice on any
specific matter. We recommend that you seek professional advice before taking action. No liability can be
accepted by us for any action taken or not taken as a result of this information.
2) The materials on this Web site may not reflect the most current legal developments, verdicts or settlements and
should not be considered an indication of future results.

[T] 08 6288 5128 | [F] 08 6288 5138
34

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It is indicated that one of the areas that participants found difficult in international projects was the use of unfamiliar

and/or construction works. mechanical, electrical Employer.

CNC Vietnam Consultant Co., Ltd

achieve the certainly of time

2. Site data (Sub-Clause 2. Site data (Sub-Clause to:

CNC Vietnam Consultant Co., Ltd

 The Contractor shall notice to the Engineer of the responsibility of the

designs. Employer's Requirements

CNC Vietnam Consultant Co., Ltd

CNC Vietnam Consultant Co., Ltd

Clause 12.3 and be amount and be subject Contract Price, subject

 Any quantities which may  Any quantities which

CNC Vietnam Consultant Co., Ltd

be taken as the actual actual and correct

Certificates, but shall Price shall be

CNC Vietnam Consultant Co., Ltd

currencies equal to currencies equal to together with supporting

CNC Vietnam Consultant Co., Ltd

revised instalments, revised instalments, Payments, the Contractor

Revised estimates shall be Revised estimates shall be

submitted at quarterly submitted at quarterly

 Any delay, impediment

CNC Vietnam Consultant Co., Ltd

Unless otherwise agreed, Unless otherwise agreed, Unless otherwise agreed,

In considering the results Unless otherwise stated in Unless otherwise stated in

CNC Vietnam Consultant Co., Ltd

Engineer. undertake the next stage, undertake the next stage,

If the Tests on Completion b. COMMISSIONING TESTS b. COMMISSIONING TESTS

CNC Vietnam Consultant Co., Ltd

CNC Vietnam Consultant Co., Ltd

[Employer’s Claims] and carried out in the carried out in the

Failure to pass tests Failure to pass tests

If the Works, or a Section, fail If the Works, or a Section, fail

 Order further repetition of  Order further repetition of

 If the failure deprives the  If the failure deprives the

CNC Vietnam Consultant Co., Ltd

the Works or Section(as the Works or Section(as

 Issue a Taking-Over  Issue a Taking-Over

But in this case, the But in this case, the

CNC Vietnam Consultant Co., Ltd

to the Employer as a result to the Employer as a result

 Agreed by both Parties  Agreed by both Parties

 Determined and paid  Determined and paid

Tests on Completion],the Tests on Completion],the Tests on Completion],the

 A Taking-Over Certificate  A Taking-Over Certificate  A Taking-Over Certificate

by notice to the Engineer by notice to the Engineer by notice to the Engineer

 Issue the Taking-Over  Issue the Taking-Over  Issue the Taking-Over

CNC Vietnam Consultant Co., Ltd

completed in completed in completed in

 Reject the application,  Reject the application,  Reject the application,

before issuing a further before issuing a further before issuing a further

CNC Vietnam Consultant Co., Ltd

Engineer has issued a Engineer has issued a

 The part which is used  The part which is used

from the date on which it from the date on which it

 The Contractor shall  The Contractor shall

 If requested by the  If requested by the

outstanding Tests on outstanding Tests on

The Contractor shall carry The Contractor shall carry

If the Contractor incurs Cost If the Contractor incurs Cost

 Give notice to the  Give notice to the

 Be entitled to 20.1  Be entitled to 20.1

CNC Vietnam Consultant Co., Ltd