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Overview and Short Comparison between FIDICs Red Book & New Red Book

November 2010

This presentation will cover :

I- History and development

II- Main differences

History and development

History and development


The Red book was designed for construction contracts in which the contractor built to the employers design and supervised by an engineer.

History and development The Fourth Edition was published in September 1987

History and development

In November 1996, FIDIC published a document entitled Supplement to Fourth Edition 1987- Conditions of Contract for Works of Civil Engineering ConstructionReprinted 1992 with Further Amendments. It is intended to provide the user with alternative arrangements in three controversial areas of the Red Book, thus giving him a choice in the method to be used for: settlement of disputes; payment; and preventing delay in certification for the purpose of payments.

History and development


FIDIC established a task force to update the red (and the yellow book) in the light of developments in the international construction industry.
The key considerations included: The role of the Engineer and, in particular, the requirement to act impartially in the circumstances of being employed and paid by the Employer; The desirability for standardization within the FIDIC forms; The simplification of the FIDIC forms in light of the fact that the FIDIC conditions were issued in English but in very many instances were being utilized by those whose language background was other than in English; and That the new books would be suitable for use in both common law and civil law jurisdictions.

This led to the publication in 1999 of the New Red Book.


The title of the new 1999 First Edition construction book is Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer.

History and development


Most recently in 2005, the Red Book (MDB edition) was published (also known as the pink book).
This edition simplifies the use of the FIDI contract For the Multilateral Development Banks.

The following MDBs have all participated in the preparation of the Red Book:
African development bank Asian development Bank Black Sea Trade and Development Bank Caribbean Development Bank European Bank for Reconstruction and Development Inter-American Development Bank International Bank for Reconstruction and Development Islamic Bank for development Bank Nordic Development Bank.

Main differences

An overall review of the New Red book indicated that the contractual impartiality of the Engineer has been diminished compared to the position in the Red Book.

For a more detailed analysis, the tables below highlight the main differences between the Red Book and the New Red Book.

Main differences

1) Relationship between the Employer and the Engineer

Red Book
2.1(a) The Engineer shall carry out the duties specified in the Contract () 3.1-

New Red Book (1999)


()Whenever carrying out duties or exercising authority, specified in or implied by the Contract, the Engineer shall be deemed to act for the Employer ()

=> The New Red Book introduces an express statement regarding the relationship between the Employer and the Engineer

Main differences 2) Engineer


a- Definition
Red Book
1.1 (a) (iv) 1.1.2.4

New Red Book (1999)

Engineer means the person appointed by the Engineer means the person appointed by Employer to act as Engineer for the purposes the Employer to act as the Engineer for the of the Contract and named as such in Part II of purposes of the Contact and named Appendix these Conditions to Tender, or other person appointed from time to time by the Employer and notified to the Contractor under Sub-Clause 3.4 [Replacement of the or => The definition in the New Book is larger and includes Engineer]other person

appointed from time to time by the Employer and notified to the Contractor

Main differences 2) Engineer


b-Duties
Red Book New Red Book (1999)

Clause 2.1

Clause 3.1

=> There are no significant differences between the two books. However the New Red Book has a more elaborated text in relation to the duties of the Engineer.

Main differences 2) Engineer


c- His representative
Red Book
1.1 (a) (v) Engineers Representative means a person appointed from time to time by the Engineer under Sub-Clause 2.2 2.2 The Engineers Representative shall be appointed by and be responsible to the Engineer and shall carry out such duties and exercise such authority as may be delegated to him by the Engineer under Sub-Clause 2.3. NA

New Red Book (1999)

There is no equivalent in the New Red Book.

Main differences 2) Engineer


d- Delegation

Red Book

New Red Book (1999)

Clause 2.3

Clause 3.2

=> In the New Red Book, unless agreed by both parties, the Engineer shall not delegate the authority to determine matters in accordance with SubClause 3.5 (Determinations). Any approval, consent, instruction, notices in accordance with the delegation, shall have the same effect as though it had been an act of the Engineer.

Main differences 2) Engineer


e- Appointment of assistance
Red Book
2.4 The Engineer or the Engineers Representative may appoint any number of persons to assist the Engineers Representative in the carrying out of his duties under Sub-Clause 2.2. He shall notify to the Contractor the names, duties and scope of authority of such persons. Such assistants shall have no authority to issue any instructions to the Contractor save in so far as such instructions may be necessary to enable them to carry out their duties and to secure their acceptance of materials, Plant or workmanship as being in accordance with the Contract, and any instructions given by any of them for those purposes shallThe termto have been given has aEngineers => be deemed assistants by the different Representative.

New Red Book (1999)

NA

meaning in the New Red Book. It

relates to where the Engineer delegates authority.

Main differences 2) Engineer


f- Extension of time
Red Book
44.1 In the event of: (a) the amount or nature of extra or additional work, (b) any cause of delay referred to in these Conditions, (c) exceptionally adverse climatic conditions, or (e) other special circumstances which may occur, other than through a default of or breach of contract by the Contractor or for which he is responsible, being such as for Completion of the Works, or any Section or part thereof, the Engineer shall, after due consultation with the Employer and the Contractor, determine the amount of such extension and shall notify the Contractor accordingly, 8.4 (e) The Contractor shall be entitled subject to Clause 20.1 [Contractors Claims] to an extension of the Time for Completion if and to the extent that completion for the purposes of Sub-Clause 10.1 [taking over of the Works clauses: () (e)Any delay, impediment or prevention caused by or attributable to the employer, the Employers Personnel, or

New Red Book (1999)

(d) any delay, impediment or prevention by the Employer, and Sections] is or will be delayed by any of the following

fairly to entitle the Contractor to an extension of the Time the Employers other contractors on the Site (.)

=> a copy to the Employer. personnel (as referred to in the New Red Book means with The Employer the Engineer and the assistants so, the New Red Book entitles the Contractor to claim for an extension of time for any delay or prevention by the Engineer or his assistants.

Main differences 2) Engineer


g- Suspension of time
Red Book
16.1 If the Engineers fails to certify in accordance with Sub-Clause 14.6 [Issue of Interim Payment Certificates] or the Employer fails to comply with Sub-Clause 2.4 [Employers NA Financial Arrangements] or Sub-Clause 14.7 [Payment], the Contractor may, after giving not less than 21 days notice to the Employer, suspend work (for reduce the rate of work) unless and until the Contractor has received the Payment Certificate, reasonable evidence or payment, as the case may be and as described in in notice () => There were no equivalent right of suspension the the Red Book.

New Red Book (1999)

Main differences 2) Engineer


h- Replacement
Red Book
3.4 If the Employer intends to replace the Engineer, the Employer shall, not less than 42 days before the intended date of replacement, give notice to the Contractor NA of the name, address and relevant experience of the intended replacement Engineer. The Employer shall not replace the Engineer with a person against whom the Contractor raises reasonable objection

New Red Book (1999)

=> There were no equivalent mechanism in the Red Book.


supporting particulars

by notice to the Employer, with

Main differences
a- Obligations
Red Book
Clause 8.1 the Works and remedy any defects and he shall provide all superintendence, labour, all other things.

3) Contractor
New Red Book (1999)
Clause 4.1 complete the Works and shall remedy any defects in the Works. The Contractor shall provide the Plant and and all Contractors Personnel.

The Contractor shall execute and complete The Contractor shall design, execute and

materials, Plant, Contactors Equipment and Contractors Document specified in the Contract The Contractor shall give prompt notice to The Contractor shall be responsible for the the Engineer of any error, omission, fault or adequacy, stability and safety of all Site other defect in the design of or Specificationoperations and of all methods of construction. for their Works.
The Contractor shall, whenever required by the Engineers submit details of the arrangements and methods which the Contractor proposes to adopt for the execution of the Works. The Contractor shall also submit to the Engineer

=>The New Red Book has a more elaborated text Documents. the the Contractors concerning Obligations of the Contractor.

Main differences 3) Contractor


b- Termination
Red Book
16.2 The Contractor shall be entitled to terminate the Contract if () NA (b)The Engineer fails, within 56 days after receiving a Statement and supporting documents, to issue the relevant Payment Certificate (.)

New Red Book (1999)

=> In the Red Book, the Contractor has no equivalent right of termination.

Main differences 3) Contractor c- Default by Contractor


Red Book
63.1 (text too long)
(the Employer can only terminate, in certain circumstances, where the Engineer has certified that, in his opinion, the Contractor has failed to do something)

New Red Book (1999)

NA

=>In the New Red book and for the advantage of the Contractor this provision is deleted.

This presentation contains a random selection of information. This presentation and its content should not be taken, and are not intended to be taken, as a legal advice by any recipient or reader . Al-Jad does not provide any warranties or guarantees in relation to any information or material provided in this presentation. Should you wish to receive formal legal advice, please contact one of our team leaders.

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