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Construction Law/FIDIC 7.7 - ownership of plant and materials

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Question
Hello,

While reviewing FIDIC 99 ("the red book") for one of our projects, we noticed that according to Sub-Clause 7.7, the Employer becomes the owner of all Plant and Materials delivered to the site.
How does that relate to matters of responsibility and risk of the parties, with regard to such plant and materials? What happens if the materials are stolen or damaged after delivered to the site but before incorporated in the permanent works? Who's responsible if there's damage caused by the materials and plant that are now considered to be the Employer's property?

Thank you in advance for your reply.

Answer
Hello,
The spirit of this clause is that once the materials are brought on Site in the purpose of the Works, they cannot be redrawn or took back by the Contractor - some of them can be, even, subject of the clause 14.5[Materials and Materials intended for the Works]. The responsibility for them, as well as for all the Site, is of the Contractor, who shall take care, maintain, keep safe and secured the materials - the clauses 17.2 [Contractor's care of the Works] and 1.1.5.2 [Goods] and 1.1.5.3 [Materials] refers to this.
So, the Contractor is responsible for the care of these materials up to the taking over.
Though, the provisions of the applicable law should be taken into consideration when considering the property/ownership issue - in some jurisdictions, to become the "owner" of some goods or materials involves some legal procedures. The intention of the clause 7.7 and the other ones mentioned above is as described.
Hope it helps.
Best regards,
Alina

Construction Law

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Alina Valentina Oprea

Expertise

I can answer to questions regarding FIDIC 1999 contracts, including practical use of these conditions of contract, as well as to questions regarding dispute boards, both from theoretical and practical point of view. I cannot answer to questions related to other kind of contracts or to procurement process, except to some (limited) extent.

Experience

Implementation of works contracts (FIDIC 1999) financed by different financial institutions, including European Union; claims and disputes; dispute boards See more on www.alinaoprea.com

Organizations
Dispute Resolution Board Foundation

Publications
see http://alinaoprea.com/publications/ ; DRBF Forum Newsletter; Drumuri si Poduri; Revista Constructiilor; SIDiR Newsletter

Education/Credentials
Graduated the University of Civil Engineering Bucharest, Faculty of Railways, Roads and Bridges (1985-1990); Trained under Mr. Gwyn Owen’s pupilage program for arbitrators/adjudicators under FIDIC mentoring program (2006 – 2007)

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