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Construction Law/FIDIC Yellow and Red Book

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Question
Dear Sir,

There exists a contract opportunity and it is deemed to follow the guidelines of FIDIC Red Book and we as contractors are asked to sign a statement that we understand the conditions of FIDIC red book but in the same contract the client wants us the contractor to use FIDIC Yellow Book with a subcontractor due to the necessity of design; is this legally correct?

I understood that we as the contractor follow one contract with the client and we as the contractor can undertake whatever contract conditions we see fit with our subcontractors. If the client wanted involvment in all parts therefore the full contract should be FIDIC Yellow Book.

Thanking you and best regards

Paul

Answer
Dear Paul,

There is nothing wrong with using yellow book for the subcontractor if you have a red nook contract.  However.  Take care to ensure that the clauses are written correctly.  You might look at the FIDIC subcontract for red book contracts and see if there are clauses that should be included in the yellow book contract.  You can use red book for contractor's design if you wish and so the red book sub contract could be suitable for your subcontractor.  Yellow book tends to be used for design and build lump sum contracts.  Problems arise when the subcontractor is delayed by your action or inaction, but you are not delayed by the Employer's action or inaction.  Likewise, there are problems when the subcontractor delays your works or the works of other subcontractors.  Beware of your risks if you insist on a yellow book contract for your contract.  

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Peter M. Elliott

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First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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