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Construction Law/Why Performance Guarantee & Liquidated Damages Are Not Applicable in Consultancy Services Contracts


Dear Mr, Florin,

I hope this note finds you healthy and thank you for your usual expert advice.

I was wondering to know about a logical reason behind: Why obtaining performance guarantee is not required in consultancy services contracts and also why liquidated damages are not applicable in consultancy services contracts.

Although, the nature of delay or defaulting is same as construction contracts but the above two important clauses which may help the client to recover any damages are not applied in most of the consultancy services contracts.

Mohammad Adil

Dear Mohammad,

Thank you for your question.

But as it is a rather rhetorical one, i.e. not related to a specific contractual situation, not very sure what to answer.

In some countries, there is a Professional Liability Insurance, which is a general one, not related to a specific project/ contract.

Probably there is no such insurance, due to actual price of a consultancy/ design contract, compared with price of a works contract.

And probably getting something out of it, it might be a too complicated hassle, as proving culpable fault of a consultant might be highly debatable hassle - not that I do not agree that some consultants should be shot at sight.

Not sure if that clarifies the matter for you, but hope that at the level of a friendly "chat", it does the job to provide an opinion.

Best regards.  

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Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List and of DRBF Chapter for Eastern Europe Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List Member of “” volunteers pool Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States

- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme ( - FIDIC Accredited Adjudicator

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- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at

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