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Standard forms of contract: FIDIC vs NEC

In an article for Construction Law, White & Case partner Rebecca Shorter takes a look at the contract management approaches of the two most commonly used standard forms of construction contracts internationally – FIDIC and NEC – and how both standard forms have evolved in their most recent editions.

The article compares the NEC and FIDIC approach to a number of areas, namely time, cost, quality, and risk management, before going on to detail the most recent changes to the FIDIC Rainbow Suite and NEC4.

Shorter writes: "The FIDIC forms remain far lengthier documents than NEC, and are more detailed and prescriptive in their drafting. To be operated properly, the 2017 forms (in particular compared to their predecessors) require increased levels of contract administration from all parties to the Contract: Employer, Contractor and Engineer. If this is not done, the detailed nature of the contracts may result in plentiful opportunities for the parties to end up in breach their obligations.

"NEC drafting is briefer and needs to be read in the context of the parties' obligation to act "in a spirit of mutual trust and co-operation" (NEC, Clause 10). Where that spirit is not forthcoming, operational difficulties may be apparent.

"Notwithstanding their very different approaches, the trend that emerges in the most recent iterations of both forms is one of more sophisticated management of construction and engineering projects, with both entities adopting measures to increase their attractiveness as a standard form in the market."

To read the article in full, click here to go through Construction Law (paywall).