Top 10 Mistakes in FIDIC-Based Contracts and How to Avoid Them
Executive Summary
FIDIC contracts are widely used in global infrastructure projects. While these offer a balanced framework, many Contractors and Employers misuse these, or fail to apply these properly, leading to costly disputes and financial losses. This article highlights 10 common mistakes in FIDIC-based contracts and provides practical strategies to avoid these, drawn from lessons across Africa, the Middle East, and Asia.
Introduction
FIDIC contracts are widely used in international construction and infrastructure projects, especially across Africa, the Middle East, and Asia. While these offer a balanced framework, improper use or misunderstanding of their provisions can result in costly delays, conflicts leading to become disputes, and financial losses. Having worked extensively across fragile regions and donor-funded projects, we have seen how common errors, often avoidable, undermine even the most promising projects.
This article highlights the 10 most common mistakes practitioners make with FIDIC-based contracts, and, more importantly, how to avoid these.
1. Ignoring the Importance of Proper Notices (Clause 20.1 / 20.2)
The Mistake: Contractors fail to issue timely and properly formatted notices for claims, variations, delays, unforeseen conditions or force majeure etc.
Consequence: Employer may reject the claim entirely on procedural grounds.
Avoidance:
- Build an internal “Notice Tracker” system.
- Train site teams on what events require formal notice.
- Always send notice first, details can follow later.
2. Vague or Incomplete Contract Data / Particular Conditions
The Mistake: Relying on generic contract forms without tailoring the Particular Conditions to project-specific risks.
Consequence: Gaps, contradictions, or ambiguities create fertile ground for disputes.
Avoidance:
- Involve contract specialists during tender stage.
- Clarify risk allocation, Employer obligations, dispute mechanisms, and governing law clearly in Particular Conditions.
- Don’t cut and paste without adapting to project realities.
3. Misunderstanding “Time for Completion” and EOT Mechanism
The Mistake: Treating the Completion Date as static, and submitting EOTs late or in bulk.
Consequence: EOTs are rejected, leading to time-related costs being unrecoverable.
Avoidance:
- Understand that EOT entitlement begins with a notice, not with a claim.
- Submit rolling EOTs based on updated schedules and actual impacts.
- Align EOT submissions with contemporaneous records.
4. Weak Documentation and Record-Keeping
The Mistake: Relying on memory, verbal communication, or delayed reporting.
Consequence: Loss of entitlement when disputes arise over delays, variations, or site conditions.
Avoidance:
- Maintain daily site diaries, photographs, email records, progress reports, and meeting minutes.
- Use centralized document control systems with access logs.
5. Mismanaging Subcontract Agreements (Back-to-Back Issues)
The Mistake: Subcontracts do not mirror the main contract or assign disproportionate risks to Subcontractors.
Consequence: Conflicts, payment delays, and exposure to claims from Subcontractors.
Avoidance:
- Ensure subcontract mirrors main contract on key clauses (EOT, payment, variations, dispute resolution).
- Include indemnity clauses to shield the main contractor from subcontractor defaults.
6. Not Enforcing Engineer’s Duties Under Clause 3.5 / 3.7
The Mistake: Accepting delays in determinations or silence from the Engineer without protest.
Consequence: Delayed or denied entitlements, or waiver of rights.
Avoidance:
- Formally remind the Engineer to act within specified timeframes.
- If delays persist, escalate using Clause 20 (Claims) or the dispute resolution clause.
- Document all communications and follow-up.
7. Overlooking Payment Certification Timelines
The Mistake: Not tracking when payment certificates should be issued or paid.
Consequence: Late payments without interest; cashflow pressure.
Avoidance:
- Maintain a clear log of submission and certification dates.
- Invoke Clause 14.8 for interest if payments are delayed.
- Raise formal correspondence—not just informal follow-up.
8. Treating Variations as Informal Changes
The Mistake: Executing variations without written instruction or valuation.
Consequence: Employer later refuses to pay, citing lack of formal variation order.
Avoidance:
- Follow the procedures in Clause 13 strictly.
- Never commence variation work without formal instruction or at least written acknowledgment.
9. Underestimating Dispute Avoidance Mechanisms
The Mistake: Going straight to formal dispute steps without using early resolution tools.
Consequence: Escalated legal costs, broken relationships, project delays.
Avoidance:
- Use the Dispute Avoidance/Adjudication Board (DAAB) early, if constituted.
- Engage in proactive early warning notices and informal resolution before escalating.
10. Failing to Understand Local Law Overrides
The Mistake: Blind reliance on FIDIC assuming it overrides national laws.
Consequence: Clauses may be unenforceable or interpreted differently by local courts/arbitral panels.
Avoidance:
- Get a legal review from local counsel during contract finalization.
- Understand how force majeure, termination, dispute resolution, and performance securities are treated locally.
Conclusion: Prevention is Cheaper Than Cure
Most disputes in FIDIC-based contracts stem not from technical issues, but from poor contract administration and failure to use the FIDIC tools properly. Whether you’re a contractor, consultant, or employer, mastering the basics, notice, records, timelines, and procedure, can make the difference between success and failure.
At Conslex Contract Solutions LLC, we help organizations navigate these contractual landmines with clarity and confidence. To discuss your contract risks, claims, or dispute prevention strategies, reach out at info@conslex.com.