“Not using the already well thought out, available contract forms, and altering the contract forms arbitrarily leads to many construction disputes’, said Malith Mendis, who is the only FIDIC Accredited Contract Management Lecturer in South Asia. FIDIC is the International Federation of Consulting Engineers based in Geneva and publishes internationally accepted Construction Works Contract forms.
Addressing a public lecture on the topic “Allocation of Risks in Construction Contracts: Which book to use?” at the Institution of Engineers Sri Lanka, Mendis said, “ Our Contract management is poor, we tend to think that the more we tinker with standard forms of contract shows our prowess at Contract management. What has been well thought out over many years are changed to “favour” one party or the other, and these contracts end in disputes”.
“Construction contracts vary according to the risk and responsibility allocation to the parties. I have seen the Construction contract form used in Design-build contracts where the obligation of the Contractor to design and build to “fit for purpose” is missing, EPC/ Turnkey contracts used in deep underground works where nobody knows the risks involved. When standard forms of Contract are used, where tenderer contractors know the risk allocation, they can price it accordingly. FIDIC has recently published their “Golden Principles” which are inviolable if to be identified as a FIDIC Contract.”
He said, “Some of the local Contract forms available have been derived from International contracts and these have been haphazardly and thoughtlessly amended, resulting in fatal flaws in some of these contracts, and these lead to disputes. If contract forms are amended by way of particular conditions they must be carefully and well thought out ensuring no ambiguity and confusion. International contract forms can be easily adapted to local construction contracts with very little change in the conditions.”
“I advise that using internationally available contract forms with the least amendments is the best way to ensure success of a construction contract project, avoiding disputes”, Mendis said.
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