Conclusion of contracts by using FIDIC contract forms – (in)compliance of sub-clause 20.1 with the Slovenian legal order

Conclusion of contracts by using FIDIC contract forms – (in)compliance of sub-clause 20.1 with the Slovenian legal order

Author: Miha Hočevar

In the upcoming period of economic resumption, attention will largely be focused on the substantial investment projects.[1] The legal framework of the latter is often regulated by autonomous rules, most often by the FIDIC contract forms.[2] As such rules are, by their nature, contract law, a conflict with the peremptory norms of the applicable law may arise.

Particularly problematic are the first two paragraphs of sub-clause 20.1 of the FIDIC contract forms, which stipulate that a contractor who considers to be entitled to any additional payment and/or extension of the time for completion must notify such claim in the prescribed manner, within the prescribed period of 28 days, otherwise he loses all rights in connection with this claim. It is clear that the subject provision determines a prescription period.

Contractual prescribing of such periods is disputable from the point of view of Slovenian law, more precisely Article 345 of the Code of Obligations. The analysis of the subject matter by means of the use of legal arguments and methods of interpretation reinforces the idea that the provision of sub-clause 20.1 is in conflict with the peremptory norm of the Code of Obligations and consequently null and void.

It is therefore recommended that when concluding and fulfilling a contract that invokes the application of FIDIC contract forms the contracting parties act pragmatically and do not give effect to the provision in question. By doing so, they can avoid the inconvenience caused by a situation where the annulment of the provision is established post festum by a court of law.

Read more about the provision of sub-clause 20.1 of the FIDIC contract forms, the mentioned theoretical analysis, potentially relevant case law and other arguments in the article (In)compliance of sub-clause 20.1 of the FIDIC contract forms with the Slovenian legal order, which is available to subscribers of Pravna Praksa at: https://www.pravnapraksa.si/LITE/Besedilo.aspx?SOPI=L010Y2020V20-21P23-24N1

[1] The largest and most important is certainly the Second Track of the Divača – Koper railway line project. When reviewing its tender documentation, we can notice the provision: “The rights and obligations of the contracting parties in carrying out the tendered works are determined by the contract, which also includes the” Conditions of Contract for Construction. For Building and Engineering Works designed by the Employer”; FIDIC, first edition 1999 – Red Book (hereinafter: General Terms and Conditions of Contracts) and the Contracting Authority’s “Special Terms and Conditions of Contracts“. Public procurement dossier 002088/2020, available at https://www.enarocanje.si/Obrazci/?id_obrazec=348017

[2] Contract forms prepared by the International Federation of Consulting Engineers (FIDIC) to assist participants of construction contracts and have the nature of general conditions. The subject of this article are the most frequently used contract forms – Red, Yellow and Silver Book. For more see Jaeger, Axel-Volkmar, Hök, Götz-Sebastian: FIDIC – A Guide for Practitioners, Springer, Berlin 2010.

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