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Is the Employer obliged under FIDIC Silver Book (edition 1999) to describe which Documents are to be submitted to the Employer? (1 correct response applies)
A. Yes, the Employer should define which documents it wants to receive from the Contractor as Contractor's Documents in the Employer's Requirements, as stated in Sub-Clause 5.2.
B. No, because the Contractor has a duty to supply the Employer with every Document, given Sub-Clause
7.4.
C. No, according to Sub-Clause 5.7 provisional operation and maintenance manuals are always required.
D. Yes, because otherwise the Contractor doesn't have to submit any Document until Completion of the Works as stated in Sub-Clause 1.8.
Answer: A
Explanation:
Under the FIDIC Silver Book 1999 (Conditions of Contract for EPC/Turnkey Projects), the Employer must specify clearly in the Employer's Requirements which Contractor's Documents are to be submitted. Sub- Clause 5.2 states that the Contractor must submit all documents listed in the Employer's Requirements, ensuring clarity and enabling the Employer to control the documentation process.
Option D is correct because it highlights the need for Employer's Requirements to define the scope and content of the Contractor's Documents.
Option A is incorrect; although operation and maintenance manuals are generally required, they are part of the specified Contractor's Documents, not automatically required without Employer's direction.
Option B is incorrect as the Contractor's duty to supply documents is limited to those specified.
Option C is incorrect because documentation obligations are ongoing and not just at completion.
References:
FIDIC Silver Book 1999 Edition, Sub-Clause 5.2 - Contractor's Documents FIDIC Silver Book 1999 Edition, Sub-Clause 1.8 - Time for Completion FIDIC Contract Manager Study Guide, Module on Contract Administration Procedures
NEW QUESTION # 23
You are the Contract Manager for the Engineer in a hospital project using FIDIC Yellow Book (edition 2017).
The Employer demands perfection in the project's design and construction quality. There are many Variations initiated by the Employer during design and construction. Which one of the following is considered to be a valid Variation?
A. The Engineer instructs a change in slopes of the access road to the intensive care unit to meet the Employer's Requirement. The Engineer does so with a Notice in accordance with Sub-Clause 3.5.
B. The Employer verbally instructs a change in the type of doors. The Engineer issued a Notice describing the required change and denying any costs for the Contractor.
C. The Contractor submits a Value Engineering proposal regarding the lighting system for the operation rooms. The Engineer is positive about the proposal and tells the Contractor they need to look into it.
D. The Engineer requests a proposal regarding a change in type of windows and doors. The Contractor submitted the proposal accordingly to the Engineer. The Engineer instructs the Variation.
Answer: A
Explanation:
Comprehensive and Detailed Explanation:
Option B is correct: A Variation is a formal change to the Works instructed by the Engineer via a Notice (Sub- Clause 3.5). This includes changes to design or execution such as slopes on a road.
Option A is a proposal, not yet a Variation. Positive interest does not constitute a Variation.
Option C is partially correct but depends on formal instruction after proposal acceptance; the question specifies the Engineer instructs the Variation, but since it was a request for proposal first, the Variation instruction comes later. Without explicit instruction, this is not yet a Variation.
Option D is invalid as verbal instruction plus a Notice denying cost claims does not constitute a proper Variation.
References:
FIDIC Yellow Book 2017 Edition, Sub-Clause 3.5 - Variation Procedure
FIDIC Contract Manager Study Guide, Module on Variations and Change Management
NEW QUESTION # 24
Which of the following situations form legally binding contracts? (2 correct answers apply) Choose all of the correct answers (multiple possibilities)
A. The Employer received the Contractor's Letter of Tender and issued Letter of Acceptance.
B. The Employer received the Contractor's Letter of Tender and issued a conditional Letter of Acceptance.
C. The Employer received the Contractor's Letter of Tender and issued a Letter of Intent.
D. The Employer and the Contractor signed the Contract Agreement.
Answer: A,D
Explanation:
A legally binding contract is typically formed when there is an offer, acceptance, and intention to create legal relations. Under FIDIC contracts:
Option B (signing the Contract Agreement) unequivocally forms a binding contract.
Option D (Letter of Acceptance issued after receiving the Contractor's Letter of Tender) generally forms a binding contract unless otherwise specified, as the Letter of Acceptance is the formal acceptance of the tender.
Option A (Letter of Intent) is not necessarily a binding contract; it often serves as an interim arrangement signaling intent but may lack definitive terms to form a contract.
Option C (conditional Letter of Acceptance) may not form a binding contract unless the conditions are fulfilled.
References:
FIDIC Red and Yellow Books 1999 and 2017 Editions - Contract Formation Clauses FIDIC Contract Manager Study Guide, Module on Contract Formation and Execution
NEW QUESTION # 25
Under the FIDIC Construction Contract, which one of the following statements is correct?
A. A DAB must give its decision in writing on any dispute when requested by one of the Parties.
B. For an ad-hoc DAB, a retainer fee for each DAB Member must be paid to the Member on the first day of each calendar month.
C. If all persons nominated to serve as members of an ad hoc DAB do not sign a DAB Agreement, an appointing entity can make appointments.
D. Payment to DAB Members must be certified by the Employer.
E. Payments of a DAB Member's retainer fee is the sole responsibility of the Contractor.
Answer: A
Explanation:
Under the FIDIC Conditions of Contract (particularly 2017 editions), the Dispute Adjudication Board (DAB) is a standing or ad hoc body that provides binding decisions on disputes. One key requirement is that the DAB must give its decisions in writing upon request by either Party, ensuring clarity and enforceability.
Option E is correct as the DAB's decision must be documented formally.
Option A is incorrect; the cost of the DAB is generally shared by Employer and Contractor as per the contract.
Option B is incorrect because retainer fees can be paid on different schedules, not necessarily monthly on the first day.
Option C is incorrect; payments to DAB members do not require Employer's certification but are agreed as part of the DAB contract.
Option D is partially true but not a standalone correct statement without additional context.
References:
FIDIC Red, Yellow, Silver Books 2017 Edition, Clause 21 - Disputes and DAB Procedures FIDIC Contract Manager Study Guide, Module on Claims and Dispute Resolution
NEW QUESTION # 26
Which one answer holds two statements that are both correct with regards to risks and key considerations regarding the Golden Principles?
A. "The Contractor should take advantage of its bargaining power every time possible" AND "Disputes are avoided to the extent achievable, minimised when they do arise, and resolved efficiently."
B. "Only the Employer should be the one to obtain the best value for money" AND "The Contractor
/Subcontractor is paid adequately and timely in accordance with the Contract to maintain its cash flow."
C. "The Employer obtains the best value for money" AND "Disputes should be avoided to the extent achievable."
D. "The Contractor/Subcontractor is paid adequately and in a timely manner in accordance with the Contract to maintain its cash flow" AND "The terms of the Contract are comprehensive and fair to primarily the Employer".
Answer: C
Explanation:
Comprehensive and Detailed Explanation:
Option A correctly reflects Golden Principles emphasizing the Employer's objective of obtaining value for money and the importance of avoiding disputes as much as possible.
Other options either misrepresent the balanced nature of FIDIC principles or promote unfair or unbalanced positions.
References:
FIDIC Contract Management Guidelines - Golden Principles
FIDIC Contract Manager Study Guide, Module on Legal and Ethical Considerations
NEW QUESTION # 27
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