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If defects are identified during the Tests on Completion, which one of the following options is not available to the Parties under the Contract?
A. If the defects do not affect the use of the Works for their intended purpose, the Engineer can issue the Taking-Over Certificate.
B. The Employer can request to take over the Works.
C. By giving reasons, the Engineer can refuse to accept the Works until repeated tests have been successfully performed.
D. The Party which is not liable for the cost of rectifying defects can expect the other Party to pay the cost of performing the repeated tests.
Answer: D
Explanation:
Under FIDIC contracts, when defects are identified during Tests on Completion, the Engineer may still issue the Taking-Over Certificate if the defects do not materially affect the intended use (Option A). The Engineer can refuse acceptance until defects are rectified and tests repeated (Option B). The Employer can also request to take over the works (Option C).
However, Option D is not a standard contractual provision; the contract does not stipulate that the Party not liable for rectifying defects is entitled to payment for repeated tests. Typically, costs of repeated tests due to defects are borne by the liable party.
References:
FIDIC Red, Yellow, and Silver Books, Sub-Clause 10.1 and 10.3 - Taking Over and Tests on Completion FIDIC Contract Manager Study Guide, Module on Project Close-Out and Defects
NEW QUESTION # 38
If the Engineer is required to obtain the Employer's prior approval to issue determinations (including such requirement in the Particular Conditions) and such approval was not given by the Employer, what possible options are at stake for the Engineer to proceed? [1999 Edition] (2 correct answers apply) Choose all of the correct answers (multiple possibilities).
A. The Engineer should refer the matter in subject to the DAB.
B. Informing the Contractor of their inability of issuing the determination, in lack of the Employer's necessary approval.
C. Issuing the determination to the Contractor in the form and with the content agreeable to the Employer, with a remark, that it is the Employer's determination and not the Engineer's determination.
D. Remain silent and not do anything in the subject.
Answer: B,C
Explanation:
Under the FIDIC Red Book 1999 Edition, the Engineer is generally responsible for issuing determinations on claims and contract matters. However, if the Particular Conditions require the Engineer to obtain the Employer's prior approval before issuing such determinations, the Engineer's options become limited if that approval is not granted.
* Option C (Issuing the determination to the Contractor in the form and with the content agreeable to the Employer, with a remark that it is the Employer's determination and not the Engineer's determination)is a practical approach often taken. The Engineer may issue the determination as directed or approved by the Employer but must clarify that it reflects the Employer's decision rather than the Engineer's independent determination.
* Option D (Informing the Contractor of their inability to issue the determination, due to lack of Employer's approval)aligns with transparency and procedural correctness. The Engineer should notify the Contractor if they cannot proceed with the determination, explaining the reason to avoid misunderstanding or delay.
* Option A (Remain silent and do nothing)isnot appropriate, as it may cause project delays and disputes.
* Option B (Referring the matter directly to the Dispute Adjudication Board)without a determination from the Engineer is not standard procedure under the 1999 edition. The Engineer's determination or failure to determine generally triggers the dispute resolution process, but referral is normally after due process, including issuing or attempting to issue a determination.
Hence,Options C and Dare the appropriate courses of action.
References:
FIDIC Red Book 1999 Edition, Sub-Clause 3.5 - Determinations
FIDIC Red Book 1999 Edition, Particular Conditions (typical clauses on Engineer's authority) FIDIC Contract Manager Study Guide, Module on Claims and Dispute Resolution
NEW QUESTION # 39
Which one of the following documents constitutes a contract and is considered binding on both parties, when the Employer wants to award the Contract to the tenderer?
A. Letter of Intent
B. Memorandum of understanding
C. Letter of Intent & Memorandum of understanding
D. Letter of Acceptance
Answer: D
NEW QUESTION # 40
In case a Variation is initiated by the Engineer for prompt implementation ...... [FIDIC Red, and Yellow Books, 2017 Editions] Choose all of the correct answers (multiple possibilities).
A. ... the Contractor may send a Notice to the Engineer, that the subject of the Variation was Unforeseeable (having regard to the scope and nature of the Works), hence, the Contractor is not to start implementing the varied work promptly.
B. ... the Contractor is required to commence implementing the varied works even if it would pose immediate hazard to the safety of public areas surrounding the Site
C. ... the Contractor is required to commence implementing the varied works and take records of all the details ( ... regarding the details of the varied works executed, expenditures incurred, and impact on progress etc.)
D. ... the Contractor is not bound to start implementing the varied works right up until the price for the varied works is fully agreed (or determined)
E. ... the Contractor within 28 days after receiving such instruction shall submit to the Engineer a description of the varied work, a programme for its execution and a proposal for adjustment of the Contract Price.
Answer: C,E
Explanation:
Comprehensive and Detailed Explanation:
Option B is correct: When instructed to implement a Variation promptly, the Contractor must commence work and keep detailed records for subsequent valuation and impact assessment.
Option D is correct: The Contractor is required to submit, within 28 days, a description, programme, and price proposal relating to the Variation as part of contract procedures.
Option A is incorrect: The Contractor generally must proceed promptly regardless of dispute about foreseeability but may reserve rights via notices.
Option C is incorrect: Safety cannot be compromised; the Contractor should not undertake hazardous work without mitigation.
Option E is incorrect: The Contractor is generally bound to start work upon instruction even if the price is not yet agreed.
References:
FIDIC Red and Yellow Books 2017 Editions, Sub-Clause 3.5 - Variation Procedure FIDIC Contract Manager Study Guide, Module on Variations and Change Management
NEW QUESTION # 41
You are teaching a group of early career professionals in the Contract Management department about the FIDIC 2017 Rainbow Suite of contract, and you are explaining about the intention of Delay Damages. Which one of the following statements is correct?
A. None of the above.
B. Delay Damages is not intended to remove burden for the Employer to demonstrate and prove that it has suffered any loss or damage.
C. Delay Damages is intended to be treated as an incentive for the Contractor to perform on time.
D. Delay Damages is intended to provide full compensation to the Employer for all damages that it is expected to suffer as a result of the delay.
Answer: C
Explanation:
Delay Damages under FIDIC are primarily a pre-agreed measure to incentivize the Contractor to complete works on time rather than full compensation for all losses suffered. They simplify the process by avoiding the need for the Employer to prove actual losses.
Option A is incorrect; Delay Damages are generally not full compensation.
Option C is incorrect because Delay Damages remove the Employer's burden to prove actual loss.
Option B is the correct interpretation.
References:
FIDIC Red, Yellow, Silver Books 2017 Editions, Sub-Clause 8.7 - Delay Damages FIDIC Contract Manager Study Guide, Module on Delay Damages
NEW QUESTION # 42
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