For purposes of this article, we refer to the relevant clauses of the FIDIC Conditions of Contract for Construction (“FIDIC Red Book”), but the principles can be applied to all standard forms of contract.
Sub-Clause 3.1 [Engineer’s Duties and Authority] of the FIDIC Red Book First Edition (1999) (“FIDIC Red Book 1999”), and Sub-Clause 3.1 [The Engineer] of the FIDIC Red Book Second Edition (2017) (“FIDIC Red Book 2017”), make it an obligation for the Employer to appoint an Engineer to carry out the duties assigned to him under the Contract.
Sub-Clause 3.1 of the FIDIC Red Book 1999 and Sub-Clause 3.2 [Engineer’s Duties and Authority] of the FIDIC Red Book 2017, provide that the Engineer shall have no authority to amend the Contract and/or relieve either Party of any duties, obligations or responsibilities under the Contract. It is only the Parties that can mutually agree to amend the Contract.
The above limitations on the Engineer’s authority, are somewhat misconceived and misunderstood by the Parties, given that the Engineer is expressly given the authority to:
- Issue instructions to the Contractor under Sub-Clause 3.3 [Instructions of the Engineer] of the FIDIC Red Book 1999 and Sub-Clause 3.5 [Engineer’s Instructions] of the FIDIC Red Book 2017; and
- Initiate Variations by an instruction under Sub-Clause 13.1 [Right to Vary] of both the FIDIC Red Book 1999, and the FIDIC Red Book 2017.
And the Contractor is obliged to:
- Execute and complete the Works in accordance with the Contract and the Engineer’s instructions under Sub-Clause 4.1 [Contractor’s General Obligations] of both the FIDIC Red Book 1999 and FIDIC Red Book 2017; and
- Execute and be bound by each Variation under Sub-Clause 13.1 [Right to Vary] of both the FIDIC Red Book 1999, and the FIDIC Red Book 2017.
As an example, and the situation that we commonly see, when Parties have contracted under the FIDIC Red Book, is that the Engineer issues an instruction for the Contractor to undertake an element of the design that it was not originally contracted to perform.
What the Parties and the Engineer forget to consider is that pursuant to Sub-Clause 4.1 [Contractor’s General Obligations] of both the FIDIC Red Book 1999 and FIDIC Red Book 2017, the Contractor is only obliged to design the Works to the extent specified in the Contract, and the Contractor shall not otherwise be responsible for the design or specification of the Permanent Works.
Subsequently, when considering the wording of Sub-Clause 4.1 of the FIDIC Red Book 1999 and 2017, an amendment to the Contract is required, to make it an obligation of the Contractor to carry out an element of the design that it was not originally contracted to perform, and the Engineer is not authorized to make such amendment to the Contract. This amendment to the Contract requires the agreement of both Parties, including agreement on how much the additional design obligation will cost, before it becomes a Contractor’s obligation.