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Defect Liability Period Related FIDIC Guidence

The defect liability period begins when the Engineer issues a Taking Over Certificate. During this period, the contractor is responsible for remedying any defects or damage. The Employer must notify the contractor of any defects and provide a reasonable timeline for remedy. Once defects are remedied, the Engineer will issue a Performance Certificate, and the Employer must pay the balance of retention money to the contractor. The contractor can claim additional payment if the Employer uses part of the works before the Taking Over Certificate.

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615 views

Defect Liability Period Related FIDIC Guidence

The defect liability period begins when the Engineer issues a Taking Over Certificate. During this period, the contractor is responsible for remedying any defects or damage. The Employer must notify the contractor of any defects and provide a reasonable timeline for remedy. Once defects are remedied, the Engineer will issue a Performance Certificate, and the Employer must pay the balance of retention money to the contractor. The contractor can claim additional payment if the Employer uses part of the works before the Taking Over Certificate.

Uploaded by

buddikalr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Factors to be concerned and Related with the Defect Liability Period Under

FIDIC

1. The Employer does not have any obligation to use any part of the works until the
Engineer has issued a Taking over certificate (sub cl 10.2) at which time the defect
liability period starts. If the contractor incurs any cost as a result of the Employer taking
over or using a part of the works cause for an entitlement of the contractor to claim the
cost-plus reasonable profit.

2. The Employer shall promptly notify the contractor of any work to be remedied if due to
any cause within the provisions of the contract (sub cl 11.2) or otherwise variation
procedure shall apply.

3. In the case of failure by the contractor to remedy any defect or damage, it’s the
Employer’s responsibility to notify the contractor of the date by which the defect or
damage is to be remedied with a reasonable time (sub cl 11.4).

4. As soon as the defects liability period starts (Taking over certificate is issued) and the
payment has been certified by the Engineer, the Employer shall pay the contractor the
first half of the retention money (sub cl 14.9), or if not the contractor is entitled to
receive financing charges(sub cl 14.7)

5. As soon as the defects notification period expires (Performance certificate is issued) and
the payment has been certified by the Engineer, the Employer shall pay the contractor
the balance retention money (sub cl 14.9), or if not the contractor is entitled to receive
financing charges(sub cl 14.7)

6. The contractor shall give notice of the cost incurred as a result of the Employer’s taking
over and using a part of the works as soon as practicable and not later than 28days
after the contractor became aware (sub cl 10.2) and the contractor entitled to additional
payment (sub cl 20.1)

7. The contractor shall submit the statement at completion within 84days after receiving
the Taking-over certificate (defect liability period starts) for the works.

8. The Engineer shall deduct a reasonable amount from the contract price as he
determines the contractor has not remedied any defects or damage as required by the
employer (sub cl 11.4)
9. The Engineer shall determine or agree to pay cost plus a reasonable profit in which case
the contractor has searched for a defect that is found not to be the responsibility of the
contractor.

10. The Engineer shall issue the performance certificate within 28days after the expiry dates
of the defects notification periods or as soon thereafter as the contractor has completed
his obligations.

11. Once the Taking Over Certificate is issued, it is convenient for the Employer and
Engineer to provide the Contractor with an Extension of Time for Completion of just
sufficient duration conforming to the effective date of the Taking Over Certificate.
Regrettably, this is usually tied to an unfavorable level of the settlement of the
outstanding claims of the Contractor. Such offers are without contractual or economic
logic and are often more linked to the availability of Employer funding.

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