Contract Agreement Definition: As per FIDIC Conditions of Contract the “Contract Agreement” means the contract agreement (if any) referred to in Sub-Clause 1.6. In addition to Contract Agreement Definition, the FIDIC Conditions of Contract also defines that the Parties should enter into a Contract Agreement within 28 days after the Contractor receives the Letter of Acceptance unless they agree otherwise. In general, the stamp duties are borne by the Employer.
Form of Contract Agreement
To make it uniform, the form of Contract Agreement is annexed to Particular Conditions. This form you should only slightly modify. Usually, it is very short (one to two pages long). It contains only basic information about the Contract, such as:
- Parties of the Contract
- Scope of the Works i.e. brief description of the Works which are subject of the Contract
- List of documents forming part of the Contract and usually their order of precedence
- Contractor’s obligation to execute and complete the Works and remedy any defects therein, per the Contract.
- Employer’s obligation to pay the Contractor for executed Works, per the Contract.
Priority of Documents
In case that the priority of documents is defined in the Contract Agreement, it is very important to make sure that it is the same as the priority of documents defined in Sub-Clause 1.5 [Priority of Documents]. The different priority of documents in different places inside the same Contract can cause serious issues during Contract Administration. Especially when ambiguities among Contract documents are found.
Is the Contract Agreement necessary?
Notwithstanding everything hereinabove mentioned, the Contract Agreement does not have to exist. Namely, the FIDIC Conditions of the Contract allows using the Letter of Acceptance as the start of the Contract between the Parties. In certain jurisdictions, receipt of Letter of Acceptance represents the start of the Contract between the Parties. However, you should check local legislation before you sign the Letter of Acceptance.
To conclude, it is highly advisable to always sign the Contract Agreement. This is to avoid possible issues during Contract Administration.