11. November 2011 The European Society of Construction Law (ESCL) Construction contracts By Attorney Peter Wengler-Jørgensen

CONSTRUCTION CONTRACTS21 August Construction contracts Regulation in Denmark -AB 92, ABT 93, ABR 89 -Agreed documents  Agreed upon by parties within the industry – representatives from all sides  Only applies if agreed upon by the parties to the contract AB 92 -Standard conditions for work and deliveries in construction -Originally AB 52, revised in 1972 and in Used in almost every construction contract in Denmark  The public sector is obligated by law to use AB 92 when they put construction contracts out to tender (both national and international)  Most of the conditions are used as general rules within construction law

CONSTRUCTION CONTRACTS21 August Construction contracts ABT 93 -Standard conditions for turnkey contracts -Issued in Not as widely used as AB 92 ABR 89 -Standard conditions for technical consultancy services in regards to construction -Originally ABR 75, revised in Widely used by architects and engineers

CONSTRUCTION CONTRACTS21 August Construction contracts Agreed documents -Advantages  Flexibility - the conditions can be altered by the parties when needed  A balance of both parties’ interests  Customised for the reality of construction  Accepted by the parties as reasonable and practicable -Disadvantages  Legislation might be better to ensure full compliance  Legislation might be better to ensure political guidelines and safeguards - Consumer safeguards

CONSTRUCTION CONTRACTS21 August Construction contracts International construction contracts -FIDIC general conditions  Issued by the International Federation of Consulting Engineers (FIDIC)  Different books - FIDIC Conditions of Contract for Construction (Red book) - FIDIC Conditions of Contract for Plant and Design/Build (Yellow Book) - FIDIC Conditions of Contract for EPC Turnkey Projects (Silver book) - FIDIC Short Form of Contract (Green book) - FIDIC Conditions of Contract for Design, Build and Operate Projects (Gold book)  Has a wide application area and is used worldwide

CONSTRUCTION CONTRACTS21 August Construction contracts International construction contracts -FIDIC general conditions  Advantages - Flexibility - The different books are customised for different types of contracts - Reasonable risk allocation between the parties - Provides uniform conditions worldwide

CONSTRUCTION CONTRACTS21 August Construction contracts Construction contracts within the European Union -Currently no legislation or general conditions applicable specifically within the European Union -European Commission  Has suggested to work towards a European Contract Law to support economic activity within the internal European Market - Green Paper from the Commission 1. July 2010  Different suggestions in regards to the legal nature of the instrument of European Contract Law - Publication of the results of the Expert Group - Regulation establishing a European Contract Law and European Civil Code

CONSTRUCTION CONTRACTS21 August Construction Contracts Construction contracts within the European Union -General conditions such as FIDIC and AB 92 -More advantages than disadvantages  Good experiences with FIDIC and AB 92  Can be specifically tailored to different types of contracts such as the FIDIC books  Would be customised for the reality of construction  Would most likely be accepted by the parties as reasonable and practicable -Would provide the European Union with uniform guidelines, that could further construction contracts within the internal market

CONSTRUCTION CONTRACTS21 August Construction Contracts Construction contracts within the European Union -Consumer contracts  Legislation would probably be better to ensure consumer safeguards -Small companies  Do not have the same bargaining power  Might be a need for legislative safeguards -Legislation could be used within these specific areas