FIDIC: International standard forms of contracts

FIDIC contracts - "the Rainbow Suite"

FIDIC (Fédération Internationale des Ingénieurs-Conseils) is an international federation of consulting engineers founded in 1913 with members in almost 100 countries. FIDIC publishes different contract templates, each having their own scope of application and each characterised by a different colour - hence the name “the Rainbow Suite”. The most widely used FIDIC contract, the Red Book, was first published in 1957.

Purpose of the FIDIC contracts

The FIDIC contracts aim at allocating risks and responsibilities between the parties but are not “agreed documents”, i.e. documents that are formally approved or accepted by the parties involved (such as e.g. AB18). The contracts differ by allocating design responsibility and other responsibilities and obligations differently. The contracts have a generic structure based on common procurement strategies, and their broad scope make them suitable not only for traditional construction, infrastructure and wind farm projects but also for technological projects, e.g. for procurement of large logistics systems and production facilities. 

Most commonly used FIDIC contracts

The most recent contract, the Green Book, which was published in 2021, is a short form of contract intended for small projects. The contracts we see most commonly used, are the Red Book, the Yellow Book and the Silver Book. 

• The Red Book is most often used for traditional construction projects where the client/employer is responsible for the design.
• The Yellow Book is typically used for procurement of electrical/mechanical installations and in building projects where the supplier/contractor is responsible for the design.
• The Silver Book regulates turnkey projects and places most of the risk with the supplier/contractor, who is also responsible for the design.

The Red Book, the Yellow Book and the Silver Book were published in December 2017 as updates to the 1999 versions, which can still be used. In 2022, the contracts were republished with errata (corrections) and adjustments under the name "FIDIC Suite of Contracts 2017 Reprint 2022 with amendments." 

In addition to the above contracts, there are many other more specialised FIDIC standard forms of contract, including the White Book, which is a consultant services agreement similar to the Danish “ABR”.

FIDIC's Golden Principles

In the 1990s, FIDIC noticed that contracts were being rewritten to such an extent that the FIDIC principles and intentions were no longer reflected and therefore decided to introduce a set of principles ("Golden Principles") to guide the parties when amending a FIDIC contract.

The five "Golden Principles" were published in 2019 and set out the essential characteristics that - according to FIDIC - should not be amended if the contract is to be recognised as a genuine FIDIC contract. In practice, the principles are followed to varying degrees, but as with all model contracts, amending the individual clauses requires understanding of the overall contract and the overall distribution of risks. 

Advantages of FIDIC contracts

There are many advantages of using FIDIC contracts, including the following: 

1. The FIDIC contracts are relatively balanced. As described by FIDIC itself in its Golden Principles, the contracts are recognised for ensuring a fair and balanced risk/reward. Indeed, one of the principles (GP3) recommends that the parties do not change the balance of risk/reward allocation in the contract. But despite the intention of being fair and balanced, the contracts are in certain respects somewhat biased in favour of the employer/buyer - being drawn up by an association of consulting engineers (FIDIC) consisting typically of employers.
2. The contracts can be used in different legal systems across borders. Being originally based on the English legal system which has a tradition of detailed regulation, the contracts can be used in most countries. However, some adjustments will typically be necessary.
3. They are internationally recognised standards among contractors/suppliers. This allows faster and easier review of the contract by foreign contracting parties, and buyers/employers will not scare off potential suppliers.
4. The FIDIC contracts are internationally recognised standards within the finance sector, which may prove a significant advantage for project funding purposes. As an example, the World Bank has entered into an agreement with FIDIC to use FIDIC contracts in the projects funded by the bank. Furthermore, a special version of the Red Book contract (the Pink Book) is targeted multilateral development banks (MDB).
5. All FIDIC contracts are structured alike. If you know one FIDIC contract, it is easy for you to understand and assess the other FIDIC contracts. Once your organisation has become familiar with the FIDIC contract, there are significant advantages to using it as regards  negotiation and contract management in an international market.

Our advice

Our FIDIC practice group includes more than 15 lawyers with in-depth knowledge of the FIDIC contracts, having amended and negotiated the contracts both as legal adviser to the buyer/employer and to the supplier/contractor.

We combine our detailed legal knowledge of the FIDIC contracts with our in-depth understanding of the construction, energy and technology sectors and draw on our experience and resources across the areas..  

If your organisation is considering to use FIDIC contracts, please reach out and let us discuss it.

Industry-specific advantages and concerns

While the FIDIC contracts were originally developed for the construction industry, their scope of application has over the years expanded to include other industries as well, including the energy and technology sectors.

We elaborate on the industry-specific advantages and concerns relating to FIDIC contracts on the pages below:

Practice area

FIDIC in the technology industry

FIDIC contracts are increasingly used for long-term technology projects, where the technology system to be delivered needs to be...

Practice area

FIDIC in the energy sector

FIDIC is today the most widely used standard form of contract in wind projects, and the contracts are also increasingly used in other...

Practice area

FIDIC in the construction industry

FIDIC contracts are being increasingly used in the construction industry - also by Danish businesses with an international and global...