IChemE launches revised Forms of Contract
6 Feb 2013
London – The IChemE has launched revised editions of the UK Forms of Contract – the product of several years’ work by its contract committee to ensure the new editions offered greater precision and clarity for the user.
The forms of contract were launched almost 50 years ago to help provide a standard approach to contractual agreements around industrial engineering and construction projects, which often create a potential minefield of legal and insurance issues.
Today, they are widely regarded as best practice in contracting for the design, construction and testing of process plants, such as chemical and nuclear processes, oil & gas, pharma and also performance-based plant contracts.
There are five contracts in the revised suite: The Red Book for lump sum contracts - 5th edition; the Green Book for cost reimbursable contracts - 4th edition; the Burgundy Book for target cost contracts - 2nd edition; the Yellow Book for process, mechanical and electrical engineering; and the Brown Book for civil engineering subcontracts - 3rd edition
“This is a cake that took a long time to bake,” commented committee chairman Gordon Bateman, noting the need to take account of improvements in best practice and new legislation such as the Local Democracy, Economic Development Construction Act 2009.
They also introduce innovations not seen in other standard forms. Changes include; rewritten insurance provisions, with clear contractual procedures and rewritten provisions for the performance test regime providing greater clarity for the management of these important tests which establish whether or not guarantees have been met.
The details of these provisions are a key differentiator from other standard forms of engineering contracts published in the UK.
Other significant changes include; a formal notice procedure, third-party rights provisions, extension of time provisions are enhanced and improved termination procedures.
The guide notes have also been reviewed and now feature flowcharts which set out the underlying logic and procedures contained within clause 35 (performance tests) in all forms except the Brown Book, where these tests are not applicable.
Simon Lofthouse QC of Atkins Chambers was appointed by IChemE to review all of the books before publication.
