Fidic

"GCC"
GENERAL CONDITIONS OF CONTRACT

FOR SUBCONTRACTORS
(INTERNATIONAL CONSTRUCTION)
(Edition May 1, 2005)
Article 1 - Construction Documents ..................................................................................................... 1

Article 2 - Working Places, Access Roads, Hook-up to Utilities .......................................................... 2
Article 3 - Cooperation on the Site....................................................................................................... 2
Article 4 - Staff ..................................................................................................................................... 3
Article 5 - Works................................................................................................................................... 3
Article 6 - Laws .................................................................................................................................... 5
Article 7 - Training................................................................................................................................ 5
Article 8 - Prices................................................................................................................................... 6
Article 9 - Invoicing (Monthly and Final Statements) ........................................................................... 6
Article 10 - Payment .............................................................................................................................. 7
Article 11 - Deadlines............................................................................................................................. 9
Article 12 - Rights of the General Contractor....................................................................................... 10
Article 13 - Liquidated Damages.......................................................................................................... 10
Article 14 - Insurance........................................................................................................................... 10
Article 15 - Termination of Contract ..................................................................................................... 11
Article 16 - Tests .................................................................................................................................. 12
Article 17 - Taking Over of the Works.................................................................................................. 13
Article 18 - Risk and Liability................................................................................................................ 14
Article 19 - Defects Liability ................................................................................................................. 14
Article 20 - Language........................................................................................................................... 16
Article 21 - Correspondence ................................................................................................................ 16
Article 22 - Transport and Customs Clearance ................................................................................... 16
Article 23 - Miscellaneous.................................................................................................................... 16
Article 24 - Disputes............................................................................................................................. 17
Article 25 - Text of the Performance Security (Art. 5.2)....................................................................... 17
Article 26 - Text of the Advance Payment Security (Art. 10.1) ............................................................ 17
Article 27 - Text of the Defects Liability Security (Art. 10.6) ................................................................ 18
Preliminary Remarks
The following definitions shall apply to these Conditions and all contract documents: Art. = Article; Appendix =
Appendix to the Contract Agreement; days = calendar days. Further definitions are set forth in the Appendix.
Article 1 - Construction Documents
1.1 The Subcontractor may use the documents provided by the General Contractor or by third parties solely for
performing the contract. Any other use shall be subject to the approval of the General Contractor.
1.2 The Subcontractor, exercising the due care of an expert, shall promptly check the documents provided by
the General Contractor, especially for their completeness and technical feasibility; in addition the
Subcontractor shall examine whether the documents are in compliance with the laws of the country where
the Works are to be executed and whether is the risk of a potential infringement of property rights. The
Subcontractor shall promptly inform the General Contractor in writing of any defects that the Subcontractor
can reasonably be expected to discover when applying due care, and of any reservations about the
contemplated mode of execution, substantiating its reasons in detail. If the Subcontractor fails to do so, it
shall be responsible for any damage thus incurred. If possible, the Subcontractor shall furnish information on,
or suggestions for, correction or improvement within a reasonable time. The General Contractor shall then
notify its decision in due time. If the General Contractor fails to take into account the reservations which have
been made by the Subcontractor on reasonable grounds, the General Contractor shall be responsible for
any extra costs that may thus be incurred; proof of such costs shall be furnished upon demand.
PORR: GCC Subcontractors (International) Edition May 1, 2005 Page 2
1.3 If the Subcontractor performs design work, the exclusive license thereto shall pass to the General Contractor
to the greatest extent possible. Title to the Drawings shall pass to the General Contractor on their delivery.
Article 2 - Working Places, Access Roads, Hook-up to Utilities
2.1 To the extent this is absolutely necessary for executing the Works, the General Contractor shall make
available to the Subcontractor areas for the storage of equipment and materials and for the placing of
containers. Details shall be specified by the General Contractor's site manager, unless they are included in
the Contract Agreement.
2.2 The Subcontractor shall ensure sufficient safety of its work area and, at its own expense, shall regularly
dispose of and remove from the Site any rubbish that may have arisen. During the progress of the Works,
the Site shall be cleaned on a regular basis. Upon request, the Subcontractor shall furnish to the General
Contractor proof of proper disposal.
2.3 The nature, scope and cost of any work to be executed or supplies to be made by the General Contractor
are regulated in the Contract Agreement.
Article 3 - Cooperation on the Site
3.1 The Subcontractor is aware of the fact that during the performance of its work on the Site, other companies
will also perform work there; therefore, the Subcontractor must expect obstructions which must be reckoned
with from experience. Such aggravation is deemed to be covered by the agreed prices. If several
subcontractors work concurrently on the Site, any mutual obstruction shall be avoided to the extent possible.
The Subcontractor shall adjust the employment of its staff and its machines and equipment to the respective
rate of progress and shall cooperate with the General Contractor's site manager and with other
subcontractors of the General Contractor in such a way as to ensure that construction will progress quickly
and smoothly. The Subcontractor shall reach agreement with other subcontractors of the General Contractor
of its own accord and shall inform the General Contractor's site manager accordingly. If no agreement can
be reached, the decision will be taken by the General Contractor.
3.2 Either contracting party shall notify the other party as soon as possible of any facts which may obstruct the
execution of the Works and shall furnish proof of such notification upon request.
3.3 As long as the Subcontractor works on the Site and, if deemed necessary by the General Contractor, also
prior thereto, the Subcontractor is obligated to take part in project progress meetings of all General
Contractor's subcontractors; such progress meetings shall be convened by the General Contractor's site
manager and, as a rule, will be held once a week.
3.4 At the General Contractor's request, the Subcontractor shall maintain a job record on the Site and shall
submit the entries to the General Contractor's site manager on a daily basis; the form and contents of such
job record shall be determined by the General Contractor's site manager. The General Contractor shall be
permitted to inspect the job record at any time and shall also have the right to make its own entries on any
important events. Silence on the part of the General Contractor does not constitute implied consent to any of
the Subcontractor's entries.
3.5 If any part of the Works is to be covered up, the Subcontractor shall give notice thereof to the General
Contractor at least three days in advance, requesting the examination of any such Works. Such examination
shall be deemed to have been carried out if the General Contractor does not object to the executed Works
by making an entry in the job record at the scheduled date. Such examination shall not release the
Subcontractor from its responsibility.
3.6 If equipment, materials or other auxiliary materials of the Subcontractor have been brought on to the Site, the
Subcontractor may not remove them or any part thereof from the Site without the approval of the General
Contractor.
3.7 Working hours shall be determined in accordance with the instructions of the General Contractor's site
manager. If necessary, work shall also be performed outside the regular working hours.
3.8 If objects of archeological, artistic, scientific or other important value are discovered during the performance
of the work on erection or assembly sites and the like, the Subcontractor shall take all the measures
prescribed under the regulations of the country where the Works are to be executed and shall notify the
General Contractor thereof without delay.
Article 4 - Staff
4.1 The Subcontractor shall execute its Works using staff of its choice and shall ensure that sufficient staff with
the necessary tools, equipment and materials shall be present on the Site for the contractual execution of the
Works. The Subcontractor shall be solely responsible for compliance with the obligations existing vis--vis its
workers as imposed by law and by the authorities. It shall exclusively be the duty of the Subcontractor to
enter into any agreements and take any measures that regulate its relationship with its workers.
4.2 Any worker who shows a grossly improper conduct or by his conduct affects the contractual execution of the
Works or impedes other subcontractors of the General Contractor shall be removed from the Site without
delay at the demand of the General Contractor.
4.3 The Subcontractor shall ensure that a site manager who can write and is fluent in the working language
specified in the Appendix shall be present on the Site during working hours. The site manager shall be
named to the General Contractor in writing.
4.4 The Subcontractor shall nominate a representative authorized to represent the Subcontractor in all matters
concerning this contract and shall inform the General Contractor of the name of such authorized
representative in writing no later than 14 days prior to the commencement of the Works on the Site.
Article 5 - Works
5.1 Unless stipulated otherwise by mandatory law, the Subcontractor shall observe the agreed standards in
executing its Works. The Works of the Subcontractor shall in any event correspond to the state of the art.
5.2 To provide security for its contractual obligations, the Subcontractor shall deliver to the General Contractor,
within 7 days of concluding the contract, a performance security issued by a bank approved by the General
Contractor and corresponding to the form set forth in Art. 25. The amount of such performance security shall
be specified in the Appendix as a percentage of the Contract Price (including turnover tax) at the time of
awarding the contract. If additional contracts are awarded, the amount of such performance security shall be
increased accordingly. It must be possible for the General Contractor to draw on the performance security
upon first written demand, without examination of the legal grounds underlying the claim. The performance
security shall be valid for a period ending 30 days after the contemplated deadline for the taking over by the
Employer (see Appendix) and shall be extended accordingly if the dates are postponed.
If the Subcontractor is in default in delivering the performance security, the General Contractor is entitled to
retain parts of the payments to the Subcontractor by way of security for the performance of the contract until
the amounts thus retained equal the amount of the performance security. The amount thus retained shall not
bear interest and shall be retained by the General Contractor until delivery of the performance security, but
not beyond the due date of the final statement.
If the Subcontractor is in default in delivering the performance security, the General Contractor is furthermore
entitled to terminate the contract after granting a grace period of 14 days.
5.3 The place of performance for all Works of the Subcontractor shall be the Site, unless the General Contractor
specifies a different place for planning/design work and for the supply of documents.
5.4 The Subcontractor shall execute the Works at its own responsibility and within the scope of its own business.
The Subcontractor may not subcontract the whole of the Works to third parties. If, however, part of the
Works is to be executed by subcontractors, the Subcontractor shall name such subcontractors to the
General Contractor in writing in due time prior to the awarding of the contract. The General Contractor may
refuse any subcontractor named on reasonable grounds and shall notify the Subcontractor thereof in due
time. The refusal of a subcontractor by the Employer shall in any event be deemed reasonable grounds.
5.5 The General Contractor is entitled to issue any instructions to the Subcontractor that may be necessary for
the contractual execution of the Works. If the Subcontractor has any reservations about instructions of the
General Contractor or about supplies (materials, goods) or about the work of other contractors, to the extent
such work is connected with the Works of the Subcontractor, it shall inform the General Contractor thereof in
writing without delay even if the General Contractor is a specialist. If possible, the Subcontractor shall make
suggestions for improvement within a reasonable time. The General Contractor shall then communicate its
decision in due time. If the Subcontractor fails to inform the General Contractor of its reservations or if the
General Contractor does not make a decision, either party shall be liable for the consequences of its
omission.
5.6 Before commencing its Works, the Subcontractor shall duly satisfy itself, applying due care, as to the proper
condition of any part of the Works already completed. Even if the General Contractor is a specialist, the
Subcontractor shall inform the General Contractor in writing and prior to commencement of its Works of any
defects discovered which in its opinion may have an adverse effect on the stipulated characteristics of the
Works to be executed by it. If the General Contractor does not take the justified reservations into account
and if damage occurs that is due to the notified defects, the Subcontractor shall not be liable for such
damage.
5.7 The Subcontractor shall also carry out any work which is not expressly specified in the contract documents
but which is necessary to render its Works complete and functional, taking into account the quality standards
of the building project as a whole. In this respect, the Subcontractor guarantees the completeness of its
Works. The agreed quality standards shall also be applicable to such work, and such work is deemed to be
covered by the agreed prices. The foregoing shall also apply to ancillary work. Ancillary work shall mean
relatively minor work which in accordance with common practice must be carried out even if it is not specified
in the contract documents, provided that such ancillary work shall only be carried out to the extent it is
indispensable for, and directly associated with, the complete and expert execution of the contractual Works.
5.8 The General Contractor is entitled at any time to examine the contractual performance of the Works as well
as the storage of materials and goods. The Subcontractor shall ensure that this shall also be rendered
possible with regard to its subcontractors.
5.9 Upon the request of the General Contractor, the Subcontractor shall make available to the General
Contractor such documents regarding its Works as are required for the progress reports, including without
limitation records of the staff and equipment employed by the Subcontractor on the Site on each work day of
the period under review, the degree of completion of its Works in proportion to its Works as a whole, and a
survey of the Works to be executed by the Subcontractor during the subsequent month; such reports shall
be submitted in the form and language required by the General Contractor from time to time and in due time.
Details shall be determined by the General Contractor.
5.10 The General Contractor is entitled to cancel parts of the Works. The General Contractor is furthermore
entitled to modify the type, extent or quantities of the Works agreed upon or the conditions under which the
Works are to be executed or demand additional work that is not provided for in the contract.
5.11 If either contracting party deems modifications of the Works agreed upon or of the conditions under which
the Works are to be executed and/or additional work necessary, it shall notify the other contracting party
thereof promptly and shall furnish proof of such notification upon request. The Subcontractor may start to
execute such work only after the written approval of the General Contractor has been obtained, except in the
case of imminent danger.
5.12 If the modification of the Works or of the conditions under which the Works are to be executed affects
contractually agreed prices, or if the parties agree on additional work, the Subcontractor shall notify the
General Contractor in advance of any price adjustments and/or the prices for additional work. To that end,
the Subcontractor shall submit to the General Contractor, as early as possible, a supplementary tender with
new prices (together with the method of their determination), based on the pricing and calculations of the
contract. The General Contractor shall inspect such tender as early as possible, reach agreement with the
Subcontractor and execute a written amendment to the contract together with the Subcontractor.
5.13 Any work executed by the Subcontractor without an order or in arbitrary deviation from the contract shall be
remunerated only if such work is subsequently acknowledged by the General Contractor. Otherwise, the
Subcontractor shall remove the work within a reasonable time upon request; if the Subcontractor fails to do
so, the work may be removed at the expense of the Subcontractor. The Subcontractor shall indemnify the
General Contractor for any damage caused.
5.14 If, for the performance of any part of the Works, the General Contractor provides workers, materials or goods
which, under the contract, should have been provided by the Subcontractor but which the Subcontractor was
unable to provide for reasons for which the Subcontractor is responsible, the costs of the provision of such
workers, materials or goods shall be deducted from the payments to the Subcontractor. The Subcontractor's
site manager is entitled to reach agreements with the General Contractor in this respect. The foregoing
provision shall also apply if materials or goods are extracted, mined or otherwise obtained on site.
5.15 Work and supplies which exceed the scope of the order as well as all daywork shall be commissioned in
writing in advance. Daywork shall be submitted to the General Contractor's site manager for confirmation on
a daily basis and shall only be recognized if the Subcontractor furnishes all proof requested by the General
Contractor's site manager in the manner and number determined by the site manager. In the case of
daywork, no payment will be made for supervising staff nor will any surcharges be paid for work performed
outside regular working hours. Payment will only be made for the actual working hours (excluding site-to-
quarter times) and for the material actually used. Transportation to the site, loading and unloading, proper
storage and safety measures as well as any and all expenses incurred in relation to the materials are
deemed to be covered by the prices of the materials.
5.16 If the Subcontractor is to carry out design work and if the Subcontractor is not qualified to perform such work
under the laws of the country where the Works are to be executed, the Subcontractor shall retain a qualified
subcontractor, which shall at least confirm the conformity of the design work with the laws of the country
where the Works are to be executed.
5.17 The Subcontractor warrants that it has good and valid title to the materials and equipment supplied by it and
that they are not encumbered with any rights of third parties.
5.18 The Subcontractor shall agree with each of its subcontractors that in the event of the Subcontractor
becoming insolvent or the contract between the General Contractor and the Subcontractor being terminated,
the General Contractor may enter into the respective subcontractor agreement instead of the Subcontractor
by giving the subcontractor unilateral written notice thereof. If the General Contractor exercises such right,
the subcontractor cannot transfer to the General Contractor any objection or complaint it may have to or
against the Subcontractor and the subcontractor shall have a claim to payment from the General Contractor
solely for work performed or supplies made after the General Contractor has entered into the subcontractor
agreement.
5.19 If under the applicable law subcontractors of the Subcontractor are entitled to payments from the General
Contractor, the following shall apply:
a) The General Contractor may make payments to the Subcontractor conditional on the Subcontractor
providing proof that it has met its payment obligations vis--vis its subcontractors.
b) If the General Contractor is required to make payments to subcontractors of the Subcontractor, the
Subcontractor shall indemnify and hold the General Contractor harmless from and against any
expenses incurred thereby. The General Contractor may draw on the performance security to secure
this obligation.
Article 6 - Laws
6.1 In executing its Works, the Subcontractor shall observe all applicable laws, including without limitation those
of the country where the Works are to be executed. This shall apply especially to the fulfillment of the
requirements for performing certain activities (such as importing goods into the country where the Works are
to be executed) and to regulations of construction law, to the legal provisions concerning the use of
construction materials and items of equipment, of tax law, in particular the registration of the Subcontractor
with the tax authorities, and of labor and social law. The Subcontractor warrants that such regulations shall
also be complied with by its staff and its subcontractors. The Subcontractor shall inform itself about such
regulations on its own initiative, and the General Contractor shall have no duty to supply information in this
respect.
6.2 Upon request, the Subcontractor shall prove to the General Contractor that the Subcontractor or its
employees or its subcontractors have complied with the obligation to obtain all licenses or permits,
registrations or approvals prescribed under the applicable laws, including without limitation those of the
country where the Works are to be executed.
Article 7 - Training
The Subcontractor shall, at its own expense, train staff of the Employer or operator in the operation,
maintenance and care of the technical plant and other facilities of the Works in such a way as to enable the
staff to commission the Works upon taking over, provided that such staff shall possesses general knowledge
in the handling of plants and facilities which are similar to those for which the training is intended. The place,
time and duration of such training shall be announced by the General Contractor.
Article 8 - Prices
8.1 The prices payable in accordance with this contract are deemed to cover any and all Works carried out by
the Subcontractor.
8.2 Works shall be remunerated at prices for daywork (hourly rates) only if the General Contractor has
commissioned, or has agreed to the execution, of the Works at such prices for daywork (see Appendix) and
if the Subcontractor furnishes the proof stipulated in Art. 5.15.
8.3 Unless expressly stipulated otherwise, the agreed prices shall not be subject to any fluctuation whatsoever,
especially not to fluctuation due to changes in wage costs, social security contributions or cost of materials.
The foregoing shall apply to lump-sum prices, to unit prices, and to prices for daywork.
8.4 The agreed prices are deemed to include any and all taxes, charges, duties and import duties levied in the
country where the Works are to be executed or in any other country in connection with the conclusion or the
carrying out of this contract, as well as surcharges to any of the foregoing, and compulsory contributions to
organizations set up for the representation of interests or similar institutions (hereinafter referred to as
"taxes"). The Subcontractor shall file all documents to be drawn up under the applicable regulations with the
competent public authorities and shall pay the pertinent taxes. If taxes are to be paid by the General
Contractor, the General Contractor shall notify the Subcontractor without delay and the Subcontractor shall
refund the taxes paid by the General Contractor within 14 days.
8.5 Unless separate payment is explicitly provided for, the agreed prices are deemed to cover everything the
Subcontractor is required to do in connection with the Works under this contract, including all wages and
ancillary wage costs (including without limitation the costs of board and lodging, overtime, work during the
night, work on Sundays and holidays, if this is required for observing the contractual deadlines), costs of
material, transportation costs, equipment costs, costs of site installations, costs of ancillary work and costs of
measures ensuring safety and protection from adverse climatic or seasonal conditions, as are necessary in
order to execute the described Works as provided for in the contract, free from defects and in
correspondence with all laws, the standards of the country where the Works are to be executed and the state
of the art; this shall apply even if necessary details are not set forth in the Contract Documents.
8.6 The Subcontractor confirms that it has satisfied itself as to the local conditions and working conditions on the
Site and has taken such conditions into account in agreeing on the price set forth in the Contract Agreement.
8.7 If individual Works are billed by quantity and if the Works actually executed differ (upwards or downwards)
from the quantities specified in the bill of quantities by more than the threshold value stipulated in the
Appendix, the Subcontractor is obligated to inform the General Contractor in writing without delay as soon as
it becomes aware of any such difference. The unit prices concerned shall be fixed anew by adjusting them to
a reasonable extent, provided that the amount of the adjustment follows from the Subcontractor's cost
calculation and proof is furnished in the form of a detailed calculation. If no threshold value is stipulated in
the Appendix, such value is deemed to be 20%.
Article 9 - Invoicing (Monthly and Final Statements)
9.1 The monthly and final Statements shall be issued in conformity with the laws of the country where the Works
are to be executed. If such laws provide for an invoicing procedure which deviates from that described
below, the Subcontractor shall deliver to the General Contractor the documents described below, together
with the statements made out in accordance with the laws of the country where the Works are to be
executed.
9.2 Statements shall be submitted to the General Contractor's site manager. Statements shall be numbered
consecutively by the Subcontractor and issued in the form and number requested by the General
Contractor's site manager in such a way that they can be examined. The Contract Agreement as well as the
work performed shall be briefly described and, if work is to be billed at unit prices, such work shall be stated
in the same order as in the bill of quantities and/or supplementary tenders. The documents necessary for
examination shall be enclosed. If daywork has also been performed, daywork shall be invoiced separately in
the next statement as per Art. 9.7.
9.3 If the contract is awarded at a lump-sum price, accounting shall be made independently of the work actually
executed. The Subcontractor confirms that it had sufficient knowledge of the nature and scope of the Works
when agreeing on the prices. If the Subcontractor subsequently detects any pricing errors, the price shall not
change.
9.4 If accounts are to be rendered pursuant to a bill of quantities in which unit prices are quoted, the work
performed shall be measured jointly by the General Contractor and the Subcontractor. If any work performed
cannot be measured any more or can be measured only at great difficulties once work has been continued,
the Subcontractor shall request mutual measurement in due time. If the Subcontractor has failed to do so, it
shall take the necessary steps to enable subsequent measuring at its own expense.
9.5 If one party had valid reasons to measure Works alone, the other contracting party shall be notified of such
measurements in writing as soon as possible and such measurements shall be deemed accepted by the
other party if no objections are raised in writing within 30 days of receipt of the notice. If either contracting
party refuses to approve unilateral measurements, measurements shall again be taken, this time jointly and
at the expense of the losing party.
9.6 Quantities shall be calculated on the basis of the measurements made as per Articles 9.3 and 9.4.
Statements shall be issued on the basis of the quantity thus calculated, multiplied by the agreed unit price of
the respective work.
9.7 The Subcontractor shall be paid on the basis of monthly statements covering the work performed in the
preceding calendar month. Each such monthly statement shall have a schedule specifying the total work
performed since commencement of execution, in the amount determined, and the prices agreed for such
work as well as the work invoiced in the preceding monthly statements. Payments already made shall not
affect the decision regarding applicable unit prices or quantities acknowledged in final statements.
9.8 If a lump-sum price has been agreed for the Works and if no other payment terms have been agreed, the
Subcontractor is entitled to bill the work executed by it on a monthly basis in arrears, and shall invoice such
portion of the overall price that is commensurate with the value of the work executed to the overall value of
the Works.
9.9 If a payment schedule has been agreed which provides that individual interim payments shall be made at
specific times, the General Contractor is entitled to withhold a reasonable portion of such amount if the
Subcontractor is late in the proper performance of the Works, provided that the observance of the payment
schedule would result in a gross incongruity between the rate of progress and the extent of the payment.
Such amount may be retained as long as the incongruity persists.
9.10 The total Works shall be billed in the final statement; any subsequent billing of work performed is excluded.
The final statement shall be designated as such and shall be presented to the General Contractor no later
than 42 days following the taking over. If the final statement is rendered prior to the taking over (Art. 17), the
payment period (Art. 10.2) shall commence on the day of the taking over.
9.11 If any monthly statement or the final statement is so faulty that the General Contractor can neither examine
nor correct it, it shall be returned to the Subcontractor, for revision, and shall again be presented by the
Subcontractor within another thirty days.
9.12 If under the laws of the country where the Works are to be executed it is impossible, or possible only with
great difficulty, to correct a statement which has already been issued, the Subcontractor shall submit to the
General Contractor's site manager a draft of the proposed statement along with all the necessary
documentation and shall invoice the General Contractor for the accepted undisputed amount. If such amount
is less than the amount claimed by the Subcontractor, the issuing of the statement on the part of the
Subcontractor shall not constitute a waiver of claims which exceed the invoiced amount.
Article 10 - Payment
10.1 If an advance payment has been agreed, such advance payment shall be due upon presentation of an
advance-payment security issued by a bank approved by the General Contractor, upon the performance
security (Art. 5.2) being on hand, but not earlier than 30 days after the signing of the contract. Such advance-
payment security shall correspond to the form set forth in Art. 26, and it must be possible for the General
Contractor to draw on the security in the amount of the advance payment upon first written demand, without
examination of the legal grounds underlying the claim. The security shall be valid for a period ending 30 days
after the contemplated deadline for taking over the entire Subcontractor's Works by the Employer (see
Appendix) and shall be extended accordingly if the dates are postponed. Upon payment of each monthly
statement, the General Contractor shall reduce the amount of the advance payment security accordingly. If
under the laws of the country where the Works are to be executed the advance payment is subject to
turnover tax, the amount of the advance payment security issued shall also include the amount of the
turnover tax.
10.2 The due dates of statements are stipulated in the Appendix. The payment period of a statement shall
commence when the General Contractor receives the properly issued and verifiable statement. Payment will
be deemed to have been made in due time if the General Contractor, within the payment period, instructs its
bankers to transfer the funds.
10.3 If a statement is returned to the Subcontractor as set forth in Art 9.11, the payment period shall recommence
upon presentation of the revised statement. In all other cases, the payment period shall be extended by the
number of days by which the examination of the statements is postponed due to the fault of the
Subcontractor.
10.4 If Works are executed before the stipulated deadline, the payment period shall commence only on the day
on which the Works should have been executed according to the contract. If, however, the General
Contractor has agreed to the earlier execution of the Works or has started to use such Works, the payment
period shall commence on receipt of the statement.
10.5 As long as the Works have not been taken over, an amount shall be retained from the accepted amount of
each monthly statement which is set forth as a percentage in the Appendix and which shall be calculated on
the basis of each accepted amount of such monthly statement, excluding deductions. Irrespective of the time
of the taking over, such retentions shall be retained until all Works of the Subcontractor have been taken
over by the Employer. In addition, the following shall be retained from the accepted amount of each monthly
statement, if applicable: a pro-rata advance payment (Art. 10.1), other contractual deductions, liquidated
damages (Art. 13), or other counterclaims of the General Contractor. Payments of statements shall not
constitute acceptance of the quantities contained therein.
10.6 As security for the satisfaction of the Subcontractor's obligations after completion of its Works, the General
Contractor is entitled to retain such percentage of the amount of the final statement (including turnover tax)
as is specified in the Appendix for the duration of the defects liability period provided for in Art. 19.2
(Retention Money). Such Retention Money shall be paid against presentation of a defects liability security
issued by a bank approved by the General Contractor and corresponding to the form set forth in Art. 27; it
must be possible for the General Contractor to draw on the security upon first written demand, without
examination of the legal grounds underlying the claim. Such security shall be issued in the amount of the
respective Retention Money and shall be valid for a period ending 60 days after the scheduled end of the
defects liability period. If several defects liability periods have been agreed, the longest such defects liability
period shall be relevant. If the defects liability period is extended, the term of validity of the security shall be
extended accordingly.
10.7 In case of any discrepancy between the invoiced amount and the amount paid, the General Contractor shall
inform the Subcontractor of the reasons for its payment of a different amount upon payment, at the latest. If
individual items are still disputed on the due date of the final statement, the General Contractor may not
invoke this fact to retain the uncontested part of the payment.
10.8 The acceptance of the final payment on the basis of the final statement shall exclude any subsequent claims
for the contractually executed Works (except for claims to payment of the moneys retained from the monthly
statements and the Retention Money), unless a substantiated objection is submitted in writing within 30 days
of receipt of payment.
10.9 If the Subcontractor assigns any of its claims against the General Contractor under this contract, the General
Contractor is entitled to deduct 1% of the assigned amount from the payments.
10.10 The General Contractor is entitled to set off any payment claims of the Subcontractor which have fallen due
against any counterclaims which the General Contractor has against the Subcontractor and which have
fallen due (compensation). If the Subcontractor assigns any claims, the General Contractor is entitled to set
off payment claims of the party acquiring such claims - irrespective of the time at which such claims have
arisen - against counterclaims the General Contractor has against the Subcontractor.
10.11 If the Works of the Subcontractor are defective, the General Contractor is entitled to retain, in addition to the
moneys retained from the monthly statements, three times the costs of remedying such defect until such
defect has been remedied.
10.12 If the Employer claims that the Works of the Subcontractor are defective and, for this reason, retains
payments owing to the General Contractor, the General Contractor is entitled to retain the amount thus
retained by the Employer from payments to be made to the Subcontractor. Such right shall lapse if the
Subcontractor has furnished proof that its Works are free from defects.
Article 11 - Deadlines
11.1 Unless agreed otherwise, the Subcontractor shall commence work on the Site within the period set forth in
the Appendix, which shall be calculated from the time of receiving a written or oral request of the General
Contractor, and shall execute the Works in such a way that the contractual deadlines can be met. The
Subcontractor shall execute its Works in accordance with the requirements of the construction progress, if
necessary, in sections. The exact individual deadlines shall be coordinated weekly between the General
Contractor and the Subcontractor. The site managers of the Subcontractor and of the General Contractor are
entitled to agree on such deadlines in the name of the Subcontractor and the General Contractor,
respectively; and they shall do so in writing. Deadlines thus agreed shall be binding. The Subcontractor shall
be bound by the instructions of the General Contractor's site manager. Any disassembly and re-assembly or
postponement of deadlines necessitated by insufficient coordination of deadlines between the Subcontractor
and other subcontractors of the General Contractor or the General Contractor's site manager shall be at the
expense of the Subcontractor.
11.2 If commencement of the execution of any part of the Works is delayed, or if delays or interruptions occur
during execution of the Works, and if it consequently appears that the Time for Completion cannot be met,
the Subcontractor shall take all reasonable efforts to avoid the Time for Completion being exceeded
(default).
11.3 The Works assigned to the Subcontractor shall be completed by the agreed deadlines. The Subcontractor is
not entitled to demand a postponement of the deadlines on the grounds of having been obstructed in its
work, which cannot be excluded, nor on the grounds of adverse climatic conditions.
11.4 If it appears inevitable that the contractual deadlines will be exceeded, the Subcontractor is entitled to a
reasonable extension of the deadlines for its Works and a corresponding remuneration only if the reason for
exceeding the deadlines is attributable to circumstances for which the General Contractor is responsible.
Such right shall exist especially if the General Contractor has demanded the execution of additional work
pursuant to Art. 5.10 or an interruption of the Works, thus causing the deadlines to be exceeded.
11.5 The Subcontractor is only entitled to an extension of the contractual deadlines if the Subcontractor has
promptly notified the General Contractor, if the Subcontractor is not responsible for the obstruction, and if it is
not in the Subcontractor's power, or if the Subcontractor cannot reasonably be expected, to avert or reduce
the obstruction.
11.6 When determining an extension of time, the extent and duration of obstructions shall be taken into account;
any extensions thus determined shall be set forth in writing. If on account of such extension of time, the
performance of the Works falls into a time period which is more favorable or less favorable thereto, this shall
be taken into account when calculating the extension of time and if and when agreeing on cost increases or
decreases. If time is extended, any consequences of default shall not take effect unless the extended time is
also exceeded.
11.7 As soon as the obstruction is removed, the Subcontractor shall on its own initiative resume the Works
without delay and shall notify the General Contractor thereof as soon as practicable. If, however, the
conditions that caused the obstruction are within the control of the General Contractor, the latter shall notify
the Subcontractor immediately on removal of the obstruction.
Article 12 - Rights of the General Contractor
12.1 If the Subcontractor executes its Works in such a way that the General Contractor has serious doubts that
the Time for Completion or the deadlines for the work to be performed by other subcontractors subsequently
to the Works of the Subcontractor can be met (in particular, if the Subcontractor employs insufficient staff or
uses insufficient facilities, scaffolding, materials or components), the General Contractor may demand that
the Subcontractor remedy the situation and/or present a detailed Works Schedule aimed at expediting work
(Schedule of Acceleration of Work) which is suited to dissipate the General Contractor's doubts.
12.2 If any work or supplies of the Subcontractor are defective, the Subcontractor shall, at its own expense,
replace them with work or supplies which are free from defects. If the Subcontractor is responsible for the
defect, it shall be responsible for any damage thus sustained. If the Subcontractor fails to meet its obligation
to remedy the defect, the General Contractor may set a reasonable deadline by which the defect must be
remedied.
12.3 If the Subcontractor fails to comply with the General Contractor's request pursuant to Art. 12.1, or if the
Subcontractor fails to meet the deadline fixed by the General Contractor pursuant to Art. 12.2, the General
Contractor shall have the right to
a) employ additional staff and/or other subcontractors who shall assist the Subcontractor at the expense
of the latter, or
b) terminate the contract in full or in part pursuant to Art. 15.1 and have the Works for which it has
terminated the contract performed by a third party at the expense of the Subcontractor,
provided that in its request pursuant to Art. 12.1 or when fixing a deadline pursuant to Art. 12.2 the General
Contractor has advised the Subcontractor that it would do so in the event that the Subcontractor should fail
to comply with the request or to meet the deadline.
12.4 When taking the measures set forth in Art. 12.2, the General Contractor is not obligated to obtain tenders
from competitors. Any and all costs incurred by the General Contractor in connection with any of the
measures taken by it pursuant to Art. 12.1 shall be borne by the Subcontractor and shall be deducted from
the next payment due to it.
12.5 With regard to parts of the Works not yet commenced, the General Contractor shall have the rights set forth
in Articles 12.3 a) and 12.3 b) if the General Contractor has reasonable grounds to assume that the
Subcontractor will not be able to duly and properly execute the parts of the Works not yet commenced.
Article 13 - Liquidated Damages
13.1 Default is deemed to exist if the Works are not executed at the time provided for in the contract, at the right
place or in the manner agreed upon.
13.2 If the Subcontractor exceeds one or more of the deadlines agreed upon, and designated as binding, in the
Contract Agreement, the Appendix or pursuant to Art. 11.1 and if the Subcontractor is unable to furnish proof
that it is not responsible for such default, the General Contractor is entitled to liquidated damages in the
amount and up to the upper limit determined in the Appendix. If the liquidated damages are expressed as a
percentage, their amount shall be calculated from the Contract Price, including all additional work contracted
for. The General Contractor is not required to furnish proof of any damage suffered.
13.3 Liquidated damages may be claimed by the General Contractor at any time, shall be due immediately upon
default and shall be retained from the next payment due to the Subcontractor. Liquidated damages cannot
be reduced by court decision. The General Contractor reserves the right to claim damages from the
Subcontractor in excess of such liquidated damages.
Article 14 - Insurance
14.1 The Subcontractor shall take out a third-party liability insurance prior to the commencement of work on the
Site, shall maintain such insurance for the term of the contract and shall furnish proof thereof to the General
Contractor upon request. The sum insured and the insurance cover shall correspond to the custom of the
trade and, unless provided otherwise, shall amount to at least EUR 200,000.00 for damage to property and
personal injury.
14.2 If the General Contractor has taken out a construction insurance (without third-party liability) in the form of a
Contractor's All Risk insurance, and if the deductibles provided under such insurance are specified in the
Appendix, the Subcontractor is deemed to be coinsured and included in the insurance cover. A copy of the
policy can be requested from the General Contractor. If the Subcontractor has been included in an insurance
taken out by the General Contractor, the liability of the Subcontractor under this contract is not limited
thereby. The Subcontractor shall judge for itself whether the insurance taken out by the General Contractor
is sufficient for the Subcontractor or whether the Subcontractor requires additional insurance of its own.
14.3 In the event of a damage covered by the CAR insurance policy, the Subcontractor shall give notice of such
damage in writing without delay and shall furnish all information and data necessary for reporting the
damage to the insurance company. In the event of theft, a police report shall be required. The settlement of
the claim with the insurance company shall be handled by the General Contractor.
14.4 The claims payment actually received by the General Contractor in respect of a damage which occurred to
Works of the Subcontractor shall be paid to the Subcontractor if the Subcontractor has remedied such
damage at its own expense and furnishes proof thereof; the deductible withheld by the insurance company
shall be borne by the Subcontractor.
Article 15 - Termination of Contract
15.1 The General Contractor shall have the right, apart from the instances otherwise specified, to terminate the
contract
15.1.1 if composition proceedings have been instituted against the Subcontractor and if the General
Contractor, on account of the circumstances at hand, can be expected to suffer substantial
disadvantages if the contract remains in effect;
15.1.2 if insolvency proceedings have been instituted against the Subcontractor or if a request for the
institution of such proceedings has been dismissed for lack of sufficient assets;
15.1.3 if there are circumstances which obviously make the proper execution of the order impossible;
15.1.4 if the Subcontractor has committed acts with fraudulent intent in order to cause damage to the
General Contractor, in particular if the Subcontractor has entered into arrangements with other
entrepreneurs which are disadvantageous to the General Contractor, or are contrary to public
policy, or violate the principles of fair competition;
15.1.5 if the Employer or the General Contractor has terminated the main contract;
15.1.6 if the Subcontractor has failed to deliver the performance security despite the granting of a grace
period of 14 days.
If the contract is terminated for any of the reasons specified in Articles 15.1.1 through 15.1.5, no grace period
need be granted. The termination of the contract may concern all or only part of the Subcontractor's Works.
15.2 The Subcontractor shall have the right, apart from the instances otherwise specified, to declare its
termination of the contract
15.2.1 if composition proceedings have been instituted against the General Contractor and if the
Subcontractor, on account of the circumstances at hand, can be expected to suffer substantial
disadvantages if the contract remains in effect;
15.2.2 if insolvency proceedings have been instituted against the General Contractor or if a request for
the institution of such proceedings has been dismissed for lack of sufficient assets;
15.2.3 if there are other circumstances which obviously make the proper execution of the contract
impossible, to the extent that the General Contractor is responsible for such circumstances;
15.2.4 if the General Contractor has committed acts with fraudulent intent in order to cause damage to
the Subcontractor; in such case, the right of termination shall expire 30 days after the date at
which the Subcontractor has learned of the facts justifying the termination of contract.
Except in the case provided for in Art. 15.2.2, the contract can only be terminated if a grace period of
28 days, to be granted in writing, has expired ineffectively. In the case provided for in Art. 15.2.2, the
Subcontractor may discontinue the Works immediately, but the Subcontractor may terminate the contract
only upon the expiration of a period of 28 days, unless the Employer informs the Subcontractor in writing
beforehand that it will not make use of its right set forth in Art. 23.5.
15.3 Notice of termination of the contract shall be given in writing.
15.4 If a contracting party is at fault in the termination of the contract, it shall indemnify the other party for all
disadvantages thus incurred.
15.5 Notwithstanding the other contractual provisions, the following shall apply in the event of the termination:
15.5.1 Parts of Works already taken over shall be accounted for and compensated in accordance with the
contract. Any payment period pursuant to Art. 10 which has already commenced shall continue to
run; any period which has not yet commenced will be deemed to commence on the day of the
termination of contract.
15.5.2 Works which have not yet been taken over but have already been properly executed shall be taken
over, invoiced and compensated. In such case, the periods agreed pursuant to Art. 9 shall be
applicable.
15.5.3 At the General Contractor's request, the Subcontractor shall leave any scaffolding, equipment,
machines and other facilities existing on the Site as well as any construction materials supplied and
the like on the Site, against reasonable compensation, for the purposes of continuing the Works.
Alternatively, at the request General Contractor's request, the Subcontractor shall clear the Site
without delay; if the Subcontractor fails to comply with such request, the General Contractor is
entitled to clear the site or have the site cleared by third parties at the expense of the
Subcontractor.
15.5.4 If the circumstances which have caused the termination by the General Contractor are within the
control of the Subcontractor, the Subcontractor is obligated to refund to the General Contractor
such extra costs as are incurred by the General Contractor completing the Works.
Article 16 - Tests
16.1 The Subcontractor shall carry out the tests as agreed or as required under the laws of the country where the
Works are to be executed, in due time according to the progress of the Works, but in any case before taking
over of the Works by the General Contractor. The General Contractor shall be given written notice of such
tests at least 48 hours in advance. The General Contractor is entitled at any time to request from the
Subcontractor proof, tests, testing of materials, auxiliary materials and samples, etc., at the expense of the
Subcontractor, and is also entitled to carry out inspections and tests in the production facilities of the
Subcontractor and its subcontractors/suppliers as well as on the Site, at the expense of the Subcontractor.
16.2 Any tests which the General Contractor itself has ordered to be carried out shall not release the
Subcontractor from the obligation pursuant to Art. 16.1.
16.3 If it is impossible to deduce a specific date for a test from this contract or from the type of the work involved,
the date shall be determined by the General Contractor. If a scheduled test is only possible at a certain stage
of the work, the Subcontractor shall inform the General Contractor in good time before reaching this stage so
that the test can be made in due course.
16.4 The result of the tests shall be recorded in writing and communicated to the General Contractor. In addition
to the tests, the Subcontractor shall carry out a trial run of all plants and facilities assembled or installed by it.
At the time of their taking over by the Employer, all equipment and plants shall have new filters.
16.5 The costs of tests, of any proof to be furnished, of certification, etc., including the cost of labor, materials,
equipment, and the like as well as any charges and fees, etc., incurred in connection therewith are deemed
to be covered by the prices agreed upon.
16.6 Should a contracting party doubt the results of a test, it shall have the right to request a further test by a
testing institution authorized by the government of the country where the Works are to be executed or by an
inspector to be selected by mutual agreement. The costs incurred thereby shall be borne by the party
requesting the additional test, unless the test has yielded a result that is to the disadvantage of the other
contracting party.
16.7 Any parts of the Works that have been tested and found unsuitable shall be replaced by the Subcontractor
without delay by suitable parts, without the Subcontractor being entitled to reimbursement of the costs.
Article 17 - Taking Over of the Works
17.1 If the Subcontractor has completed its entire Works, the Subcontractor may request the taking over by the
General Contractor. Notwithstanding the obligation of the Subcontractor to complete the Works at an earlier
time, and notwithstanding the right of the Subcontractor to receive payment at an earlier time, the taking over
shall not be effected before all of the Works of the Subcontractor have been taken over by the Employer.
The date scheduled for the taking over by the Employer is set forth in the Appendix.
17.2 In the cases set forth below, the Works of the Subcontractor shall be taken over prior to the taking over by
the Employer, if so requested by the Subcontractor in writing:
17.2.1 if the taking over of the Works of the Subcontractor by the Employer has been delayed as
compared to the scheduled date by more than 90 days and provided that not a single reason for
such delay is even partially within the control of the Subcontractor;
17.2.2 if the time between the actual completion of the Works of the Subcontractor and the date
scheduled for the taking over of the Works of the Subcontractor by the Employer exceeds 90 days
and the Subcontractor cannot be reasonably expected to accept this time span.
In the case provided for in Art. 17.2.1, the taking over shall be effected 90 days after the time scheduled for
the taking over of the Works of the Subcontractor by the Employer, in the case provided for in Art. 17.2.2, the
taking over shall be effected immediately upon completion of all Works of the Subcontractor.
17.3 If the General Contractor takes over the Works of the Subcontractor before the Works of the Subcontractor
have been taken over by the Employer, such taking over shall be subject to the condition that the General
Contractor is entitled to give notice of any kind of defects only during the defects liability period, even if such
defects were identifiable or were identified upon taking over.
17.4 Upon the taking over of the Works of the Subcontractor by the General Contractor, the risk shall pass to the
General Contractor and the defects liability shall commence.
17.5 The taking over shall be effected only by means of an express written communication issued by the General
Contractor (Taking-over Certificate). Within 14 days of the Subcontractor requesting the taking over, the
General Contractor shall effect the taking over or, if applicable, shall notify the Subcontractor of its reasons
for refusing the taking over. The taking over can also be effected in the form of a written record signed by the
General Contractor and the Subcontractor. Such record may contain any defects of the Works complained
about and a deadline granted to the Subcontractor for their remedying. The taking over cannot be assumed
or implied to have occurred as a consequence of the use or commissioning of the Works, their being taken
over by the authorities or by the Employer or as a consequence of a notice by the Subcontractor that the
Works have been completed or of such notice being submitted to the Employer by the General Contractor or
in any other way. The taking over of only part of the Works is not permitted unless it has been explicitly
agreed.
17.6 The Taking-over Certificate issued by the General Contractor shall be delivered to the Subcontractor without
delay. The Subcontractor shall be granted 14 days to comment on the contents of the Taking-over
Certificate. In the absence of any such comments, the contents of the Taking-over Certificate will be deemed
accepted by the Subcontractor.
17.7 Taking over the Works may be refused if the Works show substantial defects; the lack of instructions for use,
operating or maintenance instructions, technical descriptions or documents furnishing proof of specific
properties of the machines, plants or materials supplied or other documentation to be supplied in accordance
with the contract will in any event be deemed a substantial defect.
17.8 If the General Contractor refuses to take over the Works, it shall forthwith inform the Subcontractor thereof in
writing, specifying the reasons.
17.9 Any interim payments made by the General Contractor cannot be construed as the General Contractor
having taken over the invoiced parts of Works.
Article 18 - Risk and Liability
18.1 The Subcontractor shall be fully liable for any damage whatsoever, including any damage arising under
product liability claims, caused to the General Contractor, the Employer or third parties by the Subcontractor
or any person employed by the Subcontractor in the performance of its obligations ("Erfllungsgehilfe";
sec. 1313 a of the Austrian General Civil Code ["ABGB"]). The Subcontractor shall also be liable for any fault
of its suppliers as well as of any person who is on the site with the Subcontractor's permission. In particular,
the Subcontractor shall also be liable for all disadvantages arising from delays caused by circumstances
which lie within the control of the Subcontractor or any person employed by the Subcontractor in the
performance of its obligations or which are due to the quality of the equipment or materials employed by the
Subcontractor or are otherwise related to its Works, and the Subcontractor shall indemnify and hold the
General Contractor harmless from and against any loss or damage sustained in this respect. This
indemnification obligation shall also apply if damage claims against the Subcontractor are governed by a law
different from that applicable to the contractual relationship between the General Contractor and the
Subcontractor.
18.2 Until taking over, the Subcontractor shall bear the risk pertaining to its Works, including without limitation the
risk of destruction (loss), damage or theft. This provision shall also apply to materials, components or other
goods supplied to the Subcontractor by the General Contractor or other subcontractors in accordance with
the contract. The Subcontractor's liability shall not be limited by the possible employment of a paid guard.
18.3 Any damage incurred shall immediately be reported to the General Contractor, and the scope of such
damage shall be determined jointly without delay.
18.4 If any third party suffers damage by the unauthorized access or damage to adjoining property, by the
unauthorized withdrawal or storage of materials or other objects outside the areas which have been
designated for such purpose by the General Contractor, or as a consequence of the arbitrary blockage of
roads or streets, the Subcontractor shall be liable to the third party as stipulated by law. If claims are raised
by a third party against the General Contractor in this respect, the Subcontractor shall indemnify and hold the
General Contractor harmless from and against any claims asserted by such third party.
18.5 The Subcontractor shall be liable for any infringement of (industrial) property rights of third parties in
connection with the Works performed by it and shall indemnify and hold the General Contractor harmless
from and against any claims raised in this respect unless it has explicitly warned the General Contractor of
such infringement of a property right.
Article 19 - Defects Liability
19.1 The Subcontractor warrants that at the time of taking over, its Works have the characteristics that are
expressly stipulated in the contract and are usually expected from Works of this type, and that they are in
conformity with the state of the art. In case of work to be executed according to a sample, the Subcontractor
warrants that the characteristics of the sample will be complied with. Such warranty shall cover all defects
existing at the time the risk passes pursuant to Art. 17.4. The warranty of the Subcontractor shall not be
limited by the site supervision carried out by the General Contractor.
19.2 The defects liability period shall commence upon taking over by the General Contractor. Such defects liability
period shall exceed the warranty period of the General Contractor vis--vis the Employer, which is specified
in the Appendix, by 60 days. The General Contractor may enforce claims for defects of which it has given
notice within the defects liability period by filing suit within three months after the defects liability period has
expired.
19.3 If the Works of the Subcontractor have been taken over by the General Contractor before the Works of the
Subcontractor have been taken over by the Employer, the defects liability period shall be extended by the
period which lies between the taking over by the General Contractor and the date scheduled for the taking
over of all Works of the Subcontractor by the Employer. Furthermore, the defects liability period shall be
extended by the period by which the taking over of all Works of the Subcontractor by the Employer has been
delayed; if none of the reasons for such delay is even partially within the control of the Subcontractor, such
period shall be limited to a duration which can be reasonably expected from the Subcontractor, but which
shall not be less than 120 days.
19.4 If defects are due to a special instruction of the General Contractor, the construction documents supplied by
the General Contractor, the materials supplied by the General Contractor, or work previously carried out by
other contractors of the General Contractor, the Subcontractor shall be released from any warranty
obligation regarding such defects if the Subcontractor has informed the General Contractor in writing within
the meaning of Articles 1.2, 5.5 and 5.6, and if the General Contractor has not taken into account the
objections raised.
19.5 If defects are discovered only after taking over, the General Contractor shall notify the Subcontractor thereof
in writing as soon as they become apparent, but in any case within the warranty period (notice of defect). If
notice of defect is given in writing within the warranty period, such defects will be deemed to have existed at
the time of the taking over.
19.6 Substantial defects are defects which prevent the stipulated use of the Works and/or cause the Works not to
meet the expressly promised characteristics.
19.7 In the case of a substantial defect that cannot be remedied, the General Contractor shall have the right to
demand the cancellation of the contract (termination of the contract). In such a case, the original condition
shall be restored in every respect. Should the restoration of the original condition be technically impossible or
economically unreasonable, the General Contractor may only demand that the consideration payable by it be
reduced, but not below the value that the Works have for the General Contractor. Defects that can only be
remedied at disproportionately high costs shall also be deemed defects that cannot be remedied.
19.8 In the case of a substantial defect that can be remedied, the Subcontractor shall remedy such defect at its
own expense within a reasonable time specified by the General Contractor. After expiration of that time limit,
the General Contractor may remedy the defect at the expense of the Subcontractor either directly or through
third parties. If the remedying of a defect is urgently required to prevent the General Contractor from
suffering a substantial disadvantage, and if the Subcontractor cannot immediately remedy such defect, the
General Contractor shall have the right to immediately remedy the defect either directly or through third
parties at the expense of the Subcontractor. The Subcontractor shall be notified thereof in writing without
delay.
19.9 In the case of a minor defect that cannot be remedied, the General Contractor may request a reasonable
reduction of the consideration payable by it. Defects that can only be remedied at disproportionately high
costs shall also be deemed defects that cannot be remedied.
19.10 In the case of a minor defect that can be remedied, the provisions of Art. 19.8 shall be applied.
19.11 At the dates agreed upon, the General Contractor shall grant the Subcontractor access to the object covered
by warranty in order to inspect or to remedy the defects.
19.12 On the day a defect is remedied, the warranty period shall start anew for such parts of the Subcontractor's
Works which replace or are connected with the defective Works. However, if such a defect also prevents the
contractual use of other parts, or of the Works as a whole, the warranty periods for such other parts, or for
the Works as a whole, shall start anew.
19.13 If the Subcontractor's Works consist, in full or in part, of supplies made to places other than the Site, the
General Contractor may require the Subcontractor to remedy the defects covered by warranty on the Site if
the remedying of such defects at the place of performance of the supplies is not possible at all or is possible
only at disproportionately high costs.
19.14 The Subcontractor shall reimburse the General Contractor for any and all costs incurred in the identification
of a defect (costs of experts, etc.) or arising to the General Contractor in remedying the defect, such
reimbursement to be made within fourteen days of issuance of the respective invoice.
19.15 If, in the event of a warranty claim, the General Contractor is entitled to several remedies, the General
Contractor shall be free to choose either one of the remedies. If the General Contractor chooses to have the
defect cured by the Subcontractor, the way of curing the defect shall be subject to the prior approval of the
General Contractor.
Article 20 - Language
20.1 All correspondence to be exchanged between the General Contractor and the Subcontractor under this
contract and all documents to be drawn up shall be in the language of correspondence specified in the
Appendix.
20.2 All documents and drawings to be submitted to the authorities of the country where the Works are to be
executed or to the Employer shall be drawn up in or translated into the language (or several languages)
specified in the Appendix; if several languages have been specified, drawings shall be marked in several
languages.
Article 21 - Correspondence
21.1 Correspondence relating to particulars of the performance of the Works of the Subcontractor shall be
addressed to the General Contractor's site manager; the General Contractor shall inform the Subcontractor
of the address of its site manager prior to the commencement of the work, unless already contained in the
Appendix.
21.2 All other correspondence of the Subcontractor with the General Contractor under this contract shall be
addressed to the registered office of the General Contractor, unless the General Contractor has notified a
different address to the Subcontractor in writing.
Article 22 - Transport and Customs Clearance
The Subcontractor shall, at its own responsibility and at its own cost and risk, transport all materials
(equipment and devices) required for the performance of its Works to the Site and take out an adequate
transport insurance. The Subcontractor's responsibility shall include, without limitation, handling all export-
related matters in the country of origin, organizing the transit through third countries and the import into the
country where the Works are to be executed as well as the re-export of temporary imports and the collateral
required in this connection. All costs incurred in this connection, including all customs duties, taxes, charges
and supplements thereto as well as all handling charges and costs of collateral, shall be borne by the
Subcontractor.
Article 23 - Miscellaneous
23.1 If the General Contractor is a joint venture, such joint venture shall be represented by the Technical
Manager(s) of the joint venture as regards technical issues and issues concerning the performance of the
Subcontractor's Works. As regards commercial issues, the joint venture shall be represented by the
Commercial Manager(s).
23.2 If the Subcontractor is a joint venture or a consortium, all members of the joint venture or consortium shall be
jointly and severally liable vis--vis the General Contractor. The General Contractor may meet its financial
obligations by making payment to any member of the joint venture or consortium; in case of doubt, either
member of the joint venture or consortium shall have the right to represent the joint venture or consortium.
23.3 If the Subcontractor fails to meet its obligation to extend the term or increase the amount of a security
(Articles 5.2, 10.1 and 10.6), the General Contractor is entitled to draw on such security.
23.4 In case of disputes between the General Contractor and the Subcontractor, the Subcontractor shall not have
the right to suspend or discontinue performance of its contractual obligations or to retain any plans, drawings
or other documentation concerning the construction project.
23.5 The Subcontractor agrees that in the event of the General Contractor becoming insolvent or the contract
between the Employer and the General Contractor being terminated, the Employer may enter into this
contract instead of the General Contractor by giving the Subcontractor unilateral written notice thereof. If the
Employer exercises such right, the Subcontractor cannot transfer to the Employer any objection or complaint
it may have to or against the General Contractor and the Subcontractor shall have a claim to payment from
the Employer solely for work performed or supplies made after the Employer has entered into the contract.
Article 24 - Disputes
24.1 This contract shall be governed by the law of the country mentioned in the Appendix. Obligations of the
Subcontractor under such law shall only be restricted or limited if this is explicitly provided for in this contract.
24.2 If the Contract Agreement contains neither an arbitration clause nor a jurisdiction clause, the exclusive venue
for any action brought against the General Contractor shall be the court of law having subject matter
jurisdiction at the registered office of the General Contractor, whereas the exclusive venue for any action
brought against the Subcontractor shall be, at the General Contractor's option, the court of law having
subject matter jurisdiction at the registered office of the Subcontractor or at the registered office of the
General Contractor.
Article 25 - Text of the Performance Security (Art. 5.2)
To
... [General Contractor] ...
Subject: Guarantee No. ....... .........., ..........,

(place) (date)
Dear Sirs,
We have been informed that a performance security has to be submitted under the contract concluded between
you and ... [Subcontractor] ... in connection with the "..." construction project.
On behalf of the ... [Subcontractor] ... we herewith issue this irrevocable guarantee in the amount of ... [amount and
currency] ... in your favor. Under this guarantee, we undertake to pay to you, upon your first demand, without
examination of the legal grounds underlying your claim and waiving any objection or protest, any amount not
exceeding the above-mentioned amount, payment to be made within two business days. This guarantee may also
be drawn in the case of the ... [Subcontractor] ... becoming insolvent. This guarantee shall expire unless it is drawn
by you by registered letter, such letter being received in our offices on or before ... [date] ..., at the latest. After the
expiration of the term of validity the guarantee or, if the reasons for the issuance of the guarantee no longer apply,
before that date, this guarantee shall be returned to us as being invalid and obsolete.
It has been agreed that the amount payable by us need not be deposited with the court.
.......... Bank
Article 26 - Text of the Advance Payment Security (Art. 10.1)
To

(place) (date)
Dear Sirs,
We have been informed that under the contract concluded between you and ... [Subcontractor] ... in connection
with the "..." construction project a down payment will be disbursed against presentation of a bank guarantee in the
same amount.
.......... Bank
Article 27 - Text of the Defects Liability Security (Art. 10.6)
To

(place) (date)
Dear Sirs,
We have been informed that under the contract concluded between you and ... [Subcontractor] ... in connection
with the "..." construction project Retention Money will be retained by you which shall be released against
presentation of a bank guarantee.
.......... Bank

Fidic

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"GCC"

GENERAL CONDITIONS OF CONTRACT

Article 1 - Construction Documents ..................................................................................................... 1

Article 1 - Construction Documents

Article 2 - Working Places, Access Roads, Hook-up to Utilities

Article 3 - Cooperation on the Site

Article 9 - Invoicing (Monthly and Final Statements)

Article 12 - Rights of the General Contractor

Article 13 - Liquidated Damages

Article 15 - Termination of Contract

15.3 Notice of termination of the contract shall be given in writing.

Article 17 - Taking Over of the Works

Article 18 - Risk and Liability

Article 19 - Defects Liability

Article 22 - Transport and Customs Clearance

Article 25 - Text of the Performance Security (Art. 5.2)

Subject: Guarantee No. ....... .........., ..........,

Article 26 - Text of the Advance Payment Security (Art. 10.1)

Subject: Guarantee No. ....... .........., ..........,

Article 27 - Text of the Defects Liability Security (Art. 10.6)

Subject: Guarantee No. ....... .........., ..........,

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