Shadowing Practice: Complete Guide to the FIDIC Red Book 2017 | Construction Contract Explained - Learn English Speaking with Video
Creating lesson...
1
We are going to decode this Redbook.
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We've got the general conditions, the contract data, the special provisions, the whole stack.
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We want to understand the rules of engagement for these massive international projects.
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Because, let's be honest, I felt intimidated just opening the PDF.
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It looks like a phone book written by lawyers for other lawyers.
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It can be intimidating, I get it.
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But don't let the density fool you.
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At its heart, this document is a mechanism for fairness.
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Fairness.
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Yes.
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It's an operating system designed to prevent chaos on a job site.
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It defines who pays, who bills, who takes the risk, and what happens when, not if, but when things go wrong.
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And in construction, things always go wrong, don't they?
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Invariably.
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You are dealing with physics, geology, weather, and human beings.
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It is a recipe for unpredictability.
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So before we dive into the specific clauses, and we're going to cover everything from finding archaeological ruins to what happens
18
if the employer just gets bored and cancels the project.
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And yes, that is a thing.
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Let's set the stage.
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Why the red book?
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I know Eddie Ike has a whole rainbow of contracts.
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There's a yellow book, a silver book.
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Why are we focusing on red?
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Great question.
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So FEI stands for the International Federation of Consulting Engineers.
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They produce this whole suite of contracts and they color code them based on how the project is structured.
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The red book is the global standard for construction where the design is done by the employer.
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So the employer hires an architect or an engineer first, they do all the drawings, and then they hand them over.
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Exactly.
31
You, the employer, get your team to draw up the blueprints, calculate the loads, and specify all the materials.
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Then you hire a contractor to build exactly what is on those drawings.
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Okay, so in this model, understanding these clauses is all about how risk is shared between the employer, the one with the money, and the contractor, the one with the boots on the ground.
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Precisely.
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And the 2017 edition is really interesting because they have tried to clarify that balance and, crucially, to stop disputes before they burn the whole project down.
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Let's jump right into part one then.
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The ground rules.
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This is Clause 1, General Provisions.
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Now, usually I might skip the definitions section in a contract because it feels like housekeeping.
40
A huge mistake.
41
But reading through this, I realized that the definitions are actually where the landmines are buried.
42
You absolutely cannot skim Clause 1.
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This is where the language of the law is defined.
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If you don't know who the players are, you don't know the game you're playing.
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So let's meet the players.
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We have three main characters in this story.
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First, the employer.
48
Right.
49
The entity paying for the work.
50
But look closely at the definition in the text.
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It includes their legal successors.
52
I circled that.
53
Why is that specific phrase so important?
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Because these projects take years, sometimes decades.
55
Companies get bought, sold, or merged.
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If I sign a contract to build a power plant for company A and two years later, company A gets acquired by a massive global conglomerate,
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I need to know that the contract still holds.
58
I see.
59
The legal successor clause ensures that the new owner steps into the shoes of the old one.
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They can't just walk away and say, well, we didn't sign that.
61
That makes sense.
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It provides continuity.
63
Yeah.
64
OK, then we have the contractor.
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Defined in subclause 1.1.1.1.
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This is the person or company named in the letter of tender, accepted by the employer.
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They are the ones executing the work.
68
They are the ones taking on the physical risk.
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And the third wheel, the engineer.
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This one seems unique to the FIDA model.
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It is central to the Red Book.
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The engineer is appointed by the employer to administer the contract.
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This is a fascinating role because they wear two hats.
74
How so?
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On one hand, they are hired and paid by the employer, but on the other hand, the contract requires them to make fair determinations.
76
That sounds like a conflict of interest waiting to happen.
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I'm paying your salary, but I need you to decide against me if I'm wrong.
78
It is the source of endless arguments in the industry.
79
But under Clause 3 of the 2017 edition, the engineer's duty to act neutrally when making determinations is much more explicitly defined.
80
They aren't just a mailman for the employer.
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They are supposed to be the referee on the field.
82
Let's unpack the power of words here.
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Subclause 1.2 regarding interpretation.
84
It feels like high school grammar class, but with millions of dollars at stake.
85
It really is.
86
There is a massive difference between the words may and shall.
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It is the most important distinction in the entire document.
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If you take nothing else away from this deep dive, remember this.
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Under subclause 1.2, shall means an obligation.
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An order.
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A duty.
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If the contract says the contractor shall submit a report, there is no wiggle room.
93
You must do it.
94
If you fail to do it, you are in breach of contract. And may.
95
May implies a choice.
96
The party has the option to act or not act.
97
The engineer may inspect the works.
98
They can choose to do so or not.
99
It's permissive.
100
If you confuse shall and may when you are writing a letter or making a claim, You can accidentally waive your rights or accept a liability you never intended.
101
I also noticed the definition of written.
102
We live in a digital world now.
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In 2017, does written still mean a quill on parchment?
104
Or does a text message count?
105
Thankfully, they modernized this.
106
Written, or in writing, means handwritten, typewritten, printed, or, and this is key, electronically made.
107
Okay, but there's a catch.
108
There is a catch.
109
It must result in a permanent record.
110
So if I send a message on a secure app that auto-deletes after 24 hours?
111
Not written.
112
Doesn't count.
113
What about a quick Zoom call where the engineer tells me to change the design, but nobody records it?
114
That is definitely not written under the contract.
115
And this is a trap contractors fall into all the time.
116
I can imagine.
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The engineer says something on site, the contractor does it, and later there is a dispute.
118
If there is no permanent electronic record, like an archived email or a formal digital instruction, it didn't happen.
119
That is a huge takeaway.
120
if it isn't written it didn't happen now let's talk about
121
subclause 1.6 the contract agreement it says the parties shall sign
122
within 35 days after the contractor receives the letter of acceptance
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who pays for the stamp duties the employer the text is explicit there the costs of stamp duties
124
and similar charges imposed by law fall on the employer it's a small detail
125
but it shows you how specific the red book gets about who pays for what and then we hit Subclause 1.15, limitation of liability.
126
This seems like the safety net for the contractor.
127
It is.
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Generally, the total liability of the contractor to the employer is capped.
129
It's usually a sum stated in the contract data.
130
If it's not stated there, it defaults to the accepted contract amount.
131
So if I'm building a bridge for you for $10 million and I make a mistake that causes massive delays, you generally can't sue me for $50 million.
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Generally, that's the key word.
133
Okay, so what's the exception?
134
The exception is a big one.
135
This cap does not apply in cases of fraud, gross negligence, deliberate default, or reckless misconduct.
136
So if I'm just incompetent, my liability is capped.
137
But if I'm reckless?
138
If you decided to use cheap, substandard steel to save money and pocket the difference, that is fraud or reckless misconduct.
139
And then the cap is gone.
140
The safety net disappears.
141
You are liable for every penny of damage, even if it exceeds the contract price.
142
You can't contract your way out of fraud.
143
That makes perfect sense.
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Yeah.
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Okay, moving to part two, the setup.
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This defines the duties of the two heavyweights, the employer and the contractor.
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Let's start with the employer in clause two.
148
What is their biggest responsibility, aside from paying the bills?
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Right, of access.
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Sub clause 2.1, it sounds incredibly simple.
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The employer must give the contractor right of access to the site.
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You can't build a building if the gates are locked.
153
Exactly.
154
But this happens right all the time.
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Maybe the employer hasn't finished purchasing the land.
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Or there are protesters.
157
Maybe there are squatters living on the site.
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Maybe there's a political protest blocking the road.
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And if the contractor is sitting there with a fleet of bulldozers and 500 workers and they can't get in, it triggers claims for delay.
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The meter starts running.
161
Immediately.
162
Immediately.
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If the employer doesn't provide access by the date in the contract data, the employer is going to pay for that downtime.
164
And idle construction equipment is incredibly expensive.
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I bet.
166
What about permits?
167
Who is responsible for getting the legal permission to build?
168
Subclause 1.13 covers compliance with laws.
169
It's a split responsibility, which is interesting.
170
Generally, the employer obtains the planning permissions, the right to have a building on that land.
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But the contractor has to obtain the permits required to execute the works.
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Things like road closure permits, crane operation licenses, or labor visas.
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Now let's flip the coin to Clause 4, the contractor's burden.
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This section feels heavy.
175
It is.
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Sub Clause 4.1 says the contractor is responsible for the adequacy, stability, and safety of all site operations.
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That covers a lot of ground.
178
It covers everything.
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If a scaffold falls, it's the contractor.
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If a trench collapses, it's the contractor.
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But the real sleeper clause here, the one that keeps project managers awake at night, is subclause 4.1, site data.
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I marked this one.
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It says the contractor is deemed to have satisfied themselves regarding the form and nature of the site.
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Deemed to have satisfied themselves.
185
That is powerful legal speak.
186
It means you are legally considered to have checked everything, whether you actually did or not.
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So you're supposed to have checked the ground conditions, the weather.
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Before submitting a tender, the contractor is supposed to check the hydrological conditions, climatic conditions, the subsurface conditions, basically everything.
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So let's play this out.
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I'm a contractor.
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I bid on a tunnel project.
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I start digging and I hit a massive wall of hard rock that wasn't shown on the initial drawings.
193
Right.
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It's going to cost me 10 times as much to drill through it.
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Can I go to the employer and ask for more money?
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Under the Red Book, that is a very, very difficult argument to make.
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Why?
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The employer will point to Clause 4.10 and say, You were deemed to have satisfied yourself about the geology.
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You should have drilled more test boreholes before you bid.
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But bidding periods are short.
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Sometimes you only have a month to put a price together.
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You can't drill holes everywhere.
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And that is the risk.
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This clause represents a massive transfer of risk from the employer to the contractor.
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So you have to price that risk in.
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You have to.
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Unless the condition was unforeseeable, and FV Dyke has a very strict definition of what unforeseeable means, the cost of that rock belongs to you.
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You can't come back later and say, I didn't know the ground was soft or I didn't know the water table was this high.
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That puts a huge premium on doing your homework.
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It effectively punishes optimism.
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If you assume the best case scenario for the soil, you are gambling.
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What about getting to the site?
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Subclause 4.15 talks about access routes.
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This is another risk transfer.
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The contractor is responsible for maintaining their access routes.
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And here is a specific detail from the text that I find fascinating.
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Go on.
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The contractor must prevent roads or bridges from being damaged by their traffic.
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So if I drive a 50-ton dump truck over a sleepy village bridge to get to the site, and the bridge collapses...
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You just bought a bridge.
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Or at least you are paying to fix it.
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The contract says you must use appropriate vehicles and routes.
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You can't just destroy the local infrastructure in the name of progress.
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The environment also gets a mention in Clause 4.1K.
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Yes, protection of the environment.
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In the 2017 edition, this is much stricter.
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It is an explicit requirement to limit emissions, surface discharges, and effluent.
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So no more just pumping wastewater into a river.
229
You can't just pump your muddy construction water into the local trout stream.
230
If you do, you are in breach of contract, not just environmental law.
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And subclause 4.19 covers temporary utilities.
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I assume the contractor can't just plug an extension cord into the employer's office.
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Correct.
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The contractor is responsible for their own power, water, and services, unless the contract states otherwise.
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They usually have to bring in big diesel generators.
236
Okay.
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If they do use the employer's utilities, the text says the employer is entitled to payment for it.
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Moving on to part three, the human element.
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Construction isn't just concrete, it's people.
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Clause 6 deals with staff and labor.
241
This section is quite fascinating because it deals with the reality of managing a workforce, often in a foreign country.
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Clause 6.3 is straightforward.
243
The contractor handles recruitment, payment, and feeding of their staff.
244
But Clause 6.5, working hours, caught my eye.
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It says no work on locally recognized days of rest.
246
Right.
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You have to respect the local culture.
248
If you are building in the Middle East, Friday might be the day of rest.
249
In Europe or the Americas, it's usually Sunday.
250
You don't work on those days unless the engineer consents.
251
Oh, reason or, isn't there?
252
Or, and this is the dramatic part, if it's an emergency to save life or property.
253
I see.
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If a retaining wall is failing and threaten a village, you work on Sunday.
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The contract recognizes that safety trumps the calendar.
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There's also Clause 6.11, Disorderly Conduct.
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I call this the Bouncer Clause.
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The Bouncer Clause.
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Yeah.
260
The contractor must prevent disorderly conduct among their staff.
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But more importantly, it gives the engineer power.
262
If a worker is acting dangerously, or they are drunk, or they are starting fights, the engineer can effectively demand their removal from the site.
263
And the contractor has to listen.
264
Yes.
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They have to remove that person and replace them, usually at their own cost.
266
It ensures that the engineer has some control over safety and discipline, even though they aren't the direct employer of the workers.
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Clause 6.12 mentions key personnel.
268
This feels like a protection against a bait and switch.
269
That is exactly what it is.
270
When contractors bid for big jobs, they often put their A-team in the proposal.
271
Sure, you want to show off your best people.
272
They say, look, we have Jane Smith, the world's best bridge engineer, and she will run this project.
273
The employer hires them based on Jane.
274
And then, once the contract is signed, Jane disappears to another job.
275
Exactly.
276
Clause 6.12 prevents that.
277
It says the key personnel named in the tender must be available.
278
You can't swap Jane out for a junior engineer without a very good reason and the engineer's consent.
279
So you have to deliver the team you promised.
280
You do.
281
Okay, let's get to the actual building part, part four, the work itself.
282
Clause seven is quality control.
283
How do we ensure the concrete is actually concrete?
284
This is where the rubber meets the road.
285
Subclause 7.1 dictates the manner of execution.
286
Workmanship must be of the quality specified.
287
But how do we know it is?
288
That's subclause 7.3 and 7.4, inspections and testing.
289
The employer's personnel are entitled to examine, inspect, measure, and test materials.
290
And this applies not just on the site, but often at the place of manufacture.
291
So the employer can send someone to the steel mill in another country to check the beams before they even ship.
292
Yes.
293
And if they fail the test, subclause 7.5, defects and rejection.
294
If the work is defective, the engineer can reject it.
295
And the contractor has to fix it.
296
They have to fix it or replace it at their own cost.
297
There is an interesting point in subclass 7.7 about ownership.
298
It says planted materials become the property of the employer when paid for.
299
Why is that so specific?
300
This surprises people, but it's a crucial protection against bankruptcy.
301
Imagine the employer pays $5 million for a set of custom turbines.
302
Okay.
303
They are sitting in a warehouse in Germany waiting to be shipped suddenly the contractor goes bankrupt
304
if the contractor owns them the creditor sees the turbines exactly
305
but this class says no the employer paid for them they
306
belong to the employer it allows the employer to go
307
and claim their property even
308
if it hasn't arrived on site yet that's clever it separates the materials from the contractors financial risks
309
that leads us to clause 8 time is money, we have a commencement date and a time for completion.
310
The clock is always ticking.
311
Clause 8.2 sets the deadline.
312
But construction is rarely perfectly on time.
313
So Clause 8.6 and 8.7 deal with what happens when things slow down.
314
Delays.
315
Right.
316
If the authorities cause a delay, say, the government is slow issuing a permit, the contractor might get an extension of time, or EOT.
317
So the deadline moves back.
318
The deadline moves back and they don't get penalized for it.
319
But what if the contractor's just slow?
320
Maybe they didn't hire enough trucks.
321
That is a different story.
322
That is subclause 8.7.
323
The engineer can instruct them to expedite the work.
324
Which means hurry up.
325
It means hurry up, add more shifts, work at night, bring in more equipment, and crucially, the contractor bears the cost of that acceleration.
326
If they don't speed up.
327
Subclause 8.8.
328
Delay damages.
329
This is the stick.
330
The penalty.
331
It's a penalty.
332
Usually a percentage of the contract price for every day they are late.
333
It can get very expensive very quickly.
334
It's designed to make it more profitable to finish on time than to be late.
335
What about stopping the work entirely?
336
Suspension.
337
That is Clause 8.9 through 8.2.
338
The engineer can suspend the work.
339
Maybe there's a safety issue or maybe the employer just needs to pause for funding reasons.
340
But the contractor gets paid during this time.
341
Usually, yes.
342
They get paid for the cost of protecting the works.
343
And Clause 8.11 says they get paid for plant and materials if they are marked as property of the employer.
344
But here is the really interesting strategic element.
345
Subclause 8.11, prolonged suspension.
346
How long is too long?
347
The contract says 84 days.
348
If the suspension lasts more than 84 days, the contractor can ask for permission to proceed.
349
And if the engineer says, no, keep waiting.
350
Then the contractor can treat the suspended part as an omission, basically removing it from the contract.
351
And if the whole project is suspended for that long?
352
They can terminate the contract.
353
It prevents the employer from keeping the contractor in limbo forever.
354
It's a game of chicken.
355
You can pause the game, but if you pause it too long, the other player quits.
356
Let's fast forward to the end of the job.
357
Part 5.
358
The finish line.
359
Clause 9 covers tests on completion.
360
You can't just hand over the keys and walk away.
361
You have to prove it works.
362
Right.
363
The contractor runs the tests, pressure testing pipes, load testing bridges, running the AC.
364
And if they fail?
365
Subclause 9.4.
366
They have to repeat the tests.
367
And if they fail repeatedly, I mean, what if they just can't get it right?
368
The employer has options.
369
They can order another repeat.
370
They can reject the whole section.
371
Or, interestingly, they can issue a taking over certificate anyway, but reduce the contract price.
372
Oh, that's interesting.
373
It's basically saying, I'll take this defective building because I need to use it, but I'm paying you less for it because it doesn't meet the spec.
374
Speaking of taking over, that's clause 10.
375
Subclause 10.1.
376
The engineer issues a taking over certificate when the work is completed.
377
This is a huge milestone.
378
It shifts responsibility for the care of the works from the contractor to the employer.
379
The risk transfers back.
380
Exactly.
381
The insurance requirements change.
382
The risk transfers back to the owner.
383
I found subclause 10.3 hilarious.
384
Interference with tests on completion.
385
Yes.
386
I call this the stop hitting yourself clause.
387
Why is that?
388
Sometimes an employer doesn't want to take over the building yet.
389
Maybe they don't have the final payment ready or they aren't ready to occupy, so they might try to delay the test.
390
It's like they locked the door to the electrical room or something.
391
Exactly.
392
It happens.
393
But Clause 10.3 says if the employer prevents the contractor from doing the test for more than 14 days, the tests are deemed to have been passed.
394
The contract assumes the building works because the employer wouldn't let them prove otherwise.
395
You can't pluck the exit and then complain the contractor hasn't left.
396
So once the taking over certificate is issued, is the contractor free?
397
Can they go home?
398
Not yet.
399
Clause 11 is defects liability.
400
In other industries, you'd call this the warranty period.
401
It's usually a year, sometimes two, called the defects notification period or DNP.
402
How does that work?
403
Under subclause 11.1, the contractor must finish any outstanding work and fix any defects that appear during this period.
404
If the roof leaks three months after the employer moves in, the contractor has to come back and fix it.
405
At their own cost.
406
If the defect is due to poor workmanship or materials, yes, at their own cost.
407
And finally, when is it really truly over?
408
Subclause 11.9, the performance certificate.
409
This is the true end.
410
It's the only document that constitutes formal acceptance of the works.
411
Once this is issued, the contractor's obligations are largely done.
412
Bonds get released.
413
The performance bond is released.
414
The marriage is officially dissolved.
415
Okay, let's talk about the thing everyone cares about most.
416
Money.
417
Part 6.
418
Financials and Risk.
419
Clause 14 is Contract, Price, and Payment.
420
Subclause 14.1 defines the contract price.
421
It's the agreed amount.
422
But you have to remember, in construction, the price is rarely static.
423
It's subject to adjustments, variations, claims, inflation.
424
And Clause 14.2 covers advance payments.
425
It's like a startup loan, right, to get things going.
426
Essentially.
427
For big projects, the contractor needs huge cash flow to mobilize, to buy equipment, set up the camp, ship materials.
428
The employer gives an advance payment.
429
Subclause 14.2 says this is an interest-free loan.
430
But nothing in life is free.
431
Correct.
432
Clause 14.2.3 details how it's repaid.
433
It is deducted from future payment certificates.
434
Usually a percentage is shaved off every time the contractor sends a bill until the loan is paid back.
435
Subclause 14.15 caught my eye.
436
Currencies of payment.
437
This is vital for international work.
438
Imagine you are building a dam in Vietnam.
439
Right.
440
You pay your local laborers in Vietnamese Dam, but you are buying turbines from Germany in Euros.
441
And you are buying steel from China in Renminbi.
442
That is an accounting nightmare.
443
And a risk.
444
If the exchange rate shifts wildly, you could lose your profit margin overnight.
445
Clause 14.15 specifies exactly which currency is used for what.
446
It locks in the risk profile so everyone knows where they stand.
447
Now let's look at the scary stuff.
448
Clause 17, care of works and indemnities.
449
This is about who gets sued when someone gets hurt.
450
Pretty much.
451
Subclause 17.4 is indemnities by contractor.
452
To put it simply, the contractor breaks it or hurts someone, they pay for it.
453
So they indemnify the employer.
454
The contractor indemnifies the employer against bodily injury, sickness, disease, or death of any person and damage to property caused by the contractor's operations.
455
So if a crane falls on a passerby.
456
The contractor deals with it.
457
They hold the employer harmless, they pay the lawyers in the settlement.
458
But there is a flip side, subclass 17.5.
459
Indemnities by employer.
460
Yes.
461
The employer indemnifies the contractor against things like the employer's negligence, or what they call the unavoidable result of the works.
462
What does unavoidable result mean?
463
Let's say the employer hires you to dig a canal.
464
You dig it exactly where they told you to, but digging that canal drains the water table and dries up a nearby farmer's well.
465
Ah, okay.
466
You didn't do anything wrong, you just executed the design.
467
The damage was unavoidable.
468
So the employer pays the farmer.
469
Correct.
470
The employer takes the risk for the consequences of their design.
471
And sub clause 17.6 mentions shared indemnities, acknowledging that sometimes it's a bit of both.
472
Exactly.
473
Life is rarely black and white.
474
Sometimes both parties share the blame, and the contract allows for that liability to be split.
475
We have arrived at the divorce section.
476
Clause 15 and 16.
477
Termination.
478
This is when the relationship breaks down completely.
479
Clause 15 is termination by employer.
480
It usually starts with subclause 15.1.
481
Notice to correct.
482
A warning shot.
483
It is a warning shot.
484
The engineer sends a formal notice saying, fix this specific failure or else.
485
And if they don't fix it?
486
Subclause 15.2 allows termination for contractors default.
487
This happens if the contractor abandons the work, goes bankrupt, or essentially demonstrates they have no intention of finishing.
488
The employer kicks them off the site and calls in the bonds.
489
Which is a disaster.
490
It is a financial disaster for the contractor.
491
But then there is subclause 15.5.
492
termination for employer's convenience.
493
This one seems wild to me.
494
It is a very powerful clause.
495
The employer can terminate the contract at any time for any reason.
496
They don't have to prove the contractor messed up.
497
So their funding could dry up or...
498
Maybe the funding dried up.
499
Maybe the government changed and they don't want the dam anymore.
500
That seems unfair.
501
Can they just fire the contractor and hire their cousin to finish the job cheaper?
502
No. That is the fear, right.
503
Right.
504
But subclause 15.5 has a specific poison pill to prevent predatory behavior.
505
What is it?
506
It says the employer cannot terminate for convenience in order to execute the work themselves
507
or to arrange for the works to be executed by another contractor.
508
So you can cancel the project, but you can't just swap the contractor.
509
Exactly.
510
You can kill the project, but you can't replace the player.
511
If you use this clause, the project stops.
512
And clause 16 lets the contractor fire the employer.
513
In a manner of speaking, if the employer doesn't pay, Clause 16.1 allows the contractor to suspend work.
514
If they still don't pay, Clause 16.2 allows the contractor to terminate.
515
No pay, no play.
516
Exactly.
517
No pay, no play.
518
And then they have to figure out the bill for what's been done.
519
Right.
520
Valuation.
521
The engineer has to figure out what the work done so far is actually worth, and the employer has to pay for it, plus usually some loss of profit for the contractor.
522
This brings us to Part 7.
523
When they disagree, disputes.
524
This seems to be where the 2017 Red Book really tries to innovate.
525
Clause 20 deals with claims, but Clause 21 is about the DAB.
526
The Dispute Avoidance Adjudication Board, or DAOB.
527
Note the word avoidance.
528
That is the big innovation in 2017.
529
In previous versions, it was just a dispute adjudication board, right?
530
The DAB.
531
Yes, the DAB.
532
It used to be a panel you called when you were already fighting.
533
It was reactionary.
534
Now, under Clause 21.1, the DAB is appointed at the start of the project.
535
So they're like marriage counselors who move in on the wedding day.
536
That is the perfect analogy, and they stay there.
537
Sub Clause 21.3 is titled, Avoidance of Disputes.
538
The parties can jointly ask the DAB for informal assistance.
539
How does that work?
540
Let's say we are arguing about that rock formation we found earlier.
541
Right.
542
I think it's unforeseeable.
543
You think it's not.
544
Instead of firing off aggressive legal letters, we can invite the DAB members for a coffee and say, hey, what do you guys think?
545
And they give advice, just informally.
546
They give a non-binding opinion.
547
They might say, look, contractor, under clause 4.10, you're probably going to lose this one.
548
That allows the contractor to back down without losing face.
549
It stops the small fire from becoming an inferno.
550
That's the whole idea.
551
I was reading the appendix on the DAB duties.
552
It creates a real obligation for them to be present, doesn't it?
553
Absolutely.
554
The appendix rules say the DAB members must be knowledgeable about the contract and the physical progress of the works.
555
So they have to be technical people.
556
And rule three covers site visits.
557
They can't just sit in an office in Geneva or London.
558
They have to visit the site regularly, usually every few months.
559
They need to see the mud and the concrete.
560
Exactly.
561
If they don't know the project, they can't help avoid disputes.
562
They have to be engaged.
563
And if the informal chat doesn't work?
564
Then you go to a formal referral.
565
The DAA issues a binding decision.
566
If one party is unhappy with that, they issue a notice of dissatisfaction.
567
And then, what's the final step?
568
Subclause 21.6, arbitration.
569
Usually international arbitration, often under ICC rules.
570
But the hope and the design of the 2017 Red Book is that most issues never get that far.
571
Because the DAB solves them first.
572
Right.
573
Arbitration is the failure state.
574
Finally, let's touch on Part 8, modern updates.
575
The world has changed a lot since the previous edition in 1999.
576
I saw mentions of BIM building information modeling.
577
Yes.
578
1999 was a paper world.
579
2017 is a digital world.
580
The source text includes advisory notes to users regarding BIM.
581
And what do they advise?
582
The Red Book advises reviewing definitions in Clause 1.1 and intellectual property rights in Clause 17.3.
583
Why?
584
Because if the design is a shared 3D model in the cloud, who owns it?
585
Who is liable if the file gets corrupted?
586
The standard clauses need to be tweaked to handle digital data, not just paper drawings.
587
And that leads to special provisions.
588
We've been talking about the general conditions, which are the standard boilerplate.
589
But every project is unique.
590
Correct.
591
The Red Book is a template.
592
The contract data and the special provisions, which are called Particular Conditions Part B, allow you to customize it.
593
So you might need different insurance for a nuclear plant than for a road.
594
Precisely.
595
But there is a warning in the text, isn't there, about making changes?
596
A big one.
597
The guidance warns that great care must be taken.
598
These clauses are an ecosystem.
599
They are interlocked.
600
If you change one clause, you might unintentionally alter the balance of risk elsewhere.
601
Like the butterfly effect.
602
Exactly.
603
If you delete the right of access clause because you think it's redundant, you might accidentally invalidate the contractor's ability to claim delays,
604
which could make the whole contract unenforceable under local law.
605
You can't just hack away at it with a machete.
606
So let's synthesize this.
607
We have gone from defining the word contractor to handling massive international arbitration.
608
We've covered the right of access, the site data risks, the disorderly conduct bouncers, and the termination for convenience nuclear option.
609
It is a comprehensive system.
610
It covers the life cycle of a project from the first handshake to the final certificate.
611
What stands out to me is the shift towards prevention.
612
The DAB seems like the MVP of this edition.
613
I agree.
614
And the provocative thought I would leave the listener with is this.
615
The contract tries to predict every possible future rain, strikes, bankruptcy, bad soil.
616
It is a book of what ifs.
617
Right.
618
But the most important clause might be that avoidance of disputes mechanism.
619
Why is that?
620
Because it acknowledges that the best legal protection isn't a shark lawyer who can win a lawsuit in year five.
621
It is actually structured communication and informal assistance in week five.
622
It prioritizes talking over fighting.
623
It's the difference between winning a war and preventing one.
624
Exactly.
625
Whether you are the employer or the contractor, knowing these 21 clauses isn't just about winning a lawsuit.
626
It's about knowing the rules of the game so you can actually finish the project.
627
Because at the end of the day, nobody wants a lawsuit settlement.
628
They want a building.
629
They want a building.
630
That is a great place to leave it thank you for guiding us through the dense
631
but surprisingly dramatic world of the Afidiye Redbook.
632
My pleasure.
633
It was fun.
634
And to our listener, next time you walk past a construction site and see a crane swinging overhead,
635
remember, there is an invisible web of shells and maize and indemnities holding that whole operation together.
636
Thanks for listening to the Deep Dive.
637
We'll see you next time.
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Why Practice Speaking with This Video?
This video is a goldmine for shadow speak practice—its conversational tone, clear explanations, and real-world context make it perfect for mimicking natural speech. Whether you’re prepping for IELTS speaking practice or just want to sound more confident in professional settings, the dialogue balances complexity with clarity. You’ll learn to discuss technical topics (like contracts) in plain English, a skill that translates to meetings, presentations, and everyday conversations. Plus, the speaker’s pacing is ideal for shadowing—not too fast, not too slow—so you can focus on rhythm and intonation.
Grammar & Expressions in Context
Let’s break down key structures to boost your speaking:
- “It is a recipe for unpredictability.” Using “recipe for” to describe causes of outcomes is a vivid way to explain consequences. Try it: “Poor planning is a recipe for delays.”
- “Don’t let the density fool you.” The structure “don’t let [noun] fool you” is great for contradicting first impressions. Example: “Don’t let his quiet voice fool you—he’s a sharp negotiator.”
- “We’re going to cover everything from finding archaeological ruins to what happens if the employer cancels.” “From X to Y” helps organize ideas clearly, essential for IELTS speaking tasks. Practice: “I love traveling, from hiking mountains to exploring city markets.”
Common Pronunciation Traps
Watch out for these tricky words:
- “FIDIC” (pronounced FEE-dik) – Don’t stress the second syllable. Listen closely to the speaker’s short “i” sound.
- “Archaeological” (ar-kee-uh-LOJ-i-kuhl) – Break it into chunks: “ar-kee” + “uh-LOJ” + “i-kuhl.” Avoid rushing the middle syllables.
- “Invariably” (in-VAIR-ee-uh-blee) – The stress is on “VAIR.” Misplacing it can make the word hard to understand.
Grammar in this video
The structures the speaker uses most, with the exact words from the video:
| Structure | In the video |
|---|---|
| Passive voice be + past participle — the focus is on what happens, not who does it | is structured · is done · is shared |
| Present perfect have/has + past participle — a past action that still matters now | have tried · hasn't finished · hasn't arrived |
| Relative clauses who / which + clause — extra information about a person or thing | responsibility, which is · conditions, which are · provisions, which are |
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.