Study Of The Fidic Contract Changes To The Law

There are many features of international projects contracts. Employers and contractors are in different countries, projects are always complicated, and the whole process lasts long time. Those factors make it impossible for parties to foresee all situations which may happen during projects. Therefore, Variation becomes inevitable. As for employers, Variation means investment control, schedule and quality management. As for contractors, Variation is an important profit-making way. Scholars in project construction and contract management have already done some study on Variation in international projects, while legal field rarely pays specific attention to it. Taking 99FIDIC Red Book as a chief source, with case study, comparison analysis, and induction analysis methods, this paper tries to making research on nature, intension, extension and effectiveness of Variation, explaining ways to achieve Variations, disputes solutions and application of law, analyzing impacts of engineers' status on Variation instructions and making comparison between 99FIDIC Red Book and another model contract NEC Contract, which is pro-employer. I hope this paper can be used for reference for both employers and contractors in international projects.This paper is generally divided into three parts, Foreword, Main Text and Concluding Remarks.In Foreword, the author displays theoretical and practical significance of Variation, and introduces development of research in the field and main research methods used in the paper.Main Text, the core of the whole paper, is divided into six parts. Part 1 makes a brief introduction of FIDIC Contract. Federation Internationale des Ingenieurs Conseils (FIDIC) , which is a world-wide authoritative engineer organization, has been making series of model contracts of international projects since 1957. These contracts, which absorb experience of employers, engineers, and contractors, are deemed as high-level universal project contracts, and are widely used all over the world. FIDIC Red Book, applicable to construction projects designed by employers, has been modified for many times and the 99FIDIC Red Book is the 5th edition. This paper makes study of Variation on the basis of 99FIDIC Red Book. Part 2 concludes basic issues of FIDIC Variation. After reviewing fundamental theory of contract law, the author points out the nature of FIDIC Variation. Because of its different content, FIDIC Variation has different natures. Some is common contract variation, some is rescinding of parts of the former contracts and some is establishing a new contract after rescinding the former one. Then the paper takes 99FIDIC Red Book as the chief source, listing extensions of Variation, concluding its features, and analyzing its effect with a case. Part 3 explores the status of engineers in Variation and the effectiveness of his instructions. In international projects, it is engineers who give Variation instructions. In 99FIDIC New Red Book, engineers are employees of employers, and have the status of deputy of employers; in 87 FIDIC Red Book, engineers are independent ones. This paper illustrates different effectiveness of Variation Instruction according to different status of engineers. Generally speaking, if not specifically pointed out, instructions of engineers can be overturned. Part 4 discusses approaches to achieve the Variation. In past studies, Variations are often mixed with Claims. While making clear of differences between Variations and Claims, the author explains ways to achieve Variation. Two stages are involved, stage of Variation conformation and stage of claims for project period and contract costs. Part 5 discusses solutions of disputes aroused by Variation. FIDIC New Red Book provides three ways to deal with disputes aroused by Variation, such as DAB Process, Amicable Settlement, and Arbitration. Furthermore, judicial process can be involved to supervise Arbitration. An issue worth mentioning here is DAB process which is particularly prescribed in 99FIDIC New Red Book. In this session, the author discusses its validity foundation, detailed effectiveness, date of effectiveness, and enforcement of DAB decisions. Part 6 investigates application law of Variation issues. There are academic theories of unification and segmentation for application law of contract disputes. Most countries take theory of segmentation as the guiding idea for their legislation. According to the theory of segmentation, disputes aroused by Variation can take laws determined by both parties, laws of the place of objective marks, and laws with closest ties with disputes, as applicable law. What's more, while selecting applicable laws for Variation disputes, we should pay attention to how much we know about it, its perfect property, its compulsory regulations, and the risks of changes. Readers can also see comparison of Variation between FIDIC Contracts and NEC Contracts in parts 2, 4, 5. NEC Contract, traditionally deemed pro-employers, is a model contract compiled by Institution of Civil Engineers, and widely used Commonwealth of Nations. The author hopes differences pointed out here can help understand FIDIC Variation better.Concluding Remarks retrospect the whole thought of the paper, and place prospects on further study of Variation issues.Generally speaking, on the basis of 99FIDIC New Red Book, this paper makes systematically legal analysis on Variation and can be considered as references for further academic study. I hope and believe, as China enters WTO and merges into world economy, more and more scholars and experts will pay concerns on Variation issue and advance more opinions and better advice. I also believe that legal scholars will follow the trend, and exert more functions for our construction enterprises to compete in the world market.