Understanding the multiple functions of construction contracts: the anatomy of FIDIC model contracts

Abstract

Construction contracts, such as FIDIC model contracts, are relatively complex and cumbersome, and their composition needs to be better understood. This research uses a multi-functional approach that is widely recognized in the contract literature, and anatomizes FIDIC model contracts in order to gain a holistic and comprehensive understanding of them. Moreover, this research comparatively analyses the distribution of the three functions, namely control, coordination and adaptation, in four forms of FIDIC model contracts to explore how project delivery systems (PDSs) affect contract design. After a classification framework that includes three functions and ten subclasses was established, the FIDIC 1999 series model contracts were coded sentence by sentence using content analysis. The results show that the three functions are all non-trivially reflected in construction contracts and are influenced by project complexity. Regarding different PDSs, the complexity of contract control is relatively rigid; the complexity of contract coordination is largely influenced by PDSs; and the impact of PDSs on the complexity of adaptation provisions depends on the sub-class. The conclusions may help scholars and practitioners understand construction contracts from a functional perspective, and offer references for contract designers to reasonably consider the distribution of the three functions in construction contracts.

Keywords:

• Contract structure
• contract documentation
• content analysis
• FIDIC

Acknowledgements

The authors would like to thank the editor Dr Paul Chan and the four anonymous reviewers for their insightful comments.