FIDIC has developed model forms for two types of links between service providers – this Joint Venture Agreement Model and a Model Sub-Consultancy Agreement. A termination clause is an essential part of any advisory agreement and generally contains important safeguards for both clients and consultants. If the contract is terminated for convenience and is subject to additional costs for the advisor, the client pays the advisor the additional time that the consultant`s staff has spent on providing the services at schedule 3 [Pay and Payment] rates. The client also pays for all other costs incurred appropriately by the consultant and the advisor is entitled to bear the shortfall that would otherwise have been realized through the benefits that would not have been provided as a result of the termination. In assessing a reasonable risk relationship between the client and the consultant, the task force took into account the position in which the services were provided incorrectly or insufficiently for reasons beyond the consultant`s control or knowledge. The Working Group found that, in some civil jurisdictions, the consultant had been given strict liability for defective services – some legal systems had a discharge for matters outside the councillor`s control, while in others, no discharge was possible. The Working Group recognized that, in a limited number of countries, the provision of insurance to cover liability is a mandatory obligation in the insurance market, but that this approach is not universal and cannot be seen as a basis for international standing. The task force and FIDIC CC therefore found that the appropriate standard of care to be imposed on a consultant was the competence and diligence required by an experienced consultant. A major criticism for the 4th edition is the treatment of the standards of care of the advisor as part of the agreement.
The 4th edition includes the provision of a schedule of service to Schedule 4. There are no details of what should be on the calendar, nor is there a commitment that the consultant submits, or even respects, to a program. Article 5 of the 5th edition follows the traditional variation clauses in construction contracts. It provides that the discrepancies must be relevant to services without substantially altering the scope or nature of services. The client has the right: With regard to termination for convenience, the 5th edition allows a shorter period on the right of the advisor to resign after the client`s suspension for convenience. It provides that if services have been suspended for more than 168 days, the advisor may terminate the contract after 14 days` notice. This is compared to the 4th edition, where the advisor can, with a 56-day delay, terminate the client, where services have been suspended for more than 182 days. – Current practice around the world in the development of consulting contracts The 5th edition now allows for immediate dismissal in the event of insolvency or corruption. It also contains a clear power for the customer to suspend services for convenience after 28 days of announcement.
These two model agreements are compatible with the fifth edition of the FIDIC „Customer/Consultant Model Services Agreement“ (The White Paper) 2017.
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