Forgot your password?
Please enter your email & we will send your password to you:
My Account:
Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Article 1 definitions
1.1 As used in this Subcontract, the following terms shall have the meanings set out below. Words indicating persons or parties include corporations, and other legal entities, as well as unincorporated joint ventures except where the context requires otherwise. If a word or phrase is capitalized, it is a Defined Term. Defined Terms have the meanings given to them by this Article. Where a word or phrase is a Defined Term in the Main Contract, and is also used in this Subcontract, unless otherwise agreed herein below it will have the meaning in this Subcontract.
“Advance Payment Guarantee” means the guarantee (if any) provided under Article 10.1, and which may form an Appendix hereto.
“Appendix” or “Appendices” means the appendix or appendices to the Subcontract referred to throughout these Conditions of Subcontract, which describe particular aspects of the Subcontract Works. “
Article” means any article or sub-article of these Conditions of Subcontract as the context requires.
“Assumptions” are statements provided by either Party in writing setting out its assumptions (if any) in relation to the Subcontract Works, prior to the signature of the Subcontract Form.
“Business Day” means, unless otherwise agreed, a Day in the Country or, in the case of a local Business Day, in the country in question, on which banks are open for general business.
“Certificate of Completion” is a certificate issued for Completion of Construction or Mechanical Completion, as the case may be.
“Certificate of Final Acceptance” is the certificate issued according to Article 49.14.
“Completion” means Completion of Construction or Mechanical Completion.
“Completion of Construction” or “Mechanical Completion” unless otherwise defined herein, is the moment the Subcontract Works have been physically completed to the extent they are ready to start commissioning. [Page14:]
“Conditions of Subcontract” means these conditions of subcontract.
“Cost” includes any element of actual expense plus overheads.
“Country” means the country where the Site is located.
“Day”, “Days” or “Date/s” mean, unless otherwise agreed, references to a 24- hour calendar day in the Gregorian calendar with "year" meaning 365 days under that calendar, unless it is a 366-day leap year. Periods of time are calculated from the day after receipt of the relevant instruction or other action requiring an activity to commence.
“Daywork Schedule” means a schedule of the Subcontractor’s agreed rates and associated costs to be used in the event of an Instruction being given under Article 35.15 and which forms an Appendix hereto.
“DB” means the Ad Hoc Dispute Board appointed under this Subcontract.
“Defect” means a non-conformity with the Subcontract requirements.
“Defect Correction Period” means the period for correction of Defects as established under Article 49.
“Delay Damages” means the monetary compensation paid under Article 37.
“Design” includes sketches, schemes, models, plans, drawings, technical criteria or standards, and descriptions with aesthetic or functional elements for making up a building, machine, facility or other object or process intended for the Subcontract Works. Design also includes, without limitation, performance descriptions, specifications or requirements.
“Employer” means the legal or natural person(s) named as Employer in the Main Contract, its agents, assignees and the legal successors in title to this or these person(s). If the Employer named in the Main Contract does not have separate legal personality under the laws governing its status, the Employer includes any organization of which it is a part and that has separate legal personality.
“Employer’s Requirements” refers to the Employer’s Requirements in the Main Contract between the Main Contractor here and the Employer, to the extent that they relate to the Subcontract Works.
“Equipment” means all appliances, machinery, vehicles, tools or other things required by the Subcontractor for the execution and completion of the Subcontract Works and the remedying of any Defects. Equipment excludes, however, Temporary Subcontract Works, Plant, materials and any other things intended to form, or forming, part of the Subcontract Works.
“Final Acceptance” has the meaning set out in Article 49.13.
“Force Majeure” has the meaning set out in Article 56.
[Page15:]
“Good Industry Practice” means (i) the exercise of that degree of skill, diligence, prudence and foresight that would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar conditions; or, (ii) the practices in similar industries.
“Hazardous Materials” means any hazardous or toxic substance or hazardous or toxic waste, contaminant, or pollutant as defined in or regulated by the law governing such matters.
“Instruction” is a Main Contractor’s requirement whether in writing or not, that the Subcontractor does or refrains from doing something, or performs tasks at a different time. All non-written Instructions are to be confirmed in writing. An Instruction may or may not be a Variation.
“Invoice Period” shall mean, if not otherwise defined, a calendar month commencing on the first Day of the month and ending on the last Day of the month. The first Invoice Period shall begin on the Day the Notice to Proceed becomes effective.
“Main Contract” means the contract (however it is described) entered into, or in the case to be entered into, between the Main Contractor and the Employer for the engineering, procurement and design of the Works, as defined in the Main Contract.
“Main Contract Conditions” means the Conditions of Contract contained in the Main Contract.
“Main Contract Start Date” means the Date determined in accordance with Article 36.3 of the Main Contract.
“Main Contractor” means the legal or natural person(s) named as Contractor in the Main Contract, its agents, assignees agreed by the Employer and the legal successors in title to this or these person(s). If the Contractor named in the Main Contract does not have separate legal personality under the laws governing its status, the Main Contractor includes any organization of which it is a part that does have separate legal personality.
“Main Contractor’s Equipment” means any Equipment provided by the Main Contractor for the Subcontract Works and/or as may be set out in an Appendix.
“Main Contractor’s Personnel” means physical persons in the employ of or seconded to the Main Contractor and acting for it, or other persons authorized to act for the Main Contractor in relation to the Subcontract Works.
“Main Contractor’s Requirements” means the document(s) sent to the Subcontractor, prior to the Reference Date, setting out the Main Contractor’s requirements for the Subcontract Works, as included in the Subcontract, and set out in an Appendix (if any), and any Variations. The Main Contractor’s Requirements include, without limitation, documents specifying the purpose, scope, time frame for construction, and/or design and/or other technical criteria, and/or conceptual elements for the Subcontract Works. [Page16:]
“Method Statement” means a statement or statements submitted by the Subcontractor and noted or accepted by the Main Contractor describing how the Subcontractor proposes to meet the Main Contractor’s Requirements. The Method Statement may or may not be described as such but will consist of one or more submissions, normally accepted or known by the Main Contractor or its representatives, detailing how the Subcontractor intends to deploy Plant, personnel, material, Equipment and other resources to accomplish the Subcontract Works in the Time to Taking-Over.
“Minimum Performance” means the minimal level of performance of the Subcontract Works (if any) to be achieved during Performance Tests, as are set out in this Subcontract.
“Notice” is a written notification intended to have effect under this Subcontract.
“Notice to Proceed” means the notice given under Article 36.3, which sets the Start Date and first Day of the Time to Taking-Over.
“Payment Certificate” means a certificate issued under Article 42.
“Performance Tests” means those tests (if any) to be performed, specified as such in the Subcontract, in accordance with an Appendix (if any).
“Plant” means any and all apparatus, machinery or devices (if any) intended to form, or forming, part of the Subcontract Works.
“Project” means, if the context so requires, the larger project (if any) the Employer is developing, of which the (Main Contractor’s) Works are a part.
“Punch List” has the meaning set out in Article 47.10.
“Reference Date” means, in the case of a bidding procedure without negotiations, the Date 28 Days prior to the latest Date for the submission of Tenders, and, in the case of a negotiated contract, the Date 28 Days prior to the first signature on the Subcontract.
“Representative” means the physical person(s) appointed from time to time by the Subcontractor or the Main Contractor under Article 18 to act as such under the Subcontract.
“Rules” has the meaning set out in Article 66.3.
“Schedule of Milestones” means the sample schedule which forms an Appendix hereto. “Schedule of Subcontractual Amendments” means the annexure to the Subcontract Form described as the Schedule of Subcontractual Amendments and referred to throughout these Conditions of Subcontract, which Schedule describes particular amendments to this Subcontract and which forms an Appendix hereto.
[Page17:]
“Schedule of Subcontractual Amendments” means the annexure to the Subcontract Form described as the Schedule of Subcontractual Amendments and referred to throughout these Conditions of Subcontract, which Schedule describes particular amendments to this Subcontract and which forms an Appendix hereto.
“Schedule of Subcontractual Dates” is the schedule (if any) set out in or in accordance with Article 38.1 and which forms an Appendix hereto.
“Schedule of Subcontractual Payments” is the schedule set out in or in accordance with Article 41.2, and which forms an Appendix hereto.
“Section” means any part of the Subcontract Works or Site as the context requires.
“Site” (or “Sites” as the context requires) means the land or other places made available to the Subcontractor by or on behalf of the Main Contractor and on, under, in or through which the Subcontract Works are to be constructed. The Site does not include places the Subcontractor has taken possession of or has access to for the purposes of the Subcontract Works, but which were not made available to the Subcontractor by or on behalf of the Main Contractor.
“Start Date” means the Date determined in accordance with Article 36.3.
“Subcontract” means the Subcontract Form, including the Schedule of Subcontractual Amendments and these Conditions of Subcontract together with all Appendices and subsequent alterations and additions agreed in writing, as set out more precisely in Article 7.
“Subcontract Date” means the Date the Subcontract is signed and enters into force as set out in Article 2.
“Subcontract Form” means the subcontract form, including the Schedule of Subcontractual Amendments, to which these Conditions of Subcontract and Appendices are supplemental.
“Subcontract Price” means the price set out in the Subcontract for the provision, on a turnkey basis, of the Subcontract Works, including the supply of all the goods and services that are indicated in this Subcontract, subject to such additions thereto or deductions therefrom as may be made in accordance with the provisions of the Subcontract.
“Subcontract Works” means the works to be completed by the Subcontractor under this Subcontract and the associated supplies and services, including software as appropriate.5
“Subcontractor” means the legal or natural person(s) named as Subcontractor in the Subcontract, its agents, its subcontractors, its assignees agreed by the Main Contractor and the legal successors in title to this or these person(s
[Page18:]
“Subcontractor’s Documents” means all physical documents, software and any other form of recording and transferring of information submitted by the Subcontractor under this Subcontract to the Main Contractor, including, without limitation, the construction documents, operation and maintenance manuals and as-built drawings, all as specified in this Subcontract, or, if there is no such specification, as may be identified by referring to the requirements of Article 33.
“Subcontractor’s Equipment” means the Equipment provided by the Subcontractor for the Subcontract Works and/or as may be set out in an Appendix.
“Subcontractor’s Personnel” means physical persons in the employ of or seconded to the Subcontractor and acting for it, or other persons authorized to act for the Subcontractor in relation to the Subcontract Works.
“Subcontractor’s Variation Proposal” has the meaning set out in Article 35.9.
“Subcontractual Performance” means the performance levels of the Subcontract Works (if any) that are guaranteed by the Subcontractor to be achieved during the Performance Tests as may be set out in an Appendix to this Subcontract.
“Taking-Over” or “Provisional Acceptance” means the moment when the Subcontract Works are or are deemed to be provisionally accepted by the Main Contractor under Article 47. Taking-Over or Provisional Acceptance can be accomplished by Section, if the Parties agree, or will occur in fact if the Main Contractor or Employer (or persons acting on either’s behalf) actually takes possession of Sections of the Subcontract Works.
“Taking-Over Certificate” means the Certificate(s) issued under Article 47.
“Taking-Over Conditions” has the meaning set forth in Article 47.2.
“Temporary Subcontract Works” means all temporary works of any type needed at the Site for the construction and/or completion of the Subcontract Works and the remedying of any Defects to them.
“Tender” means the Subcontractor’s tender (Subcontractor’s offer to execute the Subcontract Works) and any additions or modifications to that document or its appendices.
“Time Schedule” means the schedule provided for under Article 38.4 and which forms an Appendix hereto.
“Time to Taking-Over” means the number of Days the Subcontractor has to achieve Taking-Over of the Subcontract Works or particular Sections of the Subcontract Works, as this time may be amended in accordance with the Subcontract.
[Page19:]
“Variation” includes any change to the Subcontract Works, or their location, or the time in which they or any part of them are to be constructed, including, without limitation, any change to the type, form or composition of materials to be used, sequence(s) or timing of construction, performance or other specifications, or any changes relating to the Design.
“VAT/GST” means the local consumption tax charged on any goods and/or services (usually described as a percentage of the selling price) howsoever described.
Article 2 entry into force of the subcontract/Flowdown
2.1 This Subcontract shall enter into force and be binding on the Parties on the Date it is signed (the “Subcontract Date”). The responsibility for, and expense of, stamp duties and similar charges (if any) imposed by law in connection with the signature of this Subcontract shall be borne by the Main Contractor.6
Flow Down of the Main Contract
2.2 The Subcontractor expressly confirms that it is bound to follow and give effect to the Main Contract provisions as if it were the Main Contractor to the extent the Subcontract Works are concerned, save where expressly stated otherwise in this Subcontract.
2.3 Unless otherwise agreed, if these Conditions of Subcontract treat subject matter also treated in a provision of the Main Contract Conditions, the provision of the Conditions of Subcontract takes precedence over the corresponding Main Contract provision.
Recording Direct Instructions from the Employer or the Employer’s Representative
2.4 Should the Employer or the Employer’s Representative give an oral or written instruction directly to the Subcontractor, the Subcontractor shall as soon as reasonably possible record the instruction in writing and provide a copy of such instruction to the Main Contractor and Employer. The Main Contractor shall without any delay, but not later than 15 Days from the Subcontractor’s notice, either confirm, amend or reject such direct instruction in writing. Where the Main Contractor confirms or amends the Employer’s or the Employer’s Representative’s direct instruction, such confirmed or amended direct instruction shall be deemed a Main Contractor’s Instruction. If the Main Contractor does not confirm or rejects the Employer’s direct instruction, the Subcontractor shall not follow the instruction. If the Instruction constitutes a Variation, Article 35 shall apply.
[Page20:]
2.5 If the Main Contractor receives from the Employer any Notice and particulars of an Employer’s claim which concerns the Subcontractor, the Main Contractor shall immediately send a copy to the Subcontractor. The Subcontractor shall provide all reasonable assistance to the Main Contractor in relation to the Employer’s claim.
Article 3 good faith and fair dealing
3.1 In carrying out their obligations under this Subcontract the Parties will act in accordance with the principles of good faith and fair dealing. The provisions of this Subcontract, as well as any statements made by the Parties in connection with it, shall be interpreted in accordance with the principles of good faith and fair dealing.
3.2 Good faith and fair dealing in this context includes, without limiting this duty, the duty to co-operate, not to intentionally mislead, and to carry out the Subcontract to the mutual benefit of both Parties, accepting that each is entitled to achieve its reasonable objectives, and requires the Parties to:
3.3 Whenever consultation is required by this Subcontract, it means there shall be a direct exchange of opinions prior to any final decisions being taken about the matter requiring consultation.
Article 4 language of the subcontract
4.1 Unless otherwise agreed, the ruling language of this Subcontract and any disputes or differences decided in relation to it, is the language of the Main Contract.
4.2 Unless otherwise agreed, the language and communication provisions of the Main Contract shall apply.
[Page21:]
Article 5 applicable laws
Governing substantive law
5.1 This Subcontract shall be governed by and construed in accordance with the law(s) agreed by the Parties in Appendix [__], Schedule of Subcontractual Amendments.7In the absence of such agreement, this Subcontract shall be governed by and construed in accordance with the law(s) of the Main Contract. In the absence of a governing law stated in the Main Contract, the governing law will be the law of the Country. Such choice of law shall refer only to substantive law and shall not include its procedural or conflict-of-laws rules.
Laws and regulations of the Country
5.2 The Parties shall, in performing the Subcontract, comply with all laws in force in the Country that must be observed by those who perform activities in the Country (such as, for instance, safety measures, exchange control limitations, etc.).8 article 6 new or changed laws, standards, regulations, etc.
Article 6 new or changed laws, standards, regulations, etc.
6.1 If there is a change of applicable laws, regulations, standards, internal procedures or their interpretation after the Reference Date, which affects the performance of the Subcontract, each Party shall give Notice to the other.
6.2 In the event that:
the Subcontractor shall be entitled to a Variation and the corresponding effect in time and Cost shall be taken into account in the time and Cost provisions herein, with certification of any additional or reduced Costs as early as possible.
Article 7 Interpretation of the subcontract
7.1 The documents forming the Subcontract are to be read together and interpreted as mutually explanatory of one another. If there is a direct inconsistency in specific obligations, then for the purposes of interpretation, and unless otherwise agreed, the priority of the Subcontract documents shall be in accordance with the following sequence:
[Page22:]
7.2 The higher priority interpretation shall be adopted only to the extent required to deal with an inconsistency. Specific terms agreed take priority over general statements, and terms in Subcontract documents created at a later Date govern over terms in earlier Subcontract documents. Subject to the foregoing, the terms of the groups of documents set out in Article 7.1 all have equal importance within their group.
Article 8 assumptions; statement about distances, measures, dimensions and quantities
8.1 If either Party does not accept an Assumption of the other Party or wishes to have it varied, it must indicate this in writing to the other Party, specifically identifying which Assumption it does not accept, prior to signature of the Subcontract. Disagreement notified after the signature of the Subcontract will not be taken into account (e.g. in relation to Costs or assessment of extensions of the Time to Taking-Over), unless otherwise agreed.
8.2 It is agreed that when either Party states or has stated distances, dimensions, strengths, qualities, quantities or volumes, these statements or figures are taken as statements of fact. Each Party must make reasonable efforts to ensure that the statement is accurate. article 9 obtaining permits, planning and other permissions
Article 9 obtaining permits, planning and other permissions
9.1 Unless otherwise agreed, each Party shall obtain at its own expense all permits, licences or approvals from all local, state/provincial or national government authorities or public service undertakings, which are required to be obtained by it in its name and which are necessary for the execution of the Subcontract Works.9
[Page23:]
9.2 Each Party shall, at the request of the other Party, assist the other Party in a timely and effective manner in obtaining permits, licences or approvals, which are required for the performance of any part of the Subcontract Works. article 10 guarantees, bonds or other securities
Article 10 guarantees, bonds or other securities
10.1 The purpose of bonds, bank guarantees, letters of credit and/or Advance Payment Guarantee(s) (if any) to be provided by the Parties is to guarantee and secure the obligations of the delivering party. To the extent provided in the Schedule of Subcontractual Amendments or elsewhere in the Subcontract, each Party shall provide (at its own expense) the guarantee(s), bonds or other securities required under the Subcontract.
10.2 Unless otherwise agreed, each Party shall deliver any guarantee(s), bonds or other securities to the other Party within 28 Days after the Subcontract Date. Each such security shall be issued by an entity and from within a country (or other jurisdiction) acceptable to the other Party, and shall be in the form set out in an Appendix to this Subcontract (if any), or as otherwise agreed by the Parties.
Article 11 demands under guarantees, bonds or other securities
11.1 Neither Party shall make a claim under any guarantee, bond or other security, however described, unless there has been a decision in accordance with Chapter 13 specifying the amounts to which it is entitled under the Subcontract, or for its breach.
11.2 Each Party hereby indemnifies and holds the other Party harmless for all damages, losses and expenses (including legal fees and expenses) resulting from a claim under any guarantee, bond or other security to the extent to which the Party making such claim was not entitled to make the claim or the value of the claim exceeded the Party’s proper entitlement.
11.3 Unless otherwise agreed, each Party shall return the guarantee(s), bonds or other securities to the other Party within 21 Days after the security expires, and/or when the Subcontractor has become entitled to receive the Certificate of Final Acceptance. In any event, all securities howsoever described will include or be deemed by the Parties to include a term that they are to become invalid, null and void on the Date that they should have been returned, whether returned or not.
11.4 To the extent that either Party holds funds or securities to which the other Party or a third party is or will become beneficially entitled, the Party holding the funds hereby agrees it does so as trustee, for the benefit of the other Party or the third party.
[Page24:]
Article 12 no agency - independent contractor
12.1 The Parties agree that neither Party will perform any act or make any statement to any person to the effect that it is acting or has acted under this Subcontract as agent for the other Party.
12.2 The Subcontractor shall be an independent contractor with respect to the Subcontract Works, and neither the Subcontractor nor its other subcontractors nor the employees of either shall be deemed to be agents, representatives, employees or servants of the Main Contractor or Employer in the performance of the Subcontract Works, or any part thereof, or in any manner dealt with herein.
12.3 Nothing in this Subcontract creates a contractual relationship between the Subcontractor and the Employer.
5 The parties can determine the scope of the Subcontract Works of the Subcontractor in RASI form as set out in an Appendix. This form is normally used in industrial subcontracting but can also be used in other types of subcontracting. In construction subcontracting, the parties usually use the form of split of works.
6 6 This Article deals with the entry into force of the Subcontract, thus, for some purposes, the Subcontract is in effect – the dispute resolution provisions, for example, will be operative. This Article does not deal with the Start Date, and readers should go to those provisions at Articles 36.2 and 36.3 to determine the beginning of the Time to Taking-Over.
7 7 The laws of another jurisdiction are chosen sometimes for reasons of impartiality and certainty. Before choosing the law of a given country, Parties should check if the provisions of this model contract conform with such law. Many countries have mandatory laws that apply because of the location of the works.
8 Unless Parties agree that the Main Contractor should provide information about laws that may affect the performance of the Subcontract Works, the Subcontractor should verify in advance which laws might affect its performance.
9 The Parties may list in an Appendix the permits, licences or approvals from all local, state/provincial or national government authorities or public services, to be obtained for the execution of the Subcontract Works. The list should specify the Party that will obtain the permit, licence or approval.