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1️⃣ Purpose of Clause 2.5 (1999) vs. Clause 20 (2017)
Let’s start with a simple question:
❓ “If the Employer thinks the Contractor has caused them loss—maybe by delaying the project, damaging property, or not meeting specs—how do they make a formal claim for compensation or a time-related remedy under FIDIC?”
Well, that’s where these clauses step in. But depending on whether you’re reading the 1999 or the 2017 Yellow Book, the process looks quite different. Let’s explore.
🟡 1999 Edition – Clause 2.5: A Short, Standalone Procedure Just for the Employer
Clause 2.5 is like the Employer’s private lane for making claims. It gives the Employer a distinct route to raise issues like:
- Requesting payment from the Contractor (e.g., for damages or cost recovery).
- Seeking an extension to the Defects Notification Period (if they feel they deserve more time to check the Contractor’s work).
✅ What’s its main job?
To tell the Employer: “If you believe the Contractor owes you something, don’t just start deducting amounts. You need to formally notify the Contractor, explain why, and let the Engineer make a fair call.”
📌 Key Purpose Highlights:
- Enforce a notice requirement on the Employer.
- Promote transparency: the Employer must tell the Contractor what the claim is about, why, and how much.
- Empower the Engineer to step in, review the case, and decide what’s fair.
It was a neat idea. But the implementation? A bit one-sided. Unlike the Contractor’s process (detailed over multiple sub-clauses in Clause 20.1), this Employer process was short and lacked detail—just one clause.
🔵 2017 Edition – Clause 20: A One-Stop Shop for All Claims
Fast-forward to 2017, and FIDIC does something bold: it merges the Employer’s and Contractor’s claims under a single, unified framework. 🎯
Now, Clause 20 applies equally to both parties. The name itself tells you everything:
“Employer’s and Contractor’s Claims“
Here’s the shift in mindset:
👉 “Why should only the Contractor be subject to strict claim rules and timelines? Let’s make the playing field level.”
📌 What does Clause 20 aim to do?
- Create symmetry: both Parties now follow the same structured steps to make a claim.
- Introduce rigorous timelines: no more open-ended Employer claims that sneak in months later.
- Reinforce accountability: both Parties must keep proper records, explain their basis, and follow-up with detailed justifications.
🧠 So now, whether it’s the Contractor asking for more time, or the Employer claiming for damages, both must:
- Notify the other Party within a set period (typically 28 days).
- Submit contemporary records.
- Send a fully detailed claim within 84 days (unless otherwise agreed).
- Allow the Engineer to decide or help reach agreement.
⚖️ A Quick Analogy…
Think of FIDIC 1999 like having two separate queues at a service counter—one fast-track (Employer’s Claim in Clause 2.5) and one with lots of paperwork and checkpoints (Contractor’s Clause 20.1).
Now, FIDIC 2017 is like combining both into one line—but with uniform rules and security checks for everyone. You show your documents, explain your case, and the same process applies whether you’re the Contractor or the Employer.
💡 So Why Did FIDIC Make This Change?
The change reflects a deeper philosophy shift:
- 🚫 No more favoritism—every Party follows the same rulebook.
- 🧾 More structure and clarity—no more “grey zones” in how Employer’s claims are handled.
- ⏱️ Time sensitivity—late claims can be barred if not properly notified.
- 🔄 Engineer’s impartial role—ensures balanced decision-making under Clause 3.7.
🎯 Summary Table: Purpose Comparison
| Aspect | 1999 – Clause 2.5 | 2017 – Clause 20 |
|---|---|---|
| Claim route | Separate clause for Employer only | One procedure for both Parties |
| Structure | Very brief, lacks procedural detail | Detailed, structured, timeline-based |
| Notice period | No strict time limits | Typically 28 days to notify |
| Engineer’s role | Review & determine claim | Facilitate agreement or make a determination |
| Purpose | Allow Employer to recover sums/extend DNP | Ensure both Parties follow same process for any claim |
So to sum it all up in plain speak:
🗣️ “Back in 1999, the Employer could more casually make a claim. But in 2017, they’ve got to toe the line—just like the Contractor. Notify on time, show your proof, and let the Engineer decide. Fair and square.”
2️⃣ Breakdown of Clause 2.5 (1999) vs. Clause 20 (2017)
Imagine this like unpacking a toolbox. Each clause is a different set of tools, and if you’re going to use them properly, you’ve got to know where the screwdriver ends and the wrench begins.
🟡 FIDIC 1999 – Clause 2.5: The Employer’s Claim Toolbox
Here’s the exact title:
Seems straightforward, right? But let’s walk through its moving parts like we’re reading a contract together on a jobsite trailer whiteboard.
🛠️ Part 1 – The Trigger: “If the Employer considers himself to be entitled…”
This is the opening gate. The Employer must believe they’re owed something — whether that’s:
- Additional payment from the Contractor (maybe because of defective work, delays, or breach), or
- An extension to the Defects Notification Period (DNP) (maybe the work was so faulty that more time is needed for review).
✅ So it starts with the Employer believing there’s a valid issue.
🛠️ Part 2 – The Notice: “…shall give notice and particulars to the Contractor.”
Now here’s the important part. The Employer can’t just hold back money or extend deadlines silently. They must notify the Contractor.
🗂️ What needs to be in this notice?
- The legal or contractual basis for the claim.
- The details or particulars of the claim.
- The amount of money or the time extension being sought.
🧠 This is key because it ensures transparency. The Contractor shouldn’t be blindsided by deductions or delays.
🛠️ Part 3 – The Role of the Engineer: “The Engineer shall then agree or determine…”
Now it’s over to the Engineer – the neutral(ish) referee. The Engineer is tasked with:
- Reviewing the claim.
- Considering supporting documents.
- Making a determination under Clause 3.5 (that clause defines how determinations are made: fairly, within a reasonable time, and after discussions).
⚖️ In essence: The Employer makes the claim, but the Engineer decides whether it sticks.
🛠️ Part 4 – Recovery or Deduction: “…and may be included as deductions from payments.”
If the claim is valid, the Employer can:
- Recover money owed by the Contractor, or
- Deduct it from payments due to the Contractor.
It’s kind of like the Employer saying, “Well, you owe me ₹10 lakhs, so I’m holding that back from your next invoice.”
🚨 But only after following the formal process!
🔵 FIDIC 2017 – Clause 20: One Unified System for All Claims
Here’s where things get exciting from a contract nerd’s point of view. 😄
Clause 20 is now titled:
“Employer’s and Contractor’s Claims”
No more separate lanes—this is a single expressway, and everyone’s driving on it, just with their own vehicles.
Let’s pop the hood on this system.
🚘 Sub-Clause 20.1 – What’s a “Claim”?
Here’s the rulebook definition:
“A Claim means a request or assertion by one Party to the other for an entitlement…”
That includes:
- Time
- Money
- Or “another entitlement or relief”
And the beauty of it? It applies equally to the Contractor and the Employer.
📌 That means now, if the Employer wants to deduct money, they must follow the same structured procedure as the Contractor.
🚘 Sub-Clause 20.2.1 – Notice of Claim (⏰ within 28 days!)
Let’s say the Employer sees a delay caused by the Contractor. Under 2017 rules, they now have:
- 28 days from when they become aware (or should have become aware) of the issue,
- To send a formal Notice of Claim.
⚠️ And if they miss this window? They may lose the right to pursue that claim — unless there’s a “valid reason” for the delay.
This time-bar system applies equally to the Employer and the Contractor.
✋ No free passes.
🚘 Sub-Clause 20.2.3 – Keep Contemporary Records
Here’s where documentation becomes your best friend.
The claiming Party (in this case, the Employer) must keep and submit relevant records to support their claim. This might include:
- Inspection reports
- Photos
- Emails
- Measurement books
🗂️ In short: “Show your working, not just your answer.”
🚘 Sub-Clause 20.2.4 – Fully Detailed Claim (📅 within 84 days!)
Once the claim notice is in, there’s a second step: the Detailed Claim.
- This must be submitted within 84 days of when the Party became aware of the event.
- It needs to include:
- Background facts
- Contractual/legal basis
- Valuation or time analysis
- Supporting records
This is where you lay your cards on the table.
🚘 Sub-Clause 20.2.5–20.2.6 – Updates and Final Claim
If the event is ongoing (like continuing delays), the Employer must provide:
- Monthly progress updates on the claim, and
- A final statement once the event ends.
📌 It’s all about keeping things dynamic and up-to-date, not just dumping info months later.
🚘 Sub-Clause 20.2.7 – Agreement or Determination
This is the Engineer’s time to shine (again!).
- First, the Employer and Contractor are encouraged to reach amicable agreement.
- If not, the Engineer must make a fair determination under Sub-Clause 3.7.
⚖️ Same principle as in 1999—but now it’s clearer and more structured.
🎯 Comparison Snapshot
| Key Element | 1999 – Clause 2.5 | 2017 – Clause 20 |
|---|---|---|
| Who’s it for? | Only Employer | Both Parties |
| Time limits? | No specific timeframe | ✅ 28 days (Notice), ✅ 84 days (Details) |
| Records needed? | Not mentioned | ✅ Yes, “contemporary records” |
| Engineer’s Role | Determines claim (Clause 3.5) | Agreement or Determination (Clause 3.7) |
| Payment/Deduction | After Engineer’s decision | Same, but only after full claim process |
| Update Requirement | None | ✅ Monthly updates if claim is ongoing |
🧠 Final Thought for This Section
“In 1999, the Employer had a short but sweet process—almost too sweet. By 2017, the FIDIC drafters said, ‘Let’s hold everyone to the same high standard.’ And honestly? That makes the process fairer, more transparent, and more contractually robust.”
3️⃣ Key Interpretations and Implications
3.1 Obligations & Exclusions
- Under 1999:
- Employer must give reasonable notice; no explicit timeline for presenting claims.
- May rely on the Engineer’s determination to offset sums against payments due to the Contractor.
- Under 2017:
- Employer’s claims are subject to the same notice period (typically 28 days) that applies to Contractor’s claims—encourages diligence from the Employer side.
- Failure to comply might jeopardize the Employer’s entitlement.
3.2 Risks & Benefits
- Under 1999:
- Potentially more open-ended for the Employer, but sometimes uncertain regarding timing and finality.
- Under 2017:
- The Employer risks losing its claim if strict notice and evidence requirements are not met.
- Provides clarity and predictability—both sides must follow the same steps.
3.3 Critical Aspects to Watch
- 🚨 Timely Notification: 2017 introduces potential “time-bar” effects for late Employer notices.
- 📌 Thorough Justification: Both editions require basis and substantiation, but 2017 demands robust “contemporary records.”
- ✅ Engineer’s Determination: In both editions, the Engineer’s role to determine sums/entitlements remains pivotal.
4️⃣ Cross-Referencing with Other Clauses
So, here’s the thing about construction contracts—they’re never just about one clause doing its job alone. Every clause in FIDIC is part of a web 🕸️, and understanding how Employer’s Claims work means understanding how they interact with the rest of the contract.
Let’s walk through the key cross-references you absolutely must be aware of if you’re dealing with Employer’s Claims—both in the 1999 and 2017 editions.
🟡 In the 1999 Edition – Clause 2.5 as a “Lone Wolf” (but with secret connections)
🔌 Clause 2.5 ⟷ Clause 3.5 (Engineer’s Determination)
Let’s start with this connection—it’s a big one.
Clause 2.5 says that after the Employer sends their claim to the Contractor, the Engineer shall:
“agree or determine… in accordance with Sub-Clause 3.5.”
So what’s in Clause 3.5?
📜 Clause 3.5 (1999) is the Engineer’s official instruction manual for making decisions:
- It tells the Engineer to act fairly and neutrally.
- The Engineer must consult with both Parties.
- Must make the determination within a reasonable time.
🧠 Why it matters: Even though the Employer is essentially the “boss” of the Engineer (hired and paid by the Employer), FIDIC demands that the Engineer acts impartially when handling claims.
✅ So even for an Employer’s own claim, the Engineer can’t just rubber stamp it—they must evaluate it fairly. That’s a check-and-balance baked into the process.
🔌 Clause 2.5 ⟷ Clause 14 (Payment to Contractor)
This is where the Employer’s claim becomes real in financial terms.
Say the Employer thinks the Contractor caused ₹15 lakhs in delay damages. Once that claim is valid (via the Engineer’s determination), the Employer can recover that amount by:
- Withholding it from future interim payment certificates, or
- Deducing it from the final account.
🧾 That’s why you’ll often find references to Clause 2.5 claims turning up in Clause 14.6 or 14.7, where payment mechanics live.
💡 Pro tip: If the Engineer’s determination is pending, the Employer cannot arbitrarily deduct—they must wait for that process to conclude.
🔌 Clause 2.5 ⟷ Clause 20 (Contractor’s Claims and Disputes)
Here’s a spicy one 🔥. What happens if the Contractor disagrees with the Employer’s claim or the Engineer’s decision?
Boom—you’re now in Clause 20 territory.
- The Contractor can challenge the determination by issuing a Notice of Dispute.
- That can take the Parties to Dispute Adjudication, or even arbitration.
🧠 So while Clause 2.5 starts the Employer’s claim process, Clause 20 often ends it—in a courtroom or a DRB room.
🔵 In the 2017 Edition – Clause 20 as the “Team Player” of the Contract
Unlike the lone-wolf feel of Clause 2.5 in 1999, Clause 20 in 2017 is like the quarterback of a football team—it’s connected to everything. 🏈
Let’s look at the key teammates:
🔌 Clause 20 ⟷ Clause 3.7 (Agreement or Determination by the Engineer)
Clause 20.2.7 hands the baton to Clause 3.7 if the Parties can’t agree on the claim.
📜 Clause 3.7 says:
The Engineer shall “encourage discussions” between the Parties to reach agreement. Failing that, the Engineer must give a fair and reasoned determination.
This reinforces neutrality. Whether it’s a Contractor’s claim for more money or an Employer’s claim for deductions, the Engineer must play fair.
⚖️ FIDIC 2017 even gives more structure to how this happens—almost like saying, *“Don’t just decide—show your working!”
🔌 Clause 20 ⟷ Clause 14 (Payments)
Just like in 1999, Clause 14 is still where the money flows. 💰
But in 2017, the process is more refined:
- The Employer can’t unilaterally deduct amounts from the Contractor’s interim payment certificates.
- If they want to deduct something (say, for delay damages), they need:
- A valid Clause 20 claim, and
- Either agreement or Engineer’s determination under Clause 3.7.
📌 This protects the Contractor from sudden deductions and enforces procedural discipline on the Employer.
🔌 Clause 20 ⟷ Clause 21 (Disputes and Arbitration)
Here’s the natural next step if either Party is unhappy with the claim outcome.
In 2017, Clause 21 governs Disputes, including:
- DAAB (Dispute Avoidance/Adjudication Board),
- Arbitration, and
- Binding decisions (unless challenged within a time frame).
So just like in 1999, Clause 20 claims often end their journey in Clause 21 if there’s no mutual agreement.
💡 Fun fact: The 2017 version adds stronger mechanisms for dispute avoidance, not just resolution.
🔌 Clause 20 ⟷ Clause 1.1 (Definitions) and Clause 1.13 (Compliance with Laws)
This one’s a subtle but important link.
Clause 20.1 tells us what a “Claim” means. But to really interpret that definition, you’ve got to peek at:
- Clause 1.1 for all key contract definitions,
- Clause 1.13 to check if the claim relates to breach of laws or local compliance.
📌 For example: If the Employer is claiming that the Contractor violated Indian environmental law, you better look at how Clause 1.13 plays with Clause 20.
🧠 Why These Cross-References Matter in Real Life
Here’s a quick real-world scenario:
The Employer sends a letter saying, “We’re deducting ₹20 lakhs from your next payment due to slow progress.”
🚨 Problem: They didn’t follow Clause 20’s procedure.
👉 The Contractor can trigger Clause 3.7 (Engineer’s determination), or file a dispute under Clause 21.
👉 The Employer might end up paying that amount back, with interest.
This shows how failure to cross-reference properly can backfire badly.
🔍 Final Word: Cross-Referencing is Not Just Legal Jargon — It’s a Contract Survival Skill
“In FIDIC, clauses talk to each other. If you’re only reading Clause 2.5 or 20 in isolation, you’re missing 80% of the picture.”
To fully understand and use Employer’s Claims:
- You must involve the Engineer (Clause 3.5 or 3.7).
- You must check how payments are processed or blocked (Clause 14).
- You must be ready for disputes (Clause 20 or 21).
- You must consider definitions, law compliance, and records (Clause 1, Clause 4.20, etc.).
5️⃣ What If Scenarios?
- What if the Employer fails to give notice of a claim within 28 days (2017 Edition)?
- It could be time-barred, meaning the Employer might lose the right to pursue it (subject to the specifics of Sub-Clause 20.2).
- What if the Employer in the 1999 Edition never issues a claim notice under Clause 2.5 but withholds money anyway?
- Could lead to disputes if the Contractor challenges the deduction, eventually moving to arbitration under Clause 20.
- What if the Engineer partially approves an Employer claim?
- The Parties may accept or dispute the decision. If there’s dissatisfaction, it escalates to the dispute mechanism in Clause 20 (1999) or Clause 21 (2017).
6️⃣ Suggestions for Clarity and Improvement
No matter how well-drafted a standard form is, there’s always room for refinement—especially when contracts hit the real-world chaos of site delays, change orders, and payment squabbles. Let’s roll up our sleeves and improve the clarity of Clause 2.5 (1999) and Clause 20 (2017) using solid reasoning and on-site logic.
🟡 A. Clause 2.5 (1999 Edition) – Where the Cracks Show
🔧 1. No Time Limit for Employer’s Notice
There’s no express time period in Clause 2.5 for when the Employer must issue a claim notice.
🧱 Why it’s risky:
- The Employer could delay sending the notice for weeks or even months, and still make a valid claim.
- This opens the door for “ambush deductions” during interim payment stages.
🔍 Example Scenario:
The Contractor receives IPC #8 showing ₹40 lakhs payment, but suddenly sees ₹6 lakhs deducted. The reason? An Employer claim from 3 months ago for rework.
No warning, no prior notice. Boom—cash flow disrupted.
✅ Suggested Fix – Insert a Time-Bar:
“The Employer shall give notice of any such claim to the Contractor as soon as practicable, and in any event within 28 days after the Employer became aware, or should have become aware, of the event or circumstance giving rise to the claim.”
This aligns with the Golden Principle of certainty and transparency.
🔧 2. “Shall give notice and particulars” – Too Vague
FIDIC 1999 doesn’t say how much detail is enough. Is a one-line letter enough? Or do you need valuation breakdowns?
🔍 Example:
“Dear Contractor, we are claiming ₹10 lakhs for delay.” — Is that sufficient?
Not really. There’s no clarity on what counts as a “valid” claim notice.
✅ Suggested Fix – Add Detail Requirements: In Particular Conditions, require the notice to include:
- Contractual clause relied upon (e.g., breach of Clause 4.1).
- Nature of the claim (e.g., delay, defects, etc.).
- Estimated financial impact or time extension.
- Supporting evidence (e.g., photos, NCRs, inspection records).
✍️ Proposed Modified Wording:
“The notice shall include the clause(s) of the Contract relied upon, the nature and basis of the claim, the amount or extension sought, and be accompanied by relevant evidence available at the time.”
🔧 3. No Reference to Engineer’s Consultation with Contractor
Clause 2.5 jumps straight to “Engineer shall agree or determine…” — but doesn’t mention any requirement to consult with both Parties before doing so.
✅ Add a clause to mirror Sub-Clause 3.5 logic:
“Prior to making any determination under this Clause, the Engineer shall invite each Party to submit its views and supporting documents, and shall provide a reasonable opportunity for the Contractor to respond.”
This encourages procedural fairness, and minimizes disputes later.
🔵 B. Clause 20 (2017 Edition) – More Robust, But Still Has Grey Areas
Clause 20 is a much more evolved beast—but it still needs fine-tuning. Let’s see how.
🔧 1. “Became aware or should have become aware” – Ambiguity Alert 🚨
The phrase in Sub-Clause 20.2.1 says the claiming Party must notify within 28 days after becoming aware (or when it should have become aware) of the event.
🔍 But what does “should have” mean?
- Does it mean when an internal report was filed?
- When the event actually happened?
- When the finance team finally woke up?
This vagueness can lead to heated debates and disputes.
✅ Suggested Fix – Define Trigger Point in Particular Conditions:
“For Employer’s Claims, the date of awareness shall be deemed to be the date on which the Engineer records the issue, or the date a related NCR, site instruction, or correspondence is issued by the Employer’s Representative, whichever is earlier.”
This narrows down the ambiguity and reduces room for gamesmanship.
🔧 2. Contemporary Records – But Who Keeps What?
Clause 20.2.3 requires the Party to “keep contemporary records” — but FIDIC doesn’t say what kind, how detailed, or who validates them.
🔍 Real Problem:
Employer claims ₹12 lakhs due to Contractor’s alleged delay. The records? A WhatsApp message from the site supervisor. Contractor says, “Not valid.”
✅ Fix – Set Clear Record Standards in Particular Conditions:
“Contemporary records shall include dated site logs, inspection reports, approved RFI responses, Engineer’s instructions, and validated photographic or video evidence maintained daily.”
📂 Encourage digital record-keeping or shared cloud platforms for transparency (e.g., BuilderTrend, Aconex, etc.).
🔧 3. No Safe Harbor Clause for Genuine Delays in Notice
FIDIC 2017 adds a time bar (claims are barred if not notified in 28 days), but doesn’t explain what counts as a “valid reason” for delay.
This can cause serious injustice.
🔍 Example:
A government lockdown delayed site access, but Employer’s claim was issued on Day 35. Is it out? Should it be?
✅ Fix – Add “Excusable Delay” Clarification:
“Where the Employer fails to give notice within 28 days, the claim shall not be barred if the delay is due to force majeure, lack of access to records beyond the Employer’s control, or other circumstances the Engineer deems reasonable.”
This aligns with Golden Principle 5: “Contract must be enforceable under applicable law” — and also with natural justice.
🪚 C. Summary Table – Problems & Fixes Side-by-Side
| Issue | Clause | Problem | Suggested Fix |
|---|---|---|---|
| No deadline for Employer claims | 2.5 (1999) | Open-ended notices | Insert 28-day time limit |
| Vague “particulars” | 2.5 (1999) | No minimum detail | Require clause basis, amount, and evidence |
| No procedural fairness | 2.5 (1999) | No right for Contractor to respond | Require Engineer to consult both Parties |
| “Should have known” ambiguous | 20.2.1 (2017) | Hard to determine start of notice window | Define trigger points in Particular Conditions |
| Records unclear | 20.2.3 (2017) | No guidance on acceptable documentation | List standard records in PC |
| Harsh time-bar with no leniency | 20.2.1 (2017) | Employer may lose genuine claim | Add “excusable delay” clause |
✍️ Sample Particular Condition You Can Use
Here’s a ready-to-use clause you could add to your Particular Conditions to improve clarity in FIDIC 2017:
“For the purpose of Sub-Clause 20.2.1, a Claim by the Employer shall be notified within 28 days of the Employer’s Representative or the Engineer becoming aware of the event or circumstance. The notice shall clearly state the basis of the Claim, the estimated amount or extension sought, and attach relevant documentation including NCRs, Engineer’s Instructions, or site photographs. The Engineer shall, before making any determination, invite the Contractor to provide its response within 7 days.”
🧠 Final Thought
“Contracts don’t fail because people don’t work hard—they fail because the rules aren’t clear when things go sideways.”
By enhancing clarity in FIDIC’s claims procedures—especially for Employer’s Claims—you build fairness, reduce disputes, and keep the project on track.
7️⃣ Final Takeaways
- Consolidation vs. Separation:
- FIDIC 1999 segregates Employer’s claims (Clause 2.5) from Contractor’s claims (Clause 20.1).
- FIDIC 2017 merges them under a single claims regime (Clause 20), reinforcing procedural equality.
- Procedural Efficiency:
- 2017’s approach encourages the Employer to be just as meticulous with notices and record-keeping as the Contractor, promoting transparency.
- Engineer’s Determination & Dispute Road:
- Both editions rely on the Engineer’s determination, followed by a dispute adjudication or arbitration process if disagreements arise.
- Practical Application:
- Employers need robust internal systems to produce timely claims and contemporary records. Contractors must stay alert for potential offsets and actively challenge any unsubstantiated claims.
- Best Practices:
- Strengthen the time-bar provisions in both editions via Particular Conditions to reduce ambiguities and potential conflict.
Reflective Note: The shift from 1999 to 2017’s single-claims process streamlines claim administration but also imposes stricter obligations on both Parties to raise claims promptly with full supporting evidence. It’s wise to integrate well-defined timelines, unambiguous notice requirements, and reference relevant local codes or standards in the Particular Conditions.
✅ Employer’s Claims Checklist: Clause 2.5 (1999) vs Clause 20 (2017)
| 📋 Action Item | FIDIC 1999 – Clause 2.5 | FIDIC 2017 – Clause 20 | ✔️ Completed |
|---|---|---|---|
| 🔹 PRE-CLAIM INITIATION | |||
| Identify the event/circumstance affecting time, cost, or entitlement | ✅ Yes | ✅ Yes | ☐ |
| Confirm contractual/legal basis for claim (refer to relevant clause, e.g., 4.1, 8.2) | ✅ Optional (Implied) | ✅ Required | ☐ |
| Determine awareness date of the event | ❌ Not required | ✅ Mandatory for triggering time bar | ☐ |
| Verify Engineer’s instructions/site records/documentation | ✅ Recommended | ✅ Mandatory (Contemporary Records) | ☐ |
| 🔹 CLAIM SUBMISSION | |||
| Prepare formal Notice of Claim to Contractor | ✅ Required | ✅ Required (20.2.1) | ☐ |
| Submit Notice within 28 days of awareness | ❌ No time bar | ✅ Time-bar applies | ☐ |
| State basis and details of claim clearly | ✅ Yes | ✅ Yes (with clause references) | ☐ |
| Attach supporting documents (photos, letters, site diaries) | ✅ Suggested | ✅ Mandatory (20.2.3) | ☐ |
| Submit Fully Detailed Claim | ❌ Not a separate step | ✅ Within 84 days of awareness | ☐ |
| Include estimate of amount/time and contractual reasoning | ✅ Yes | ✅ Yes | ☐ |
| Update claim monthly if effects are ongoing | ❌ Not required | ✅ Required (20.2.5) | ☐ |
| Submit final claim details once effects end | ❌ Not required | ✅ Required (20.2.6) | ☐ |
| 🔹 POST-SUBMISSION & DETERMINATION | |||
| Ensure Engineer initiates agreement process with Contractor | ✅ Optional | ✅ Required under Clause 3.7 | ☐ |
| Engineer invites both Parties to present views | ✅ Implied under Clause 3.5 | ✅ Explicit in Clause 3.7 | ☐ |
| Receive Engineer’s determination with reasoning | ✅ Yes | ✅ Yes | ☐ |
| Verify if determination allows deductions from Contractor payments | ✅ Yes (post-determination) | ✅ Yes (post-agreement/determination) | ☐ |
| Maintain record of all communications in claim file | ✅ Recommended | ✅ Required | ☐ |
| Monitor for any Contractor dispute under Clause 20 (1999) / Clause 21 (2017) | ✅ Yes | ✅ Yes | ☐ |
🧠 Pro Tip:
Want to convert this into a usable form for your team?
- Export to Excel or Google Sheets for field use.
- Add columns for “Responsibility” (e.g., QS, Contract Manager, Engineer) and “Due Date.”
- Automate reminders based on submission deadlines.
📄 Letter 1: Notice of Employer’s Claim – Delay Damages (Clause 2.5 – FIDIC 1999)
📌 Purpose: To formally notify the Contractor that the Employer intends to claim delay damages due to late completion.
[Employer’s Letterhead]
Date: [DD/MM/YYYY]
Ref: [Contract Ref / Project Code]
To,
The Contractor
[Contractor Name]
[Contractor Address]
Subject: Notice of Employer’s Claim – Delay in Completion of Works under Clause 2.5
Dear Sir/Madam,
We refer to the Contract dated [insert date] between [Employer Name] and [Contractor Name] for [Project Name].
Pursuant to Sub-Clause 2.5 of the Conditions of Contract (FIDIC Yellow Book 1999), we hereby notify you that the Employer considers itself entitled to recover delay damages in relation to your failure to complete the Works by the Time for Completion of [insert date].
The legal and contractual basis for this claim is as follows:
- Clause 8.2: Time for Completion
- Clause 8.7: Delay Damages
- Clause 2.5: Employer’s Claims
The period of delay is calculated from [Planned Completion Date] to [Actual/Forecast Completion Date], resulting in [X] days of delay. The applicable delay damages as per the Appendix to Tender are ₹[insert daily rate], totaling ₹[insert total claim].
We request that the Engineer reviews and determines this claim in accordance with Clause 3.5.
Please find attached supporting documentation including correspondence, progress reports, and certified delay analyses.
Yours faithfully,
For and on behalf of
[Employer Name]
[Name]
[Designation]
📄 Letter 2: Notice of Employer’s Claim – Rectification Costs (Clause 20 – FIDIC 2017)
📌 Purpose: Notify a claim for defective work costs under the structured 2017 claims procedure.
[Employer’s Letterhead]
Date: [DD/MM/YYYY]
Ref: [Contract/Package ID]
To,
The Contractor
[Contractor Name]
[Contractor Address]
Subject: Notice of Claim under Sub-Clause 20.2.1 – Rectification of Defective Work
Dear Sir/Madam,
We write to notify a claim under Sub-Clause 20.1 and 20.2.1 of the Conditions of Contract (FIDIC Yellow Book 2017) relating to the cost of rectifying defective work identified in Section A of the Project.
On [insert date], the Engineer issued Non-Conformance Report No. [NCR ID] highlighting serious deviations from the approved specifications, specifically in [describe nature of defect – e.g., substandard concrete mix, improper installation, etc.].
The Employer became aware of this issue on [insert date], and as such, this notice is submitted within the 28-day time period in accordance with Sub-Clause 20.2.1.
The legal and contractual basis for this claim is:
- Sub-Clause 7.5: Rejection
- Sub-Clause 10.2: Taking Over
- Sub-Clause 20.1–20.2.1: Employer’s Claims
We will follow this notice with the Fully Detailed Claim within 84 days per Sub-Clause 20.2.4, along with supporting documentation and cost breakdowns.
Attached:
- NCR [ID]
- Engineer’s letters dated [dates]
- Photos and inspection logs
Please confirm receipt of this notice.
Yours sincerely,
For and on behalf of
[Employer Name]
[Name]
[Designation]
📄 Letter 3: Fully Detailed Claim Submission (Clause 20.2.4 – FIDIC 2017)
📌 Purpose: To comply with the 84-day deadline after the Notice of Claim.
[Employer’s Letterhead]
Date: [DD/MM/YYYY]
Ref: [Project/Package Code]
To,
The Contractor
[Contractor Name]
[Contractor Address]
Subject: Submission of Fully Detailed Claim – Sub-Clause 20.2.4
Dear Sir/Madam,
Further to our Notice of Claim dated [insert date] submitted under Sub-Clause 20.2.1, we hereby submit the Fully Detailed Claim in accordance with Sub-Clause 20.2.4 of the Conditions of Contract (FIDIC Yellow Book 2017).
Nature of Claim: Rectification of defective waterproofing
Period of occurrence: [insert date range]
Entitlement basis:
- Sub-Clause 4.1: Contractor’s General Obligations
- Sub-Clause 7.1: Manner of Execution
- Sub-Clause 10.1: Completion of Works
Summary of Costs Incurred:
- Labour: ₹[x]
- Materials: ₹[x]
- Equipment: ₹[x]
- Engineering Supervision: ₹[x]
Total Claim Amount: ₹[insert total]
Attached documents include:
- Detailed cost sheets
- Invoices
- Engineer’s confirmation of rework
- Photos before/after rectification
- Site diary entries
We confirm that the event has now concluded and no further costs are anticipated. Kindly request the Engineer’s determination under Sub-Clause 3.7.
Yours sincerely,
[Name]
[Designation]
For and on behalf of
[Employer Name]
📄 Letter 4: Engineer’s Invitation for Agreement (Clause 3.7 – FIDIC 2017)
📌 Purpose: For the Engineer to initiate consultation before making a determination on an Employer’s claim.
[Engineer’s Letterhead]
Date: [DD/MM/YYYY]
Ref: [Eng/Claims/xx]
To,
The Employer
[Employer Name]
Cc: The Contractor
[Contractor Name]
Subject: Consultation Regarding Employer’s Claim – Sub-Clause 3.7
Dear Parties,
With reference to the Employer’s Claim submitted on [insert date] and the supporting documents received under Sub-Clause 20.2.4, the Engineer intends to proceed with a determination in accordance with Sub-Clause 3.7 of the Conditions of Contract.
Before doing so, the Engineer hereby invites both Parties to present their views and any further submissions they wish to make. Kindly submit your written comments or objections (if any) within [7–14 days] of this letter.
Thereafter, the Engineer shall proceed with the determination in a fair, neutral, and reasoned manner.
Yours faithfully,
[Engineer’s Name]
Engineer under the Contract