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🧭 1️⃣ Purpose of Clause 11.2 – Why Does This Clause Exist?
Let’s set the scene: You’ve delivered the project. Things are looking good. But a few months later, cracks start to form in the concrete. Or perhaps the HVAC system, which passed all initial tests, suddenly begins to underperform. Naturally, the Employer wants it fixed. But the golden question is: who pays?
That’s precisely what Clause 11.2 is here for. It lays down the rules of financial responsibility when it comes to fixing defects that pop up after the works have been taken over but within the Defects Notification Period (DNP).
Essentially, this clause says:
If the defect or damage was your fault (Contractor), you pay to fix it. If not, the Employer might foot the bill through the variation process.
This clause is about assigning financial accountability fairly, based on the origin of the issue.
🕰 Historical Context and Evolution
- 🟡 FIDIC 1999: Sticks to the basics—blame rests with the Contractor for poor materials, design, or workmanship.
- 🔵 FIDIC 2017: Ups the ante. It expands liability to include subcontractors, agents, and even documentation issues like missing warranties. The Engineer plays a more active role in deciding financial responsibility when fault isn’t obvious.
👉 The shift reflects the increasing complexity of modern projects, where supply chains are vast and integrated, and responsibility is often distributed among many players.
🧩 2️⃣ Detailed Breakdown of the Clause – What Does It Actually Say?
Let’s read through the actual language of each edition and unpack the meaning line by line.
📘 FIDIC 1999 – Clause 11.2
Text:
“All work under Clause 11.1 [Completion of Outstanding Work and Remedying Defects] shall be executed at the risk and cost of the Contractor if the necessity for such work is due to: (a) the use of Plant, Materials or workmanship which are not in accordance with the Contract, (b) where the cause of the defect is attributable to the Contractor or its design, and in these cases, the Contractor shall not be entitled to payment for such work. Otherwise, Sub-Clause 13.3 [Variation Procedure] shall apply.”
🧠 What this means:
- You (Contractor) carry the cost only if the defect was because of:
- 💥 Poor materials or sloppy workmanship.
- 💡 A design flaw that’s on you.
- 🧾 If it’s NOT your fault—maybe an external event, or a change initiated by the Employer—then the fix is processed as a variation (extra work, extra money).
🔍 But notice: it’s quiet about subcontractors, suppliers, or missing documents. That opens the door to disputes about who’s to blame.
📙 FIDIC 2017 – Clause 11.2
Text:
“All work to be done by the Contractor in remedying any defect or damage under Sub-Clause 11.1 [Completion of Outstanding Work and Remedying Defects] shall be executed at the risk and cost of the Contractor if and to the extent that the necessity for such work is due to: (a) a failure by the Contractor to comply with any of the Contractor’s obligations under the Contract; or (b) a failure by any Subcontractor, or by any person for whom the Contractor is responsible, including any failure to provide or comply with warranties or guarantees required under the Contract. In any other case, the Engineer shall determine the measures (if any) to be taken to remedy the defect or damage, and shall determine the Contractor’s entitlement (if any) to payment for such work in accordance with Sub-Clause 3.7 [Agreement or Determination] and Sub-Clause 13.3.1 [Variation by Instruction].”
🧠 What this means:
- If the issue was caused by:
- 📉 A breach of any contractual duty,
- 🔧 A subcontractor’s or agent’s mistake,
- 📋 Failure to deliver or follow warranties/guarantees, … then you (Contractor) must fix it on your dime.
✅ It also introduces the Engineer as an arbiter when it’s unclear who’s to blame. That gives the clause more procedural fairness but also places significant power in the Engineer’s hands.
⚖️ 3️⃣ Key Interpretations and Implications – What Does It Really Mean for You?
✅ In the 1999 Edition:
- 🚪 The door is open to interpretation—especially around third-party liability.
- 🔍 Does not explicitly address if you’re responsible for issues caused by your suppliers.
- 🧾 Provides a clear off-ramp: if it’s not your fault, use Clause 13.3 to get paid for remedial work.
✅ In the 2017 Edition:
- 🧲 Grabs a broader net: subcontractors, suppliers, and even admin gaps (like missing warranties) pull you in.
- 🧮 No need to prove intent—simple non-compliance makes you liable.
- 📏 Introduces Clause 3.7 as a structured way to determine who pays when liability isn’t black and white.
👷♂️ Practical Risks & Benefits:
- ✅ Ensures quality and thorough documentation.
- 🚨 Higher Contractor risk if oversight of third-party roles is lax.
- 📚 Adds legal clarity and enforcement teeth—but needs robust contract and risk management on the Contractor’s side.
🔗 4️⃣ Cross-Referencing with Other Clauses – Who Else is in the Mix?
Clause 11.2 doesn’t work in isolation—it’s part of a web of related obligations and procedures across the contract. Let’s zoom in on the key supporting clauses that either directly feed into Clause 11.2 or are invoked when interpreting or acting upon it:
🔧 Clause 11.1 – Completion of Outstanding Work and Remedying Defects
This clause is like the trigger mechanism for 11.2. It says that if a defect arises during the DNP, the Contractor must rectify it. Then comes Clause 11.2, which essentially answers: Who’s footing the bill? So, think of 11.1 as the action clause, and 11.2 as the accountability clause.
💰 Clause 13.3 / 13.3.1 – Variation Procedure
In both editions, if the defect or damage isn’t the Contractor’s fault, the work may be treated as a variation. This means the Employer could cover the cost. But you can’t just assume it—there’s a procedure. You need to go through Clause 13.3, submit relevant documentation, and seek approval. In the 2017 version, the process is sharpened by linking it to Clause 3.7’s determination process.
⚖️ Clause 3.7 – Agreement or Determination (2017 Only)
This is a significant new addition in the 2017 edition. When it’s unclear whether the Contractor is to blame, the Engineer doesn’t just wave a wand. Instead, there’s a structured process where the Parties first try to agree. Failing that, the Engineer determines the cause, scope of work, and payment entitlement. It ensures more balance and avoids immediate escalation to disputes.
🤝 Clause 4.4 / 4.5 – Subcontractors
Why does this matter? Because Clause 11.2 (2017) puts the burden of subcontractor performance squarely on the Contractor. Clause 4.4 discusses general Subcontractor obligations, and Clause 4.5 addresses nominated Subcontractors. Even if a Subcontractor was nominated by the Employer, you’re still liable unless the contract says otherwise.
📋 Clause 4.9 – Quality Management and Compliance
This is where the 2017 edition starts tying things together. It stresses having a documented quality management system. If the Contractor has such a system and follows it, it can reduce risks under Clause 11.2. But if ignored, and a defect arises, it’s another ground for non-compliance.
✅ Bottom line: These cross-referenced clauses give Clause 11.2 its teeth. They define what must be done (Clause 11.1), how to assess costs (Clause 13.3), who decides disputes (Clause 3.7), how subs are managed (Clause 4.4/4.5), and how to prevent defects in the first place (Clause 4.9).
🤔 5️⃣ What-If Scenarios – Let’s Test It Out!
💭 Scenario 1: A defect arises due to bad installation by your Subcontractor.
- 1999: Could argue you’re not at fault—especially if the Subcontractor was Employer-nominated. But it’s not clear-cut.
- 2017: No debate. You’re responsible. Full stop.
💭 Scenario 2: The Employer’s late instructions lead to rushed work and eventual cracking.
- 1999 & 2017: This leans toward variation territory. Likely not your fault—Engineer’s decision may apply (in 2017).
💭 Scenario 3: You forget to submit a required manufacturer warranty, and the equipment fails.
- 1999: Possibly overlooked if not explicitly mentioned.
- 2017: 🔥 Clear liability. You failed an obligation.
💡 6️⃣ Suggestions for Clarity and Improvement – Let’s Polish It Up
Let’s take a moment to reflect on how Clause 11.2—though powerful—can be a source of confusion or even disputes if not clearly drafted or well-understood. Here’s how both the 1999 and 2017 editions can be sharpened to minimize ambiguity and support better contract administration:
🛠 For FIDIC 1999:
🔍 Issue: Ambiguity around Subcontractor liability
- The clause doesn’t directly mention whether the Contractor is responsible for their Subcontractors’ errors.
- In reality, disputes often arise over who did what—especially if the Subcontractor was nominated by the Employer.
✏️ Suggested Improvement:
- Include direct reference to Subcontractor and supplier responsibility:
“…including acts or omissions of any Subcontractor, supplier, or third party engaged by the Contractor.”
📘 Example Application:
- Suppose a valve supplied by a Subcontractor malfunctions because of poor calibration. Under the current 1999 wording, the Contractor might try to deny liability unless the Subcontractor’s failure is clearly a design fault. The revised clause removes doubt: Contractor is still liable.
🔧 Issue: Lack of administrative responsibility
- The 1999 text focuses only on design, materials, and workmanship—missing administrative duties like documentation.
✏️ Suggested Add-On:
- Add coverage for documentation failures:
“…or administrative failure to comply with Contract requirements, such as providing test reports or certificates.”
📘 Example:
- The Contractor fails to submit a factory test report. Later, the component fails. The Employer shouldn’t have to pay for this.
🛠 For FIDIC 2017:
📝 Issue: The phrase “any of the Contractor’s obligations” is overly broad
- While comprehensive, it can lead to overly cautious or risk-averse interpretations.
✏️ Suggested Clarification:
- Provide examples to guide interpretation:
“…including but not limited to obligations relating to supervision, testing, documentation, safety compliance, and environmental protection.”
📙 Example:
- A Contractor fails to conduct a post-installation pressure test. Later, a pipe bursts. Even though there was no workmanship issue, the obligation to test was missed—liability applies.
🧾 Issue: No explicit tie-in to quality systems
- Though Clause 4.9 addresses quality, it’s not clearly linked here.
✏️ Suggested Linkage:
- Add a cross-reference to Clause 4.9:
“…including failure to implement or comply with the Contractor’s Quality Management System under Clause 4.9.”
📙 Example:
- The Contractor’s internal inspections were skipped, leading to undetected defects. This omission directly triggers Clause 11.2 liability.
🔍 Issue: Engineer’s discretion may feel one-sided
- While Clause 3.7 provides a structured process, not all Contractors understand how to use it to challenge decisions.
✏️ Suggested Best Practice:
- Clarify in training and contract guidance documents how and when to invoke Clause 3.7, and what kind of documentation supports your case.
📙 Example:
- If a dispute arises about the root cause of a cracked foundation, the Contractor should present test results, correspondence logs, and site records under Clause 3.7 to argue for payment entitlement.
🧾 7️⃣ Final Takeaways – Wrapping It All Up
| 🧠 Insight | 💡 Takeaway |
|---|---|
| 🎯 Broader Liability | The 2017 version makes you responsible for a wider range of risks—especially from others in your supply chain. |
| 📈 Contractor Discipline | More pressure to manage warranties, documentation, and third-party actions. |
| 🧑⚖️ Engineer’s Role | In 2017, the Engineer plays judge—reviewing and deciding when it’s unclear who’s at fault. |
| 🧰 Best Practices | Stay organized, stay proactive, and keep a close eye on Subcontractors. |
| ✍️ Drafting Advice | Tailor Particular Conditions to define boundaries clearly, reduce ambiguity, and reflect your risk appetite. |
📋 Clause 11.2 Compliance Checklist
Here’s a handy checklist for project teams and contract administrators to ensure alignment with Clause 11.2 expectations:
| Task/Responsibility | Description | Completed |
|---|---|---|
| Subcontractor Review | Have all Subcontractors been vetted and approved according to contractual obligations? | ☐ |
| Quality Documentation | Are all test certificates, warranties, and guarantees submitted and stored properly? | ☐ |
| Design Accountability | Is there a clear allocation of design responsibility in contract documents and records? | ☐ |
| Inspection Records | Are internal inspection logs maintained in accordance with Clause 4.9 requirements? | ☐ |
| Variation Readiness | Is there a process in place for identifying and documenting remedial work that qualifies as a variation? | ☐ |
| Clause 3.7 Protocol | Are project teams trained on how to invoke and support a determination under Clause 3.7? | ☐ |
| Defect Cause Documentation | Are there procedures for documenting root cause analysis of defects to determine cost liability? | ☐ |
| Employer Instructions | Is there a log of Employer instructions that may have led to defects or influenced the works? | ☐ |
| Warranty Follow-up | Is someone assigned to track compliance with submitted warranties and guarantees post-completion? | ☐ |
📩 Sample Letter 1: Employer Notifying Contractor to Remedy Defect at Contractor’s Cost
Scenario: Defect caused by the Contractor’s faulty workmanship or non-compliant materials.
[Employer’s Letterhead]
[Date]
To: [Contractor's Name]
Subject: Notice to Remedy Defect under Clause 11.2
Dear [Contractor’s Representative],
We write to notify you of a defect identified in the Works under the Contract dated [Insert Contract Date], specifically:
[Brief description of the defect — e.g., “deflection of steel beam at Gridline B-3 in the main roof structure”].
Following inspection and evaluation, it appears that the defect has arisen from non-compliant workmanship and/or materials not in accordance with the Contract requirements.
In accordance with **Clause 11.2 [Cost of Remedying Defects]**, you are required to undertake the necessary remedial measures at your own cost and risk.
Kindly submit your proposed schedule and method of rectification within **7 days** of this notice.
Yours sincerely,
[Name]
[Title]
[Employer's Name]
📩 Sample Letter 2: Contractor Requesting Variation for a Defect Not Attributable to Them
Scenario: Defect is not the Contractor’s fault — for example, due to Employer-supplied components or unforeseen circumstances.
[Contractor’s Letterhead]
[Date]
To: [Engineer’s Name / Employer]
Subject: Notice of Defect and Request for Variation under Clause 11.2
Dear [Engineer/Employer],
This is to notify you of a defect observed on [Insert Date], in the following part of the Works:
[Description of the issue — e.g., “failure of embedded conduit cast within the east wing slab”].
Upon preliminary investigation, we believe the defect was caused by [e.g., “improperly specified materials supplied by the Employer” / “unanticipated soil movement”].
As this is not attributable to any breach of our obligations, and in accordance with **Clause 11.2** and **Clause 13.3** of the Contract, we respectfully request instruction from the Engineer regarding the remedial scope, and submit this as a claim for Variation.
Please advise on next steps, including payment terms for executing the remedial work.
Yours faithfully,
[Name]
[Title]
[Contractor's Company]
📩 Sample Letter 3: Contractor Disputing Engineer’s Determination (2017 Edition)
Scenario: Contractor disagrees with Engineer’s determination that the defect is their responsibility under Clause 3.7.
[Contractor’s Letterhead]
[Date]
To: [Engineer’s Name]
Subject: Dispute of Determination under Clause 3.7 Related to Clause 11.2
Dear [Engineer],
We refer to your determination dated [Insert Date] regarding the cost liability for rectifying the defect identified on [Insert Date/Location].
We respectfully disagree with your conclusion that the defect is the result of a failure by the Contractor or its Subcontractor.
In support of our position, we submit the following documentation for your reconsideration:
- [List key documents: inspection reports, material delivery records, subcontractor reports, third-party test results, etc.]
In accordance with **Sub-Clause 3.7.5** and the provisions of **Clause 11.2**, we request a reconsideration of the determination. Should no agreement be reached, we reserve the right to proceed through the dispute resolution process as set out in the Contract.
Yours sincerely,
[Name]
[Title]
[Contractor's Name]
📩 Sample Letter 4: Employer Requesting Update on Progress of Remedial Works
Scenario: Contractor has acknowledged defect but has not provided progress update or remedy timeline.
[Employer’s Letterhead]
[Date]
To: [Contractor’s Name]
Subject: Request for Update on Remedial Works – Clause 11.2
Dear [Contractor],
Further to our letter dated [Insert Reference Date] concerning the defect located at [Insert Location], we have yet to receive your proposed timeline or execution method for the required remedial works.
As the defect falls under your responsibility pursuant to **Clause 11.2**, we remind you of your obligation to promptly remedy the defect at your cost.
Kindly provide a full progress update within **3 days**, including the expected date of completion and any measures taken to prevent recurrence.
Yours faithfully,
[Name]
[Title]
[Employer Name]
📩 Sample Letter 5: Contractor Notifying Employer of Subcontractor-Related Defect
Scenario: Contractor identifies defect caused by a Subcontractor and acknowledges their liability per Clause 11.2 (2017).
[Contractor’s Letterhead]
[Date]
To: [Engineer / Employer’s Name]
Subject: Notice of Subcontractor-Related Defect and Remedial Measures
Dear [Engineer / Employer],
We hereby notify you of a defect discovered on [Insert Date] in [Description of Works]. The cause of the defect has been traced to the performance of [Subcontractor’s Name], specifically:
[Describe defect — e.g., “poor cable termination in control panel 3B”].
In accordance with our obligations under **Clause 11.2**, and recognizing that the Subcontractor falls under our responsibility, we confirm that we will carry out the necessary corrective actions at our own cost.
Please find attached our proposed method statement and remedial work schedule for your review and comment.
Yours faithfully,
[Name]
[Title]
[Contractor Name] 
