Errors in the Employer’s Requirements (“ER”) are a recurring source of disputes in international construction projects governed by International Federation of Consulting Engineers (“FIDIC”) contracts. These requirements define the project’s technical and functional criteria, and errors can have significant legal and financial consequences for both employers and contractors.
This note examines how such errors are treated under the FIDIC Yellow and Silver Books, analyses arbitral interpretations, and offers practical drafting recommendations.
What Are the Employer’s Requirements?
According to the FIDIC Yellow Book, which provides conditions of contract for contractor design contracts, and the Silver Book, which concerns Engineering,[1] Procurement, and Construction turnkey projects, the Employer’s Requirements are “the document entitled employer’s requirements, as included in the Contract, and any additions and modifications to such document in accordance with the Contract. Such document describes the purpose(s) for which the Works are intended, and specifies Key Personnel (if any), the scope and/or design and/or other performance, technical and evaluation criteria, for the Works.”[2]
The ER are sometimes described as an “output specification” because they set out the purpose(s) for which the works are intended upon completion, and the contractor then designs the works to achieve this purpose. This differs from the traditional “input specification” contract form, as under the Red Book, where the contractor simply builds the works designed by the employer/engineer.[3]
Commentators have noted that “[t]he drafting of the employer’s requirements document itself has proved, in practice, to be the main source of success or failure of the project and of the disputes that arise in projects under this form of contract.”[4] For this reason, they have encouraged employers to consider the following factors when drafting their requirements:
- Completeness without bias
- Requirements should cover all parameters (shape, type, quality, tolerances, standards, safety, whole-life cost, etc.).
- They must not be so strict that they unfairly favour a specific design and stifle contractor innovation.
- Precision with flexibility
- Requirements should be precise enough to define what is needed.
- They should remain flexible to allow for the contractor’s expertise and inventive input.
- Demanding but proportionate
- Requirements should be challenging enough to select the most suitable contractor.
- They should not force tenderers to provide excessive information at the bidding stage.
- Fair competition and comparability
- Requirements should allow all tenderers equal opportunities to propose efficient, cost-effective designs.
- They must be precise enough to permit comparative evaluation of tenders.
- Realistic purpose definition
- Special care should be given to wording regarding the project’s purpose.
- Expectations should be realistic, considering contractors’ reluctance to accept fitness for purpose provisions and the potential for high costs/delays in tenders.
- Consistency and thoroughness
- Requirements should cover all matters referred to in the general (and particular) conditions of contract.
- They must be checked to ensure no direct or indirect conflicts or inconsistencies exist in the technical requirements.[5]
Given the delicate balance required by the contents of the ER, it is unsurprising that they often give rise to errors.
Legal Consequences of Errors
What happens when there is an error in the ER? The legal consequences depend on the FIDIC form and the allocation of risk under the contract.
Yellow Book
Under Sub-Clause 1.9 of the Yellow Book, titled “Errors in the Employer’s Requirements”, if an error in the ER causes delay or additional cost, and could not have been discovered by an experienced contractor exercising due care, the contractor may be entitled to a remedy:
If the Contractor finds an error, fault or defect in the Employer’s Requirements as a result of scrutinising them under Sub-Clause 5.1 [General Design Obligations], the Contractor shall give a Notice to the Engineer within the period stated in the Contract Data (if not stated, 42 days) calculated from the Commencement Date.
If, after expiry of this period, the Contractor finds an error, fault or defect in the Employer’s Requirements, the Contractor shall also give a Notice to the Engineer describing the error, fault or defect.
The Engineer shall then proceed as specified under Sub-Clause 3.7 [Agreement or Determination] to agree or determine:
(a) whether or not there is an error, fault or defect in the Employer’s Requirements;
(b) whether or not (taking account of cost and time) an experienced contractor exercising due care would have discovered the error, fault or other defect:
when examining the Site and the Employer’s Requirements before submitting the Tender; or
if the Contractor’s Notice is given after the expiry of the period stated in the first paragraph of this Sub-Clause, when scrutinising the Employer’s Requirements under Sub-Clause 5.1 [General Design Obligations]; and
(c) what measures (if any) the Contractor is required to take to rectify the error, fault or defect.
(and, for the purpose of Sub-Clause 3.7.3 [Time limits], the date the Engineer receives the Contractor’s Notice under this Sub-Clause shall be the date of commencement of the time limit for agreement under Sub-Clause 3.7.3).[6]
Notice
Notice is a very important element of making a claim for errors in the ER. Notice of the error must be given to the Engineer within 42 days (if another period is not specified) from the Commencement Date. (Note: The 2017 Yellow Book distinguishes between errors in the items of reference (original survey control points, lines and levels of reference) identified in the ER, for which notice must be given according to Clause 4.7, i.e., within 28 days from the Commencement Date, and other errors in the ER, for which the requirements outlined in Sub-Clause 1.9 still apply.[7])
The notice must allow the Engineer to determine three things:
- That there is an error in the Employer’s Requirements;
- That the error would not have been discovered by an experienced contractor exercising due care;
- When examining the Site and the Employer’s Requirements before submitting the Tender, if notice is submitted during the 42-day period; or
- When scrutinising the Employer’s Requirements under Sub-Clause 5.1 (i.e., during the 42-day period), if notice is submitted after the 42-day period; and
- What measures (if any) to take to rectify the error.
While there are few public awards dealing with the criteria under Sub-Clause 1.9, those that are available help shed light on how these criteria can be interpreted.
Errors in the Employer’s Requirements
With regard to the first element, in practice, tribunals have come to different conclusions as to the scope of what parts of the ER can contain errors for the purposes of Sub-Clause 1.9.
For example, in Archirodon v. General Company for Ports of Iraq, a 2019 ICC case, the tribunal considered that not everything contained in the ER document can be subject to error. In this case, the claimant claimed, inter alia, that the ER contained errors regarding the soil profile and geotechnical parameters of the Site within the meaning of GC Sub-Clause 1.9 of the Contract, which an experienced contractor would not have discovered when scrutinising the ER.[8]
The tribunal noted that in order to make a claim for an error in the ER, the claimant must be able to show that the information contained in the provision at issue “was information to which the Sub-Clause 1.9 was intended to apply.” It further specified that it was not sufficient for the claimant to show that the provision was contained within the ER, but “[i]t must go further and show that [the provision] contained information concerning the design or technical criteria for the works with which it was required to comply.” It reasoned that this was “apparent from the definition of the term ‘Employer’s Requirements’ contained in GC Sub-Clause 1.1.1.5 which states that those requirements: ‘…specifies the purpose, scope, and/or design and/or other technical criteria for the Works.’”[9] Therefore, according to the tribunal, where a provision is contained in the ER but does not specify the purpose, scope, design or other technical criteria for the works, it is not within the ER for the purposes of Sub-Clause 1.9.
The tribunal held that the allegedly erroneous provision was simply a summary description of existing site investigation data – not a design requirement or technical criteria with which the claimant was required to comply.[10]
In GUCP v. ACP, a 2020 ICC case, on the other hand, the tribunal disregarded the respondent’s argument that Sub-Clause 1.9 refers only to errors in actual requirements (i.e., prescriptive language) set by the Employer in the Employer’s Requirements in favour of the claimant’s position that “any error in the document entitled ‘Employer’s Requirements’” would suffice.[11] It found that an error in an environmental impact assessment, incorporated by reference into the ER, could give rise to a claim under Sub-Clause 1.9.[12]
When it comes to the errors themselves, where the ER do not definitely prescribe something for the Contractor, it may be unlikely that an error will be found.
In GUCP, where the claimant argued that the employer had made an error indicating that certain basalt at the construction site was suitable for making concrete aggregates, the tribunal found that there was no error in the ER because the statements made therein were vague enough, containing words like “potential” and “mainly” (as opposed to exclusively), and suggested that the tenderers would need to determine for themselves the suitability of using the excavated materials for aggregates and backfill.[13] The tribunal also found that describing the basalt as “good” was very general and subjective and not synonymous with “suitable for crushing into concrete aggregates” and therefore not necessarily in error.
Further, the tribunal held that even if the ER had indicated that the PLE Basalt was suitable for the production of aggregates, this was not an error because the basalt was indeed suitable for the production of aggregates, although at additional time and cost. The tribunal reasoned that the ER said nothing about the costs that could be expected when processing the basalt.[14]
It thus appears that there is a high bar set for claimants attempting to show that a provision in the ER is an error and that employers may be able to protect themselves by remaining somewhat vague in the terms of the ER.
Experienced Contractor Exercising Due Care
In order for a claimant to prove the second element, it is not enough to show that the highly experienced contractors taking part in the bidding process did not find any errors.
In GUCP v. ACP, the claimant attempted to argue that this element should be determined simply by looking at what the four contractors bidding on the project did or did not discover during the tender phase, since they all consisted of highly experienced international EPC contractors and thus their conduct would be demonstrative of Prudent Industry Practices.[15] However, the tribunal recognised that, while this is very relevant evidence, “an objective approach must be taken to this element which refers to a hypothetical and objective ‘experienced contractor’.”[16]
Remedies in Case of Error
If, despite these difficulties, a contractor successfully proves an error in the ER, it may be entitled to a variation under Sub-Clause 13.3.1 (Variation by Instruction) and the remedies available under Sub-Clause 20.2 (Claims for Payment and/or EOT), including:[17]
- Extension of Time: An extension of the time for completion.[18]
- Additional Cost: All expenditure reasonably incurred (or to be incurred) by the contractor in performing the contract, whether on or off the site, including taxes, overheads and similar charges.[19]
- Profit: The applicable percentage for profit stated in the contract data (if not stated, five percent (5%)).[20]
Thus, Yellow Book Sub-Clause 1.9, though setting a high standard for recovery, can be an effective tool for protecting contractors from mistakes of the employer by entitling them to an extension of time and compensation should they suffer delay or loss as a result.
The engineer’s determination can then be challenged before a Dispute Adjudication (/Avoidance) Board and then in arbitration, if necessary, as detailed in our prior note on FIDIC dispute resolution.
Silver Book
The position is markedly different under the Silver Book, where risk for Employer’s Requirements essentially transfers to the contractor, who is unable to seek an extension of time or costs for errors in the ER, absent specific circumstances.
Sub-Clause 5.1 provides that the contractor is assumed to have scrutinised the ER and that the employer is not to be responsible for any error, inaccuracy or omission of any kind in the ER, unless one of the exceptions set out in Sub-Clause 5.1(a)-(d) applies.[21]
These exceptions are:
- Where portions, data or information are stated in the contract to be immutable or the responsibility of the employer; or
- Where the issue concerns definitions of intended purposes of the works or any parts of them; or
- Criteria for the testing and performance of the completed works; or
- Where portions, data and information cannot be verified by the contractor unless the contract otherwise provides.[22]
Thus, the risk under the Silver Book is shifted almost entirely to the contractor for errors in the ER, unless expressly stated in the contract or another exception applies.
Another peculiarity of the Silver Book is that it does not include any role for the engineer, so claims are made directly to the other party.[23]
Conclusion
Errors in the ER can fundamentally alter the risk allocation and lead to costly disputes. FIDIC contracts, supported by arbitral case law and doctrinal commentary, provide a structured framework for addressing such errors, but success depends on clear drafting, diligent contract administration, and strict procedural compliance. To minimise the risk of errors and disputes, practitioners should:
- Draft ER with clarity and precision.
- Ensure all risk allocations and changes to roles are made in the Particular Conditions, not the ER.
- Incorporate all clarifications and agreements into the contract with defined precedence.
- Regularly review and update the ER based on lessons learned and quality management processes.
- Select the appropriate FIDIC form for the project’s characteristics and risk profile.
Both employers and contractors should also be aware of the type of contract that they are signing with regard to which party bears the risk for errors – typical Yellow Book contracts allow contractors to seek remedies for errors, while under the Silver Book, they must bear the risk for errors.
Ultimately, understanding how errors in the Employer’s Requirements are treated under FIDIC contracts enables parties to strike a fairer balance between innovation, risk, and accountability.
[1] E. Baker & R. Major, Over the rainbow: FIDIC’s Second Edition Red, Yellow and Silver Books, https://globalarbitrationreview.com/guide/the-guide-construction-arbitration/sixth-edition/article/over-the-rainbow-fidics-second-edition-red-yellow-and-silver-books (last accessed 16 October 2025).
[2] FIDIC Yellow Book 2017, Sub-Clause 1.1.1.5; FIDIC Silver Book 2017, Sub-Clause 1.1.1.3.
[3] N. Bunni, The FIDIC Forms of Contract (3rd edn., 2005), p. 553.
[4] Ibid., p. 554
[5] Ibid., p. 554-555.
[6] FIDIC Yellow Book 2017, Sub-Clause 1.9.
[7] W. Godwin, The 2017 FIDIC Contracts (2020), pp. 59-60
[8] Archirodon Construction (Overseas) Company Limited (formerly known as Archirodon Construction (Overseas) Company S.A.) v. General Company for Ports of Iraq, ICC Case No. 21785/ZF/AYZ, Partial Final Award, 4 June 2019, para. 440.2
[9] Ibid., para. 603.
[10] Ibid., para. 604.
[11] (1) Grupo Unidos por el Canal, S.A., (2) Sacyr, S.A., (3) Webuild, S.p.A. (formerly Salini-Impregilo S.p.A.), (4) Jan De Nul, N.V. v. Autoridad del Canal de Panamá (II), ICC Case No. 20910/ASM/JPA (C-20911/ASM), Partial Award, 21 September 2020, para. 944.
[12] Ibid., para. 955.
[13] Ibid., para. 967.
[14] Ibid., para. 959.
[15] Ibid., para. 947.
[16] Ibid.
[17] FIDIC Yellow Book 2017, Sub-Clauses 1.9, 13.3.1, 20.2.
[18] Ibid., Sub-Clause 1.1.38.
[19] Ibid., Sub-Clause 1.1.19.
[20] Ibid., Sub-Clause 1.1.20.
[21] W. Godwin, The 2017 FIDIC Contracts (2020), p. 8; N. Lalla, Perils of the Silver Book: contractors beware, 15 May 2013, https://www.lexology.com/library/detail.aspx?g=56be359b-aa01-4e80-bd44-045caba1f179 (last accessed 17 October 2025).
[22] W. Godwin, The 2017 FIDIC Contracts (2020), pp. 57-58.
[23] R. McCrea, The 2017 FIDIC dispute resolution procedure: Part 1 – the new dispute resolution mechanism, https://www.fenwickelliott.com/sites/default/files/rm_-_the_2017_fidic_dispute_resolution_procedure_part_1.pdf (last accessed 17 October 2025), p. 3.