👉🏻Changes in Law – It is a very common scenario in both the common law and civil law jurisdictions that result in substantial damages incurred by the Contractors. FIDIC form of Contract provides remedy via Clause 13.6 as follows: (fidic Redbook 2017 edition)

Sub clause 13.6 – Adjustments for Changes in Laws –

👉🏻This sub-clause has been extended and made more explicit than the comparable clause of the First Edition. ‘The Contract Price shall be adjusted to take account of any increase or decrease in Costs resulting from change in:’

(a) the Laws of the Country (including changed laws and new laws) (b) the judicial or official government or implementation of Laws in (a) above

(c) changes in any permit, permission, licence, or approval as described in Sub-Clause 1.13 (compliance with Laws), which are obtained by the Employer or Contractor

(d) changes in the requirements for any permit, permission, licence, or approval which are obtained by the Contractor made and/or published after the Base Date.

👉🏻The Employer and/or the Contractor shall give Notice to the Engineer of any adjustments required with detailed particulars.

👉🏻If the Contractor suffers delay or incurs an increase on Cost resulting any change in Laws, the Contractor shall be entitled to Extension of Time (EOT) and/or payment for such cost, subject to Sub Clause 20.2.

👉🏻To comply with the various time limitations imposed by Sub-Clause 20.2, it is most important that the Contractor promptly obtains information concerning changes in law having an effect on the Contract Price.

👉🏻It should not be overlooked that changes in law can occur in the period between the Base Date and the award of Contract when the Contractor may not have a presence in the country.

👉🏻Should the validity of tenders be extended, there is an increasing likelihood of new legislation affecting the Contract Price being promulgated.

👉🏻Most changes in legislation require a formal authorisation by Parliament or a state authority of similar status. The authorisation typically appears within a state publication, and it is recommended that the Contractor makes a subscription to such a publication if available.

👉🏻In the preparation of his tender, the Contractor may have already established rates and prices at the Base Date. Evidence of these rates and prices will be required in order to quantify the consequences of any subsequent changes in law.

👉🏻Finally, it is to be noted that there may be a partial overlap between the entitlements due under this sub-clause and the entitlements due under Sub-Clause 13.8 (Adjustment for Changes in Cost). An appropriate adjustment is required.