BAHIR DAR UNIVIRSITY
BAHIR DAR INSTITUTE OF TECHNOLOGY
FUCULITY OF CIVIL AND WATER RESOURCE ENGINEERING
Department of Construction Technology & Management
CONTRACT AND BUSINESS LAW ASSIGNMENT
By : Ebrahim A.
Prepared by:- Ebraim A.(Bsc)
CONTENTS
 Introduction
Major differences
Duty and power of engineer
Dispute resolution
 Price adjustment
 Termination
 Claim
 Monthly payment
 Advance payment
 Performance security
Prepared by:- Ebraim A.
The first ever conditions of contract in Ethiopia is prepared
by MoUDH in July 1959.
2nd condition introduced by BaTCoDA in December 1987
 MoWUD enacted in December 1994
PPA issued in January 2006 and then amended in 2011
FIDIC was founded in 1913, are more consistent wording,
with improved clarity; user-friendly format and layout.
Prepared by:- Ebraim A.(Bsc)
Major difference of MoUDH, BaTCoDA MoWUD, PPA &
FIDIC
1. Duties and Powers of the Engineer:
 MoUDH 1959, the government is an Employer and acts also as an
Engineer through its representative
 BaTCoDA 1987 & MoWUD 1994, the Engineer requires the
specific approval of BaTCoDA MoWUD
 wording are similar to BaTCoDA 1987 & MoWUD 1994 except
their difference in percentage, Where the cumulative time
extension granted under clause 44 exceeding (15%,25 % )of the
Contract Time, variation exceeding 52(3) (15%,10%)
 PPA 2011 Engineer will decide any contractual matter without
approval of any public body Except restricted in SCC
 FIDIC 1999 The Engineer shall carry out the duties specified in the
Contract, unless required for approval in particular condition
Prepared by:- Ebraim A.(Bsc)
Major difference of MoUDH, BaTCoDA MoWUD, PPA
& FIDIC
2. Dispute resolution
MoUDH 1959- MoUDH authority(representative) final (if
fraudulent) court
BaTCoDA 1987- Engineer
BaTCoDA final & binding
MoWUD 1994- Engineer(90 days)
appeal(90 days)
MoWUD final & binding
PPA 2011- Engineer & the Contractor's Contract Manager
senior representatives (28 day amicable)
courts
Public Bodies are allowed by law to proceed to arbitration
FIDIC 1999- Engineer(84 day)
amicable(56 day)
arbitration
Prepared by:- Ebraim A.(Bsc)
……….continued
3. Price Adjustment
MoUDH 1959 - not mentioned
BaTCoDA 1987 - allowed on the difference between basic
prices & market prices of the materials and goods listed in
the appendix to the BoQ , Also address the inconsistency
of the market prices
MoWUD 1994 - assume the market to be a stable one, do
not explicitly address an increase or decrease in cost of
labor or materials with respect to the country’s market
 PPA 2011 allowed after twelve (12) months from the
effective date of the Contract where the contract period
more than 18 months Prepared by:- Ebraim A.(Bsc)
……….continued
FIDIC (1999) - Adjustments shall be made in respect of rise or fall
in the cost of local labor and specified materials
4. Termination
 MoUDH 1959 – government terminate, When the contractor
fails to execute works, replace rejected material & paid below
agreed wages. Nothing cite how contractor terminate
 BaTCoDA 1987 and MoWUD 1994 - employer to expel the
contractor after giving (14 days) notice on account of default.
contractor terminate on the employer’s default after giving (30
days) notice.
 Employer may, at any time, sell any of the said Constructional
Plant, Temporary Works and unused materials towards the
satisfaction of any sums due to him from contractor under
contract
Prepared by:- Ebraim A.(Bsc)
……….continued
 PPA – employer terminate by giving (30 days) notice when
contractor fails to execute, remedy of failure, bankrupted,
unable from force majors(more than 60 days) except sole
discretion(60 days notice needed). Contractor terminate by
giving (30 days) notice, when employer fails to pay and
breach of material obligation within 45 days noticed by
contractor & suspended more than 180 days.
 FIDIC - employer terminate by giving (14 days) notice when
Engineer think contractor fails to commence, proceed
work, repudiated & neglect his obligation with out engineer
instruction. Contractor terminate by giving (30 days)
notice, when employer fails to pay, refusing after 28 days
Engineer provide certificate, bankrupted & face unforeseen
economic reason
Prepared by:- Ebraim A.(Bsc)
……….continued
5. Claim Procedures
MoWUD 1994 - Send to engineer every month all claims,
No final or interim claim for payment for any expense will
be considered which has not been included in such
particulars
PPA 2011 - give to the Engineer notice(15 days) after
contractor known but not more than 60 days unless agreed
by the engineer
FIDIC 1999 - give to the Engineer notice(28 days) after 1st
claim arise, contemporary record & substantiate claim. if
fail to substantiate then by satisfaction of engineer or
arbitrator
Prepared by:- Ebraim A.(Bsc)
……….continued
6. Way of monthly payment
 MoWUD - The Contractor will be paid monthly, within 30
days after engineer provided certificate including
materials on site & subjected to retention(10%) and
reduce to 5% after completion of work and due after
expiration of defect liability period.
 PPA – contractor submit monthly interim payment. Within
receipt 30 days engineer approved or amend, on
determination of amount due within the same 30 days
deadline, issue & transfer to employer, subject to retention
in SCC but not more than 10%
 FIDIC1999 – after receipt of 28 days engineer transfer
certificate to employer and subject to retention(Appendix
to tender)
Prepared by:- Ebraim A.(Bsc)
……….continued
7. Advance Payment
 MoWUD 1994 and BaTCoDA 1987It has no explicit
provision
 PPA 2011- l not exceed 30% shall use only to pay for
Equipment, Plant, Materials, and mobilization expenses,
misuse any portion of the advance payment, it shall
become due & repayable immediately and no further
advance payment.
 FIDIC 1999 - An advance payment of the amount stated
in the Appendix to tender paid, performance security
provided, repaid by way of reduction in Interim Payment
Prepared by:- Ebraim A.(Bsc)
…..continued
 MoWUD 1994 and BaTCoDA - enter into a Bond with 30
days after the receipt of the letter of Acceptance(10%)
institution providing such Bond shall be domiciled and
licensed to do business in Ethiopia and subject to Employer
approval & reduced to 5% after completion of work
 PPP – provide in 15 days, the amount stated in SCC
 FIDIC- provide in 28 days, entity should be registered &
Prepared by:- Ebraim A.(Bsc)
licenced in a country . Approved
by employer
CONCLUSSION
MoUDH 1959- best in Substantial Completion(98%) but
allows modifying contract it may lead to dispute BaTCoDA
& MoWUD omit additional payment and only permit time
extension , MoWUD omit Advance Payment and Price
Escalation PPA has NCB and ICB . For work, good, service
but unsuitable for large and complex projects such as
Complex works, large water treatment plants, Works over
US$10 million; Works designed by the contractor, including
turnkey contracts
FIDIC best for projects not suitable for local projects to
avoid the risks, most convenient form of contract
Prepared by:- Ebraim A.(Bsc)
THANK YOU
Prepared by:- Ebraim A.(Bsc)