Limitations Of Liability In ABR18 And FIDIC White Book

• Published date: 15 January 2024
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Kromann Reumert
• Author: Trine Gydemand Bielefeldt, Mia Thulstrup Gedbjerg and Cecilie Anthony Berno Hald

FIDIC White Book (FWB) and ABR18 both provide a basis for consultancy contracts in construction projects. FIDIC's contract system is often used if the construction project involves foreign players, ensuring that the parties have a common contractual frame of reference. The limitation of the consultant's liability is an important element to consider when deciding what basis of agreement to go with - but what does it mean for the consultant if the basis of agreement is FWB?

In which areas is FIDIC used?

FIDIC, short for Fédération Internationale des Ingénieurs-Conseils, has issued international standardised contracts for the construction industry since 1957. Widely used and recognised across national borders, FIDIC contracts are typically used on major construction projects where multiple international parties are working together.

That way, the parties will not generally need to concern themselves with national construction law regimes. If it is a Danish project or client, the background law will probably be Danish. If the agreement stipulates a different choice of law, the parties should consult a lawyer qualified to advise on the local interpretation of FIDIC terms and concepts.

In which areas is ABR18 used?

General Conditions for Consultancy Services for Building and Construction Works (ABR18) is the Danish counterpart to a set of standard terms and conditions used in contracts for technical consultancy services. ABR18 is well-known in Denmark and indeed in Scandinavia as a whole, with also Norway and Sweden applying similar sets of national standard terms and conditions. For international contracts for technical consultancy, however, FWB will often be the better choice.

Which provisions govern the limitations of liability?

There are separate provisions for limitations of liability in both ABR18 and FWB. ABR18 prescribes both a limitation of liability regarding daily penalties for delay and a general limitation of liability, whereas FWB prescribes a general limitation referred to simply as the "Limit of Liability".

The following discusses differences and similarities between the two sets of rules.

Under ABR18, the consultant is exempt from liability for 'any loss of business, loss of profit or other indirect loss'. FWB contains a similar limitation of liability, although it does also offer exemplifications, listing e.g. 'loss of contracts' and 'loss of use'. In terms of the range of losses for which a consultant may incur liability, there are no...