Construction costs are escalating. Under existing contracts, an employer will not want to pay more for the works. But forcing a contractor to perform works that are unprofitable or causing a massive loss is unlikely to be in the best interests of the project. It may result in the insolvency of the contractor forcing the employer to abandon the contract or re-let it, probably at a premium. Is a mechanism for cost adjustment, such as FIDIC 1999 Sub-Clause 13.8 [Adjustments for Changes in Costs], an answer?
“Exceptional Events” has replaced “Force Majeure” and the provision is now clause 18 rather than clause 19 but otherwise little has changed. FIDIC appear to have decided that the term “force majeure” brought with it too much baggage for those using it in civil law jurisdictions. Many users have pre-conceptions about what force majeure is and is not and perhaps did not consider what FIDIC meant by the term. With the new term, users should approach the provision with a more open mind.