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http://dx.doi.org/10.12652/Ksce.2018.38.3.0497

Study on the Application of Retention Money in the FIDIC Conditions of Contract 1999 Edition  

Hyun, Hak Bong (Cplus International Co., Ltd.)
Park, Hyung Keun (Chungbuk National University)
Publication Information
KSCE Journal of Civil and Environmental Engineering Research / v.38, no.3, 2018 , pp. 497-503 More about this Journal
Abstract
Most of the conditions of contract applied in international construction contracts, including various conditions of contract published by FIDIC, include the provision for Retention Money which inevitably result in negative impact on cash-flow or financial burden to the contractors. In this study, fundamental reasons behind the application of Retention Money provisions are analysed and contractual mechanisms included in the FIDIC conditions of contract are searched, which include provisions for Performance Security and Defects as well as Termination, so that proper judgement can be derived on the application of Retention Money. In conclusion, considering the various contract provisions, performance security, termination of the contract by the Employer etc. included in the FIDIC conditions of contract, it is not necessary to include the provision for Retention Money.
Keywords
Retention money; FIDIC; Conditions of contract; Performance security; Defects; Termination;
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  • Reference
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2 Conditions of Contract for Design-Build and Operate Project (2008). FIDIC.
3 Conditions of Contract for EPC/Turnkey Project (1999). FIDIC.
4 AIA Document A201-2007 General Conditions of the Contact for Construction.
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7 The Export-Import Bank of Korea (2015). Trend and Issues in Global Construction Market.