INTERNATIONAL PRINCIPLES ON CONSTRUCTION AND ENGINEERING CONTRACTS

Study LXXXVIII – UNIDROIT-FIDIC Joint Project on the Development of International Principles on Construction and Engineering Contracts

Construction and other related contracts such as engineering contracts are among the most used in international trade as well as within national boundaries. Despite the existence of widely used model contracts and clauses at the international level, in particular the ones developed by the International Federation of Consulting Engineers (FIDIC), the law applicable to such contracts is fragmented and not always adapted to the needs of the sector. Several legal systems do not possess a sufficiently developed law to deal with construction and engineering contracts, particularly (but not exclusively) when applied to an international context.

On 4 April 2025, the UNIDROIT Secretariat received a proposal from FIDIC for the 2026-2008 Work Programme to undertake a joint project on the development of international principles on construction and engineering contracts (the UNIDROIT-FIDIC Joint Project). See Unidroit 2025 – C.D. (105) 4 rev. The proposal concerned the development of international legal principles and rules in the form of a soft law instrument to address identified gaps in the international context.

At its 85th session held on 11 December 2025, the UNIDROIT General Assembly endorsed by consensus the Governing Council’s recommendation to include in the 2026-2028 Work Programme the UNIDROIT-FIDIC Joint Project, with high priority status. See Unidroit – A.G. (85) 3 and Unidroit 2025 – A.G. (85) 14.

The goal of the project is to improve the international legal framework for the construction and engineering sector, addressing specificities of construction and engineering contracts and supplementing the general contractual principles of the Unidroit Principles of International Commercial Contracts (UPICC). The prospective instrument is to provide practical guidance to a variety of addressees, including contract parties, adjudicators, and legislators around the world. It will also facilitate cross-border contractual relationships by offering a set of international principles and rules that build upon the UPICC and can be perceived as fair and culturally neutral by parties from different countries.

It is expected that the UNIDROIT-FIDIC Project would begin by assessing if and to what extent the UPICC already meet the demand of the international construction and engineering industries. The UPICC provide for several default provisions that are well suited to the needs of the sector. In particular, the latest edition of the UPICC benefited from the strengthening of the general legal framework in respect to long-term contracts, including specific rules and more detailed comments and illustrations that often expressly refer to construction contracts.

The UNIDROIT-FIDIC Project would identify those areas where the UPICC do not offer sufficient guidance and would then consider the development of best contractual principles for such areas, including, for example, in relation to design and defects liability, contractual time bars, and multi-tier resolution clauses and dispute boards.

Close attention would be given to existing best practices as already embodied in FIDIC model contracts and clauses. FIDIC contracts are the most widely used international standard forms of construction and engineering contracts, applied both on international and domestic projects. Where appropriate, best practices could be identified from FIDIC model contracts and clauses and clarified in specific legal principles to be included in the new instrument.

Following approval of the UNIDROIT-FIDIC Project, representatives from FIDIC and the UNIDROIT Secretariat met to discuss the scope and timeline of the project, as well as to define a common methodology for the carrying out of the project.

Consistent with UNIDROIT’s working methodology, a formal Working Group will be established jointly with FIDIC and information as to its composition and the dates of its first session will be shared in due course.