Turkish building construction contracts vs. FIDIC contracts

Abstract

Contract administration is one of the most important pillars of a construction project. Its effect starts at bidding and lasts until the end of the guarantee period. A common mistake made by construction owners is structuring the construction contract in a way that minimizes the owner’s risks by relaxing the timing of owner payments, including heavy penalty clauses, requesting bank guarantees with indefinite duration, etc. However, a well - balanced construction contract may protect the work against any unexp ected events, avoid potential disputes between the parties, and provide contract clauses that are fair to both parties. Being one of the pioneers in this area, the aim of this study is to compare the time and payment -related clauses of the Turkish bespoken construction contracts with standard FIDIC contracts and provide important insights and guidelines to practitioners. In this study, 304 bespoken contracts undertaken in the Turkish building construction market are analyzed and compared against standard FI DIC conditions. The results show that the timing of the payments is similar to those in FIDIC general conditions, yet time extension is mostly awarded for force majeure only. The majority of the projects were delayed in most cases observed independently from the type of contract and wording of the time extension clause. Recommendations are made to structure a more balanced building construction contract and more successful construction project management in Turkey.