Conceiving and Drafting of Terms of EPC Contracts - Research Paper Example

It has been specifically designed for use in EPC and BOT contracts. However, law firms and big contractors will have their own in-house standard EPC contract and for these parties, the silver book may act as a solid reference to update and review their in-house standard forms. For those law firms and contractors, who do not have standard EPC, contract forms may use the Silver Book for drafting their EPC contract terms. (Huse 2002:48).However, there are obvious tensions between a project company and a contractor where a turnkey EPC contract is used.

The drafters of the EPC contract has to pay special attention to the allocation of project risks and with specific reference to the drafting of common terms in EPC contracts. Else, the contractor’s interest will be affected and he may have to incur pecuniary losses. This research essay analyses the points to be taken into consideration while drafting the terms of international EPC contract and allocation of risks in the EPC contract so that the interests of both the contracting partiesAn EPC Contract is also known as fast-track contract.

It combines three stages of construction contract under the ambit of one contract. It combines the construction, procurement and engineering aspects in one single contract. It facilitates the growth on a project to proceed on an overlapping basis than if three stages have been taken over in series.The “package deal” or turnkey arrangement or “design or build “, “cle-en-main” or EPC imposes the duty to construct and design solely on the contractor. There is no standard explanation for each of these terms in the construction sector.