Nowadays Denmark has increasing number of projects within the building and construction industry where the common practice for lawyers is to use standard contract forms. The existing conditions of contract from 89 and 92 years have been recently replaced by Danish Construction Association.
What is the Danish AB system?
The AB general conditions of contract have been used within the Danish construction and building industry more often than well-known international standard terms.
In 2018, the Danish construction conditions of contract were revised, and they were implemented on 1 January 2019.
The Danish AB system includes the following standard conditions for construction projects:
ABR 18 (general conditions for technical consultation and support) and ABR 18 simplified version;
AB 18 (general conditions for the provision of works and supplies within building and engineering) and AB 18 simplified version;
ABT 18 (general conditions for turnkey construction contracts); and
Four additional terms (APP) for ABR, AB and ABT 18.
The new provisions of AB 18 have been brought in line with court and arbitration practice and contain some necessary clarifications with few significant changes.
Construction project management has become more detailed, including provisions concerning timetables, project optimization, mandatory project reviews and notifications. The aim is to increase efficiency and solve problems at an early stage.
Unlike AB 92, AB 18 contains provisions concerning the use of digital design. The provisions are not as detailed as the CIC BIM protocol, but are in accordance with Danish drafting traditions.
One of the tasks of the AB contracts committee was to reduce the number of disputes. As a result, a long dispute resolution procedure has been introduced following the recent developments in other international standard forms. It requires the parties to try to settle disputes through negotiations between parties during a ’cooling-off period’. Mediation takes precedence over arbitration, and a quick decision procedure resembling the FIDIC DAAB procedure has been implemented and institutionalized.
The Danish tradition of employing independent experts to take evidence and provide assessments concerning the technical matters of the dispute is maintained. International contractors should keep this in mind when a dispute arises.
NJORD law firm is a partner of the ’Invest in Denmark’ organisation under the Ministry of Foreign Affairs.
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