Risk Allocation In Nigerian Construction Contracts: FIDIC vs Local Adaptations

Risk is an unavoidable part of every construction project. Delays, design errors, unforeseen site conditions, payment disputes, regulatory changes, and economic fluctuations all affect project delivery. Because construction projects involve multiple parties, significant investment, and long execution periods, how these risks are allocated determines whether a project succeeds or fails.

One of the most widely used construction contract frameworks in the world is the suite of standard contracts published by the International Federation of Consulting Engineers (FIDIC).¹ FIDIC contracts provide a structured approach to assigning responsibilities and allocating risk between employers and contractors. Their primary objective is to achieve a fair distribution of risks by assigning each risk to the party best able to manage it.