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YSE 98 Fidic For Practioners

The document discusses construction contracts and standards in Finland. It notes that Finnish law does not have specific construction contract laws, but allows contractual freedom. The most common contract types are main contracts with nominated subcontracts or design-and-build contracts. For gaps not covered, general contract law principles apply, but they are not always suitable for construction. To address this, standardized contract terms called YSE terms were developed and are commonly used, though they do not have the force of law. The YSE terms are generally viewed as balanced and must be considered even for foreign parties. They define contractor obligations and require collaboration between project stakeholders. The standard guarantee period is two years, but liability can extend to ten years for gross negligence or serious defects

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Rob Speel
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1K views1 page

YSE 98 Fidic For Practioners

The document discusses construction contracts and standards in Finland. It notes that Finnish law does not have specific construction contract laws, but allows contractual freedom. The most common contract types are main contracts with nominated subcontracts or design-and-build contracts. For gaps not covered, general contract law principles apply, but they are not always suitable for construction. To address this, standardized contract terms called YSE terms were developed and are commonly used, though they do not have the force of law. The YSE terms are generally viewed as balanced and must be considered even for foreign parties. They define contractor obligations and require collaboration between project stakeholders. The standard guarantee period is two years, but liability can extend to ten years for gross negligence or serious defects

Uploaded by

Rob Speel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Finnish Contract Law (Fidic for practioners page 16-17)

The Finnish Contracts Act and other Finnish law do not contain any particular provisions for construction
contracts. However contractual freedom allows the parties to decide the content of any contract. In
Finland most commonly works become awarded by main contracts with nominated sub-contracts,
separate trade contracts with a project manager, design-and-construct contracts as well as CM
contracting contracts and CM consulting contracts. However, if the contract parties do not make detailed
provisions in the contract itself, any remaining gaps are filled by general principles of contract law. As a
matter of fact these general principles of contract law are generally not very suitable for the
management of construction projects.

Due to the above mentioned fact that Finnish law lacks any detailed legislation as to construction
contracts, a collection of provisions for such contracts in Finland has been developed. These are the YSE
terms (at present in the version of 1998 YSE 98). These terms do not have the character of a law, but are
standardized general contract terms that have been drafted by a public committee. YSE terms are also in
use in some other countries such as Estonia. When drafting construction agreements in Estonia it is
common to refer to either FIDIC standard contract forms, less frequently also to the YSE, the Finnish
standard terms of contracts.

YSE terms are applicable only if the parties to a construction contract expressly agree to incorporate
them into the contract. Actually, they are generally regarded as

being balanced and fair, and are agreed upon in most Finnish construction contracts. Therefore, in
practice there is usually no way around YSE terms, even for foreign contractors and investors, and they
must accordingly taken into account when drafting the contract.

Section 1.1 of the YSE (1998) sets out a contractor's principal obligation to carry out all works as specified
in contract documents. Section I .2 states further that the contract includes all works required to achieve
the agreed finished result. Additionally, articles 7 and 8 of YSE (1998) provide the mode of cooperation
and collaboration between contract stakeholders. respectively.

According to section 29 of the Y SE 98 terms, the guarantee period for buildings is only two years.
Following expiration Of the guarantee period, the contractor may remain liable for a period of up to ten
years following delivery in the circumstances set Out below:

• A defect has been caused by the contractor's gross negligence or there has been serious neglect of
agreed quality assurance, or work has been left entirely uncompleted.

The client could not reasonably be expected to have noticed the defects in the handover inspection or
during the guarantee period.

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