FIDIC reference
Clause 16 — Suspension and Termination by Contractor
The Contractor’s lever against non-payment: suspension after a 21-day Notice and termination for prolonged breaches.
Applies in: Red BookYellow BookSilver Book
If the Engineer fails to certify, the Employer fails to pay on time or breaches 2.4, the Contractor may — after giving not less than 21 days’ Notice — suspend or slow the works (16.1), with entitlement to EOT and Cost plus Profit for the consequences. For prolonged breaches (extended non-payment, substantial default, prolonged suspension under Clause 8, Employer insolvency) the Contractor may terminate (16.2). It then ceases work, removes its equipment (16.3) and is paid for work done plus loss of profit and damages (16.4). Impeccable 1.3 Notices are what keep these rights alive.
Key points
- Suspension after not less than 21 days’ Notice (16.1).
- The consequences carry EOT and Cost plus Profit.
- Termination on the prolonged breaches listed in 16.2.
- Termination payment includes loss of profit (16.4).
How this works in practice
Clause 16 mirrors Clause 15 and is just as procedural. A right to suspend arises on non-payment of certified sums, failure to provide evidence of financing under 2.4 and certain other Employer defaults — but only after notice and the stated period has run. Contractors routinely lose the right by acting emotionally: walking off site without notice and converting a sound position into their own breach, with exposure to termination for default. Suspension is a powerful instrument exactly to the extent that it is documented properly.
Common traps
- Work stops before the period stated in the notice has expired, making the suspension itself wrongful.
- Costs during suspension are not recorded: security, storage, plant standing time, demobilisation.
- The notice of suspension is not separated from a notice of termination, so the parties lose the intermediate step for settlement.
Versions: 1999 → 2017 → 2022
- 1999
Clause 16 with the same logic; periods and grounds were less detailed.
- 2017
Grounds, periods and the interplay with 2.4 and 14 were clarified.
- 2022
No substantive change in the 2022 reprint.
Clause FAQ
Which FIDIC books use Sub-Clause 16?
The clause applies in Red Book, Yellow Book, Silver Book. Particular Conditions may change the standard risk allocation, so always check the project contract.
Can work be suspended immediately after the first late payment?
No. Notice is required and the contractual period must run; only then is suspension lawful. The one thing worth doing immediately is recording the late payment in writing and starting to compute financing charges where the contract provides for them. Early formalisation strengthens the position by the time the right to suspend actually arises.
Which costs are recoverable for a suspension period?
Generally the reasonable costs incurred as a result of the suspension: site security and maintenance, storage of materials and equipment, standing time for plant and staff, and the cost of remobilisation afterwards. The key is not the list but the evidence: without a daily record of resources actually held, the figure becomes an estimate that is easy to attack.
Related clauses
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Reference material, not legal advice. Always check your contract and the Particular Conditions.