Under the FIDIC Red Book and Yellow Book, 1999 editions, the Engineer issues Interim Payment Certificates certifying the amounts due to the Contractor for completed works and materials on site (Sub-Clause 14.6). The Employer is generally bound by the Payment Certificate and must pay accordingly, except where there is a lawful set-off or compensation claim against the Contractor.
Option A is correct because the Employer must pay the amount certified except for compensation claims that may be offset against the payment (Sub-Clause 14.6).
Option D is also correct: If the Employer intends to claim against the Contractor (e.g., for damages or defects), it must notify the Contractor under Sub-Clause 2.5 and provide particulars. The Engineer then assesses and decides on the claim and incorporates any agreed deductions into the Payment Certificate.
Option B is incorrect because the Employer is indeed bound by the Payment Certificate unless lawful deductions or disputes arise.
Option C is incorrect as the Employer can withhold amounts due for compensation claims once these are properly notified and substantiated.
[References:, , FIDIC Red and Yellow Books, 1999 Edition, Sub-Clause 14.6 – Interim Payments, , FIDIC Red and Yellow Books, 1999 Edition, Sub-Clause 2.5 – Employer’s Claims, , FIDIC Contract Manager Study Guide, Module on Payment Procedures and Financial Management]
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