Pubblicazione disponibile nel eBook-PDF (Download immediato).

This model contract intends to cover a particular category of turnkey contracts, i.e. contracts for the supply of a complete plant or production line to be erected within facilities which already exist or which are constructed by the purchaser (or by a third party, for the purchaser’s account). In other words, the model refers to a contract which is called “turnkey” because it comprises in principle whatever is necessary for a certain purpose (a complete production unit), but such “turnkey approach” is limited to the plant or production line, i.e. to the equipment necessary for manufacturing certain products and does not extend to the items which “surround” the plant, such as buildings, supply of energy, etc., which remain outside the scope of the contract.

From this point of view, this turnkey contract must be clearly distinguished from more comprehensive turnkey contracts which cover all other items, like civil works, etc. The ICC has also prepared a model of an all-comprehensive turnkey contract, which is more suitable for large civil works or to contracts for the supply of a plant where the contractor undertakes to supply a complete factory (including civil works, etc.).

The difference between the two types of turnkey contracts is substantial. While in a “full turnkey” the contractor undertakes to perform a work (i.e. to build a factory, a bridge, etc.), in the contract for the turnkey supply of a plant the supplier’s main obligation is to supply the equipment and to assist the purchaser during erection and start up, together with an overall warranty that the plant as a whole (and not only each single part of the equipment) will meet certain performance parameters.

A first consequence of this different approach is that the turnkey contract for a plant is mainly a contract for the sale of equipment, governed by the rules on sale contracts, and particularly the United Nations Convention on the International Sale of Goods (CISG), although with peculiar characteristics which are closer to a construction (works) contract (like the involvement of the supplier in erection, start up, etc. and the overall warranty of performance of the plant). In other words, this contract is mainly a contract for the sale of equipment, with accessory obligations regarding erection, start up, training of personnel, etc. This is shown inter alia by the fact that the contract price mainly relates to the equipment and is normally paid (for the greatest part) against delivery of the equipment.

Another important difference is that, while in the full turnkey contract the contractor will commonly have complete control and responsibility over the site until taking over, in the turnkey contract for the supply of a plant or production line, the supplier will perform its obligations regarding assistance during erection, start up, etc. within facilities that are under the purchaser’s control: this is particularly the case when a line is to be installed within an existing factory. Moreover, it is normal that the purchaser takes delivery of the equipment before erection and that consequently during the stage of erection, start up, etc., the purchaser controls the equipment and bears the respective risk.