New General Conditions for Consulting KSE 2013 in use since March

The General Conditions for Consulting (“KSE 2013”), which are applied to planning and construction contracts, were renewed in February 2014. The conditions were negotiated by The Finnish Association of Construction Clients (“RAKLI”), The Finnish Association of Consulting Firms (“SKOL”) and the Association of Finnish Architects’ Offices (“ATL”) and will be applied as of 1 March 2014.

The most essential changes compared to the previous General Conditions KSE 1995 relate to the obligations and liabilities of the parties. For example, the maximum amount of damages a consultant can be obliged to pay will still be limited to the full price of the assignment, but this price limit will hereafter also comprise the remuneration for any alteration or additional work. In addition, the consultant’s liability will be extended to two years after the date the assignment was completed and accepted or the client was given the materials as agreed in the assignment. If the plan is not executed immediately or the client cancels the planned construction work then the consultant’s liability is in effect for five years. Prior to the changes, a consultant’s liability ended one year after the completion of the planned construction unless agreed otherwise.

A provision about the client’s liability for delays is included in the new conditions of KSE 2013. The client may be liable for delays due to withholding necessary basic information or instructions or that it is otherwise responsible for. The penalties for delay were also increased both for the consultant and the client. Under the new conditions, the penalty for delay corresponds to the number of delayed work days and the maximum amount of the penalty is higher. According to the new conditions, the penalty for delay is 0.2 % of the full value of the assignment (including alterations and additional work) for each delayed full work day up to a maximum amount of 50 days (i.e. 10%). The liability for delay according to the KSE 1995 conditions was 0.5 % for each full week of delay in the plan’s delivery up to a maximum of 10 weeks (i.e., 5%). The aim of increasing the delay penalty is to try to prevent projects from being delayed.

The rights to any intellectual property shall continuously remain with the consultant unless agreed otherwise. The client however has the right to use the materials concerning the planned object delivered by the consultant.

Differing from the prior conditions, any disagreements arising from the consultation agreement that the parties fail to resolve through negotiations shall be settled in expedited arbitration of the Finnish Chamber of Commerce. Expedited arbitration is designed for resolution of minor and straightforward disputes. A dispute is resolved by a sole arbitrator, who shall give an award within three months of receiving the documents of the case from the chamber of commerce.

In addition to the aforementioned changes, some of the concepts and definitions used in the conditions have been adjusted. Product development and industrial design were also added to the field of application of the conditions.

Due to the general nature of the conditions and their broad field of application, it has not been possible to regulate and cover all special situations and procedures. When drafting the conditions, the negotiating parties stated that the contracting parties should agree separately upon details that are not regulated in the general conditions.

The new conditions are available in Finnish at https://www.sopimuslomake.net/sopimusehdot, a platform for forms in the field of construction and real estate.

What KSE conditions? The General Conditions for Consulting may be applied to assignments between a client and a consultant e.g. concerning design, product development, construction, productive operations and associated research, planning and control.