Fulfillment the covenant in the EPC or Engineering, Procurement, and Construction Contract

The EPC or Engineering, Procurement, and Construction Contract is a contract in which one party, namely contractor, takes the responsibilities of different stages including engineering, procurement and constructionof the project. The main obligation of the employer, is financing of the project and the commitment of the contractor is delivering the project on time; thus, fulfilment of the obligation in such contract is of great importance. Regarding the fact that a large amount of country’s budget are invested on such contracts with an emphasis on the fourth and fifth Development Plan, then, fulfilling the project according to the contractual standards (fulfilment the obligation), is the most sensitive stage of the contract. One of the effects of determining the time of fulfilment of the obligation is releasing the guarantees of good performance and fulfilment of the commitment. Also, by fulfilling the obligation, the guarantee related to the maintenance as an obligation is transferred from contractor to employer. There is a disagreement about the nature of fulfilment of the obligation in general principles of the contracts; some call it a contract and some others consider it as an illegal action. In such contracts, whether in domestic or international standard samples, the procedures of fulfilment the obligation, a minute must be adjusted with the written will of both contractor and employer and it seems to be a ceremonial contract.