If there is no interface agreement, the regulation of costs and losses for which the customer is responsible is usually included in the facilities management contract. Alternatively, the parties may and generally agree that the Contractor has two types of obligations: one to Projectco to cover its costs of recovering debt repayment obligations and loss of income; and one to the FM provider to cover their shortfall and additional costs due to the delay. As a general rule, the FM provider is not entitled to compensation if the delay was caused by a case of force majeure or an ancillary event. The principle applies to the RESTful API, which is a popular interface format between systems in modern software design. Dispute Resolution: The interface agreement usually provides for a number of levels of dispute resolution. All will deal with the decision and should deal with related or related disputes. In modern terms, the API interface document is a living document consisting of the following feature: Interface agreements are used in Private Financing Initiative (PFI) projects to establish a direct contractual relationship between the contractor and the facilities management (FM) provider. This is done on the basis that these two large subcontractors will have more effective remedies against each other with respect to these risks than Projectco, and that Projectco does not want to be involved in claims between subcontractors to the extent possible. Limitation of Liability: The Interface Agreement could limit the liability of the parties in various ways. It should indicate that the total liability of subcontractors in respect of the project does not exceed the limit of liability in major subcontracts.

It could also provide, for example, that there is no liability for indirect losses suffered by the subcontractor under the agreement, including loss of profits, business opportunities or goodwill, or set a minimum monetary value for claims to prevent either party from making frivolous claims. It is not uncommon for such agreements to include individual liability ceilings that relate either to a particular party or to specific issues. Projectco and the FM Provider must agree on residual liability for defects even after the expiration of the Contractor`s latent liability period. Donors will also participate in these discussions. As a reminder, we will use “Projectco” to refer to the company or private sector partner created solely for the purpose of becoming the owner of the project. This type of business is also known as a single-use vehicle (SPV). We will refer to the sponsoring local authority entering into the agreement with Projectco as the “Authority”. For more information on forming public-private partnerships (PPPs), see our separate Exemption Guide. Despite these drawbacks, some FM contractors and suppliers do not prefer interface agreements as a general business approach. They are essentially a tool to protect the interests of funders and Projectco, and most subcontractors will be wary of having contractual obligations both vertically (to Projectco) and horizontally (with each other) at the same time. However, the mere fact that Projectco`s obligations to the authority – for example, the construction or operation of the facilities – will be transferred to both subcontractors means that interface problems will inevitably arise. An interface agreement is one way to solve these problems.

The interface on each system that establishes connectivity between systems is called an “interface.” The contract must be concluded on the format of the data, the handling of errors and the use of the connection. A mutually agreed and agreed development interface agreement provides the customer and supplier with the information necessary to properly plan and execute the activities and work products that lead to a functionally safe end product. As simple as it may seem, there seems to be a big difference in how these agreements are presented and executed, which can lead to problems or concerns in the subsequent project. The alternative to an interface agreement is for these issues to be addressed in each of the subcontracts. In this model, each subcontractor has its own separate contractual relationship with Projectco, so that in the event of a claim, Projectco can recover everything from the other subcontractor. The problems that this causes are: Design development: It will be in Projectco`s interest for the FM provider to be involved in the design process as it wants to have the peace of mind that the FM provider has the design included in its pricing strategy. As a general rule, the FM provider agrees with Projectco and the contractor in the interface agreement that they can provide the services if the building is built according to specifications. In order to have some recourse when the provision of services becomes more expensive or more difficult because the design of the building is not as intended due to discrepancies, for example in the specification of the building, the FM supplier should exercise a remedy against the contractor. This “horizontal” EPR should apply to a subcontractor`s right to compensation from Projectco in the absence of an interface agreement. These provisions will normally form part of both subcontracts on as identical terms as possible. If an interface contract exists, the subcontract generally excludes Projectco from any liability with respect to the acts, omissions or violations of the other subcontractor – the interface agreement is intended to be the sole purpose of these claims and liabilities.

Since the FM provider`s revenue stream is threatened, there is a business incentive for them to immediately address any maintenance issues, including defects, and repair them. Any right of the Contractor to remedy defects during the liability period for default is an impediment to the FM Provider`s ability to meet its performance standards under the Facilities Management Contract, but this must be balanced with the Contractor`s ability to control its final liability. It is likely that the FM provider will not have the know-how to manage the correction itself. Equivalent Project Facilitation (EPR) is an issue arising from how Projectco`s obligations and liabilities are incorporated into the facilities management agreement or construction contract under the project agreement. This is a way to ensure that Projectco`s liability to the subcontractor in question is not greater than the claim projectco has against the authority under the project agreement. In most cases, Projectco must exercise its rights vis-à-vis the Authority, and the Authority must agree that Projectco is entitled to trigger the subcontractor`s right against Projectco. The API is a contract between 2 or more systems, usually different teams or companies, to agree on system interactions and behavior. Traditionally, the interface contract is in Word document format, which specifies the use cases, interface, format, example, error code, etc. It can be more than 50 pages of document. Claims under the Interface Contract: A party is only required to pursue a claim if it notifies the other party within a specified period of time – typically 15 to 20 business days – indicating the relevant facts, the basis for the liability, and the amount or likely amount of the claim.

Replacement of a subcontractor: The project agreement should address the consequences of the termination and replacement of a subcontractor. As a general rule, the surviving subcontractor may need to enter into a replacement interface agreement on terms substantially identical to those of the existing agreement. Since subcontractors will generally be uncomfortable engaging in a contract with companies unknown on these terms, they will usually try to obtain some sort of protection through subcontracting – for example, an agreement whereby they are only required to enter into a replacement interface agreement with replacement subcontractors who meet certain minimum financial and technical requirements. Subcontractors will also refrain from assuming liability if the other subcontractor becomes insolvent and may attempt to pass on this business risk to Projectco. Agreements between subcontractors: One of the main features of an interface agreement is the mutual obligation of subcontractors to comply with their respective subcontracts, which usually include repayment or compensation obligations. It is this Agreement that allows Projectco to exclude any liability to its subcontractors in connection with their subcontracting for the acts or omissions of other subcontractors. Where an interface agreement exists, major subcontractors may attempt to enforce the PROVISIONS of the manufacturer`s indemnification rights with respect to liability to other subcontractors if the problems are caused by subcontractors. .