New Standard Agreements for Commercial Construction Projects – Key Updates

For several years, the two dominant standard agreements for commercial construction projects have been AB 04 and ABT 06.

Today marks the beginning of the open consultation period for the new General Conditions for Construction Contracts regarding building, civil engineering, and installation works (AB) and the new General Conditions for Design and Build Contracts regarding building, civil engineering, and installation works (ABPU). The consultation documents are available on Svensk Byggtjänst’s website.

Fylgia's construction law experts are currently analyzing the proposed agreements and will submit a response during the consultation period.

Here are some of the most significant changes observed in the proposed AB 25 at first glance:

• The term “total contract” is replaced by “design and build contracts”, with the current "T" in ABT 06 substituted by "PU."
• “Definitions” replaces “Terminology”, and the term “Variation Work (ÄTA)” is removed.
• Prescribed and equivalent ÄTA are now referred to as “changes,” “variation or additional work,” and “deviating conditions” in the terms of the standard agreements. Changes are addressed in a new dedicated chapter (Chapter 5) and include partially new terminology.
• “Hourly Rate” and “Digital Model” are introduced as new definitions. The digital model may also become part of the contractual package.
• “Project Plan” is introduced as an overarching term, replacing the environmental and quality plans. Occupational health and safety, as well as information management, are included in the project plan.
• A new chapter structure and new headings are proposed, including an introductory chapter on “General Principles” and dedicated chapters for “Inspection,” “Changes,” “Delays and Defects,” and “Other Damages.”
• AB 25 is explicitly stated to be intended for fixed-price contracts (Chapter 1, Section 2).
• Clarifications on the scope of contractual works and the interpretation of contract documents (Chapter 2, Sections 1-2).
• New rules on the employer’s right to inspection and objections (Chapter 4, Section 6). Contractors must dispute objections to avoid being obliged to rectify the issue. The aim is to enable earlier detection and resolution of issues.
• The employer is granted the right to suspend work (Chapter 4, Section 10).
• A penalty clause is introduced (Chapter 7, Section 3), applicable unless otherwise agreed.
• Clarifications on the timing of claims for defects identified during the warranty period – claims must be made no later than one month after the warranty period ends (Chapter 7, Sections 8 and 10).
• A new chapter on damages introduces a liability cap for “other” damages, limiting them to 30% of the contract sum (Chapter 8, Section 2).
• The inspection chapter has undergone several changes, including the consequences of missing a final inspection being moved to Chapter 3, Section 28.
• A right to terminate the contract has been introduced, with circumstances previously covered under rescission now moved (Chapter 10, Section 1).
• A right to terminate for anticipated breach of contract has been introduced, applying when “it is clear that a breach will occur” (Chapter 10, Section 7).
• Dispute resolution rules have been significantly revised, including the introduction of a “dispute escalation ladder” and rules encouraging communication (referred to as “consultation”) (Chapter 11, Section 2).
• New case law has been incorporated, clarifying that access work is considered part of remediation (Chapter 7, Section 12), technical solutions must be suitable for their purpose (Chapter 1, Section 9), and in the absence of specific instructions, the contractor must make a professional assessment, considering “likely” circumstances. Where multiple professional assessments are possible, the contractor may choose the option with the lowest cost (Chapter 2, Section 7).

A preliminary analysis of the new ABPU 25 (current ABT 06) will follow shortly.