In Search of the Holy Grail: Taking the Abrahamson Principles Further
![handle is hein.journals/cnstrcnl1 and id is 137 raw text is: In search of the
Holy Grail:
taking the
Abrahamson
Principles further
Arent van Wassenaer Allen & Overy LLP, Amsterdam
The Abrahamson Principles have offered a rational basis for risk
allocation in construction contracts since they were first proposed
more than 30 years ago. In this article, Arent van Wassenaer
reminds us of where the principles have come from, reviews ways
in which they have informed the recent development of a Dutch
standard form and suggests some minor tweaks to ensure the
applicability of the principles to 21 st-century contracting.
Introducing the Abrahamson
Principles
In 1973, distinguished ICP member Max
Abrahamson published an article in the
Journal ofthe Brirish Tunnelling Society (Volumes
5 and 6, Novenber 1973 and March 1974), in
which he first described five main principles
for risk allocation. After discussing them at
a meeting of the Society (chaired by no less
than Sir Harold Harding), the principles were
then adopted in the Construction Industry
Research and Information Association
[CIRLA] Report 79 on'Tunnelling - Improved
Contract Practices' published in 1978.
Since then, these principles - which have
come to be known as the 'Abrahamson
Principles' - have been adopted in case law
and legislation and have been reproduced
and quoted countless times. These five simple
principles, quite effectively, lay out the ground
rules for a fair and equitable allocation of all
risks surrounding construction projects. In
tact, one could easily extend the principles to
arenas outside the constrIuction industry.
The Abrahamson Principles have been
further developed, have been generally
accepted throughout the world, have been
discussed in numerous publications, and
have been used effectively in negotiations as
well as in the development of model forms
of contract in both civil and common law
jurisdictions.
The Abrahamson Principles suggest that
risk should be allocated to a party according
to the following guidelines.
1) The risk is within the party's control.
2) The party can transfer the risk, eg through
insurance, and it is most economically
beneficial to deal with the risk in this
fashion.
3) The preponderant economic benefit of
controlling the risk lies with the party in
question.
4) To place the risk upon the party in question
is in the interests of efficiency, including
planning, incentive and innovation.
5) If the risk occurs, the loss falls on that
party in the first instance and it is not
practicable, or there is no reason under
the above principles, to cause expense and
uncertainty by attempting to transfer the
loss to another.
In this article I would like to demonstrate how
the Abraharnson Principles can be used in
developing a system which would contribute
CONSTRUCTION LAW INTERNATIONAL Volume I No 4 December 2006](ViewImageLocal?handle=hein.journals/cnstrcnl1&div=34&collection=&method=preview&ext=.png&size=3)
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In Search of the Holy Grail: Taking the Abrahamson Principles Further
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