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NEC3 ECC: Consequential effects of missing a key date
What advice can you provide regarding the consequential effects of clause 25.3? For example a contract takes one year to complete at a cost of £1M and the Key Date is the Completion Date. If the Contractor was to take an extra 2 months at an additional cost of say £100k and the Employer, having to manage that overrun, had an additional cost of say £50k is the true intent of that clause imposing a cost payable by the Contractor of £150k? I could believe that the Employer’s costs may be recoverable but not the Contractor’s as those are defined costs to Provide the Works.
Or: is this clause solely for when the Employer incurs a cost for completing the work or pays others to complete it in which case the above example would not apply? It's just that there are also other conditions that could be used in these examples that protects the Employer e.g defects clause 45 or delay damages X7.
Feb 13, 2017
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First of all - Completion Date should not be a key date. They are different thing. Completion Date is the date the Employer requires the defined works in "Completion" to be achieved by. These would be liable to fixed delay damages that are identified in contract data part 1 at a cost of £X/day.
Key dates are a bit different. They are intended to be a requirement to achieve a certain requirement by a certain date e.g. to provide power to a specific part of the site by a specific date. This is normally to allow the Employer to manage Others (i.e. other 3rd Parties). if the Contractor misses this date for reasons that are their own fault, any resultant cost the Employer incurs as a result will be recoverable from the Contractor (25.3) i.e. undefined/unliquidated cost.
If there is no X7, then outside of the NEC contract the Employer is able to claim unliquidated cost, but if X7 is included it takes away this loophole. If you have X7 and delay damages at say £2000/day, then the fact they have made Completion Date a "key date" which is undefined cost in itself is an "ambiguity". This would actually go against the one who created the ambiguity (which here would be Employer). If the Employers overrun cost will be £25k/month then this should have been identified as the delay damage figure (say £1000/day).
Also worth noting that if the Employer puts delay damages at £2k/day, if they are losing more than that they cant claim any more from the Contractor. Same rule applies to sectional Completion Dates as well.
If there is a genuine key date that the Contractor misses then any cost incurred by the Employer will be recoverable.
Feb 13, 2017
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