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NEC ECC: Should contractor Insolvency result to a breach of contract to the Employer?

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The clause says "if the Contractor becomes insolvent then such event shall create a default and breach by the Contractor of this contract and the Employer may at any time by notice to the Contractor terminate the Contractors employment"
asked Dec 28, 2017 in NEC3 Termination by anonymous (1,880 points)  

1 Answer

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Best answer
This is a Z-clause i.e. written specially for the contract. On the face of it, the answer seems to be 'Yes' the Employe can terminate.

However, I would be wary of reading this clause in isolation from the standard section 9 clauses for Termination and any other relevant option Z clauses as the Employer might end up paying quite a lot for doing this.
answered Dec 29, 2017 by Jon Broome (48,090 points)  
Just to add to Jon's answer, insolvency itself is not a breach of contract, although does lead to a breach (ie: non-performance).  Consequently, contracts are frequently amended to make insolvency a breach to allow an Employer (Client) the right to terminate accordingly.