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NEC ECC: Does termination of the main contract by an Employer for a reason other than R1-R21 amount to prevention as a reason for the Contractor to terminate a Subcontract under NEC3

0 votes
The Employer has terminated an NEC3 contract apparently for convenience and the Contractor has apparently accepted this.

The Contractor has advised the subcontractor that this amounts to "prevention" as defined in NEC 3 in respect of the subcontract . The issue is payment on termination.

Does the termination "for convenience " carry over the the subcontract, A1, A2,and A4, or is it indeed prevention?
asked Aug 22, 2018 in Termination by Big Al (240 points)  

1 Answer

+2 votes
If the Contractor is blameless in respect of the termination of the main contract (which it sounds like he is otherwise the Employer would have terminated for a different reason rather than convenience), then R21 could be cited as a reason for terminating the subcontract. The Contractor isn't terminating for his convenience, he is terminating because the Employer has terminated for convenience (or simply any reason as per clause 90.1).

On termination the main contract states that the Contractor does no further work (which it also states in the subcontract), which would in turn be a prevention event under clause 19.1 of the subcontract requiring the Contractor to give you an instruction stating how you should deal with the event e.g. stop, make safe your works and leave site.

If the Contractor hasn't followed the letter of the Subcontract in respect of the termination you may be able to claim that he has committed a repudiatory breach of contract and sue him for damages.
answered Aug 22, 2018 by Neil Earnshaw Panel Members (21,680 points)