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NEC ECS: Option A - Procedure for a sub-contractor to terminate contract due to insolvency
Due to the Main Contractor entering Administration we are terminating our contract & applying for payment on materials procured & works carried out to date.
I know clause 60.1 would apply but unsure the exact procedure from a Sub-Contractor position.
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You need to ensure you follow the procedures described in the termination provisions, if you fail to do so then it could be classed as a repudiatory breach of contract which may affect the amount you can recover from the Contractor or worse still enable them to claim damages. Note that you are NOT terminating the contract, merely your obligation to Provide the Subcontract Works, certain provisions of the contract will survive the termination.
Firstly you need to notify the Contractor in accordance with clause 90.1 and give details of your reason. The reasons are all stated at clause 91, presumably the ones that apply to you are the ones at R1 to R10 under clause 91.1. Be careful to terminate for the correct reason otherwise again you risk committing a repudiatory breach of contract.
You then need to ensure you follow the appropriate procedures under clause 92 and clause 93 sets out what payment you are entitled to.
I can't stress enough how important it is to stick to the letter of the contract when instigating a termination.
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