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NEC ECC: Would it be a CE if the employer had excluded bullet point 3 of section 9 in their amendments?

0 votes
Other than some preliminary site investigation (trial holes) the scheme never got underway, and after several months the employer decided to cancel for reason 5, however, clause 92.1 bullet point 3 is amended in the schedule of amnedments to "not used"

As such, I thought that there is no contractual mechanism (as it has been removed) to deal with reason 5, therefore it should be a CE?
related to an answer for: NEC3 Short contract termination
asked Sep 10, 2019 in Termination by mattbristol (120 points)  
It looks to me that you are talking about the ECSC and not the ECC. in which case reason 5 is for a termination for any other reason. The third bullet point of 92.1 is for sums retained by the Employer that should be paid on termination. if the third bullet point has been removed and the contract was signed then, as far as I can tell, the Contractor would not be entitled to these costs. Furthermore, clause 90 lists the reasons and clause 92 lists what is to be paid in relation to a reason. I do not see how amending a payment that is to be made would remove the ability to use a reason listed in clause 90.

In terms of it being a CE, I struggle to see which of the 14 CE's it could come under. the closest being 60.1(12) however, this cannot be used as the third bullet point states it should be an event that neither party could prevent.

1 Answer

0 votes
As stated already this is the ECSC not the ECC.

If the 3rd bullet point under 92.1 is stated as 'not used' then any amounts retained at the time of termination would not be included in an assessment of the amount due.  This 'retained' amount could include 'retention', as stated in Contract Data, or an amount for not submitting a programme, as stated at clause 50.7.

Although the retained amount should be comparatively small in your case, as only preliminary works have taken place, also assuming there is no 'programme retention', this still highlights the importance of a thorough review of the contract terms and conditions to assess the commercial risk, prior to signing.

In your case, upon termination you would be paid;
 A. - a 'normal payment' amount,
 B. - cost of Plant and Materials,
 C. - ((forecast of the amount that would have been due at Completion) less A.) x 5%.
answered Sep 17, 2019 by Andrew W-I Panel Member (27,540 points)