What is contractual recourse for the Contractor under the NEC3 ECC regarding the delay of payments? Can the delay of payments can be use as reason for delay of Completion ?
There are 3 contractual recourses forthe Contractor for late payment :
- He is paid interest in a subsequent assessment. See clauses 51.2 and 51.4.
2.Under option Y(UK)2 and more specifically, clause Y2.4, if the Employer does not pay what is certified (and the Employer does not change it before the start of the Prescribed Period), the Contractor (having given 7 days notice) can suspend performance. This is a compensation event and the Contractor gets the cost and time for demobilising, doing nothing and re-mobilising. I.e. it would delay Completion and, as it is a compensation event, the contractual Completion Date.
- Under Reason 16 (R16 in clause 91.4) the Contractor can terminate if they have not paid 11 weeks after they should have been.
For both points 2. and 3. above, the Contractor needs to be sure that they are contractually in the right as otherwise liability would shift onto them.