Do NEC Contracts comply with Section 110A of the Construction Act

The NEC contracts require the Project Manager to certify within 1 week of the assessment date. Section 110A states that the payee (or payer) must give a payment notice within 5 days of the payment due date. Absent that notice it seems to me that the Scheme is then imported into the NEC.

JCT Contracts require the Payment Notice to be issued in 5 days so they do not need the Scheme.

Is this correct?

Mike, the NEC is published as an international contract and requires amendments to it in order to comply with UK legislation. Please refer to the secondary Option Y(UK)2 which if chosen incorporates the provisions required to ensure the NEC complies with the Act and also to the October 2020 amendment following the recent case law on the final date for payment under Rochford v Kilhan. Steve

JCT contracts integrate the payment requirements of the ‘Construction Act’ into the conditions of contract. This can readily be seen by the wording of ‘due date’ ‘Payment Notice’ ‘Pay Less Notice’ ‘basis on which that sum has been calculated’ etc, including the ‘5 day’ period at s110A. This is because it is written for use in the UK and is compliant with UK law.

In contrast, NEC contracts are non-specific with regard to which jurisdiction they apply to. Where used in the UK, then Option Y(UK) 2 would apply to a contract for ‘construction operations’. This stipulates (Y2.2) that the ‘due date’ is 7 days after the (payment) assessment date, which is the same date that the PM is required to certify by, in accordance with sub-clause 51.1.

In comparison, JCT contracts require a ‘Payment Notice’ (certificate) to be given up to 5 days after the ‘due date’ whereas under NEC the ‘payment notice’ is to be given by the ‘due date’.


Thanks for that.