NEC ECC: Employer termination

The Employer has terminated due to financial restrictions. What does the Employer and others need to do to put the termination provisions into effect?


Under NEC4A the right to terminate due to “financial restrictions” ( I take that to mean they dont have the money to pay for the Works) is not a ground that the Employer can rely upon to terminate.

Reasons for termination for “lack of money” are set out in Clause 91 and these are that if one party is “insolvent” then the other party can terminate. The Employer cannot terminate because it doesn’t have the money to pay you.

It seems that the best way forward would just be to draw up some form of variation to the Contract that brings it to an end and which includes a financial agreement.

Glenn Hide has rightly pointed out that if Option X11 has been used then they can terminate at will. In order to do that the Project Manager has to issue a Termination Certificate under Clause 90.1.

Mike below is absolutely right that ‘financial restrictions’ is not a direct reason to terminate. It would, however, come under "A reason other than R1 - R21’ as per the table in clause 90.2 from which the relevant procedures and amounts due would flow.