NEC ECC: Payments on termination

NEC3 and NEC4 Contracts Termination
1

The contract has been terminated and interested on thoughts on the following points:

  1. Letter of termination dated almost 3 months before notification was issued, at what date do liquidated damages must be charged to, notification or date on the termination letter? 2. Is retention released in full on final payment?
  2. The client is refusing to pay for works were there’s uncorrected notifies defects.
  3. The client is refusing to pay for materials in the working areas.
2

It’s unclear from your question what the status of the letter of termination is? Are you saying that the letter is the termination notice required by clause 90.1 and that when it was issued it was dated 3 months prior to the date it was issued? You also don’t say if the PM has issued a termination certificate? Until this has happened you are obliged to continue to Provide the Works and the date of termination will be the date the certificate was issued.

Assuming that at the point of termination the Contractor was already late delay damages will be payable from the Completion Date until the date of termination. Retained amounts should be returned to the Contractor in the final payment which is certified by the PM within 13 weeks of the date of termination.

You haven’t stated which main Option you are using however both A and B contain a test to determine if defective work should be paid for (clauses 11.2.27 and 11.2.28) and C, D, and E allow for the cost of correcting Defects to be disallowed in certain circumstances (clause 11.2.25). Clause 44 and 45 give the PM and Contractor certain rights in respect of uncorrected Defects, these should be used to ensure the final payment takes them into account.

The contract does give the Contractor the right to be paid for Plant and Materials within Working Areas at clause 93.1 (A1).