NEC ECC: What details should be included in a default notice issued under Clause 91.2?

If a Project Manager is issuing a default notice for reason R11, what details need to be included for the notification to be valid? Does it need to fully substantiate the default has occurred and is a substantial failure or does it just need to identify the default and why it is considered substantial?

Under NEC3 there is a single notice from the PM to the Contractor although under NEC4 there is the same notice but a further notice is also given by the PM to the Employer following the expiry of the 4 week period and lack of suitable action from the Contractor.

Notwithstanding this, however, the PM’s notice to the Contractor should state that the default is considered to be substantial, in compliance with the PM’s obligation to act in a spirit of mutual trust and cooperation, that is acting in an open and honest manner, without putting aside their own interests. This would also provide a clear intention of the possible consequences, which would be financially different for another reason, such as Employer / Client terminating for any reason (NEC3 clause 90.2 or NEC4 option X11).

In direct answer to your question the PM should state what the obligation(s) is (are) that the Contractor has failed to comply with and make clear that it is considered to be a substantial failure. The PM is not obliged to state why they believe the matter is a ‘substantial failure’, which could also be considered a ‘material breach’ of a contract condition, rather than a minor infringement (or series of). There will likely be an element of subjectivity and legal interpretation involved to determine this which would be for the Emp[loyer / Client to consider before giving the PM a notice to terminate.

Hopefully there would be consequent discussions between the parties to establish what has gone ‘wrong’ and what needs to happen to put it right.