NEC ECS: Can delay damages be charged after final account is settled?

After receiving a Final Account Statement from the Contractor which is the “full and final extent of the Contractor’s liability to pay the Subcontractor”, and it does not include a charge for delay damages, can the Contractor come back later to claim delay damages if he has finally been charged delay damages by the Employer?

Under Secondary Option X7, the obligation relating to delay damages is upon the Subcontractor, who is obliged to pay delay damages until either Completion or take over, although in practice this is nearly always assessed and included on a payment certificate.

The Contractor’s statement in the final account cannot amend the contract terms, although if any legal ‘weight’ is to be applied to the statement, it couldn’t apply to delay damages anyway as they are a payment from the Subcontractor to the Contractor.

Check your contractual obligation to pay delay damages by comparing the date Completion was certified with the Completion Date.

I’d say it’s a very difficult question to answer without seeing the exact wording of both the contract and the final account statement. Clause 12.3 of the ECC provides for the contract to be changed if it is agreed, confirmed in writing and signed by the Parties. If those three elements are present then the final account statement may have varied the contract. As Andrew says though, if the wording specifically says “full and final … Contractor’s liability to pay Subcontractor” then it doesn’t cover payments from the Subcontractor to the Contractor which the recovery of delay damages would be.