NEC ECS: Is payment on termination due 13 weeks after notice of termination or 13 weeks after issue of the certificate of termination

The Contractor gave notice of termination to his Subcontractor, but delayed the certificate of termination by several weeks. In essence, is termination effected for purposes of the final payment, on date of notice or date of issue of the termination certificate? The issue of procedures is clear, the matter of payment not so clear.

It must be when the termination certificate has been issued, as various actions, including the Subcontractor being obliged to stop work, commence when this has occurred. Note that the ECS contract states 14 weeks to certify payment (NEC3 and NEC4 under Final Assessment), with 13 weeks in the ECC.

The Contractor should have issued a termination certificate ‘promptly’, following notification. There is no timescale stated for ‘promptly’, although this would, presumably, depend upon how quickly the necessary actions could be taken, that is to check that the reason complies with the contract and that there is a right to terminate. In your case it would appear that the matter is fairly straightforward, especially as termination by the Contractor can be for any reason under NEC3, although the reason itself would influence the amount of payment certified.

Although the delay in issuing the termination certificate could extend the final payment date (note the time period stated is a maximum amount of time), the contract continues during this period of ‘deliberation’ so the payment procedure under core clause 5 should continue in the interim. If the Contractor has not compliantly administered this, then the Subcontractor has particular rights under the Construction Act accordingly.