NEC ECS: Termination certificate - what should it look like and are we obliged to issue one?

Due to our company that is currently under financial stress, the company was put under “Rescue”, due to this one of our Sub-Contractor’s terminated contract (also due to non payment by us). We accepted their termination letter, stating why they wanted to terminate, but now they want a termination certificate, what is stated in this termination certificate? Which clauses is used? Should we issue a termination certificate if they are terminating?

Irrespective of which Party terminates, the Contractor is required to issue the termination certificate (assuming the termination is valid) see clause 90.1. Please check that the termination is valid.

I’m not aware of a standard termination certificate but would suggest that as a minimum it should state:

Contract name/Subcontractor name/Order reference/scope of works/reason for termination (taken from the Termination Table eg R1)/procedure on termination (taken from the Termination Table, eg P1 and P4)/payment on termination (taken from the Termination Table) eg A1 and A2).

Looking at the table in clause 90.2, it is the Contractor which is terminating for one of Reasons R1 to R10 … I am both not an insolvency practitioner and, if I was, you haven’t given enough detail to establish exactly which of the reasons it is.

Regardless, Reasons R1 - R10 have the same procedures to go through P1 and P4 and the same amounts due (A1, A2 & A4).

P1 is in clause 92.1 : the Employer may complete the works and may any Plant & Materials to which you have title e.g. paid for and marked if outside the Working Areas or it is within the Working Areas (see clause 70.1 & 70.2)

P4 is that the Contractor leaves the Working Areas with their Equipment.

I could go into the detail of the amounts due, but I won;t so what should the Termination Certificate state ?

I would thought a ‘Termination Certificate’ contains who is terminating Party and the reason for terminating which is matched to one of the Reasons in the contract. Then a short statement, saying something like, as a result, in accordance with the table in 90.2, the procedures to be followed are P1 and P2, and the amounts due A1, A2 & A4. Details to be agree.