NEC3 ECC - Option A: Termination Cl 91.4 (R16)

NEC3 and NEC4 Contracts
1

The Employer is continuously failing to make payment in the timescales provided in the contract Data (CD = 37 days from the assessment date).

We (the Contractor) are seeking avenues to address this late payment and in accordance with Clause 91.4 may review termination if the Employer fails to make payment on a certified amount within 13 weeks of the certificate (R16).

Q1: If the Employer fails to make payment within the 13 week timescale, but makes payment say on week 15, can we as the Contractor still terminate? Or do we have to notify termination prior to payment (post week 13)? I.e. if the Employer makes payment albeit later than than Cl91.4 we cannot terminate?

Q2: Is there a timescale for the Contractor to notify termination regarding Cl91.4?

Many Thanks

2

Clause 91.4 is clear in that the right to terminate arises once the Employer does not pay an amount certified within 13 weeks of the date of the certificate.

There is no qualification to say that this right no longer applies if payment is subsequently made in full, which is the case with the right to suspend performance under the ‘Construction Act’ for non-payment.

To maintain this right, however, you would need to be sure that you are not prevented (estoppel) by your subsequent actions, either by possibly not taking timely action or by taking action which can be construed as foregoing this right, which has been relied upon by the other party.