Under an unamended NEC3 ECC, assuming that Secondary Option clause X2 applies, should a known upcoming change in law be notified even if it is currently planned to come into force after the current Completion Date? Though at such time the effects would assumedly be nil and hence would likely be responded to as such in accordance with clause 61.4, in the event the Contract was subsequently extended in duration beyond the date that such change in law would come into effect could the effects of such a change in law be time barred under the provisions of clause 61.3? Obviously, any impacts could be sought to be fairly addressed within the subsequent Compensation Event(s) which cause the Completion Date to be extended however this could seemingly pose a potential conflict / dispute which would be better to be avoided and thoughts as to how this should best be managed under the Contract would be welcome.
Hi Dave,
yes it should be notified as soon as the Contractor becomes aware of the planned change and it should then be dealt with by the PM under clause 61.6. The PM should make assumptions as to what the circumstances might be that could affect time and cost, if there are none then the PM could stated that assumption and the quotation from the Contractor would be zero time and cost. If later there are effects from the change which are not covered or caused by any of the other compensation events in the contract, the PM would have to correct its assumption and notify compensation event 60.1(17).
That I believe is the fairest way of dealing with the matter whilst operating within the bounds of the contract conditions.
It is worth noting that under NEC3 clause 61.7 a compensation event can be notified up and until the issues of the Defects Certificate, however the wording of clause 61.3 in NEC3 is different to that in NEC4 so the Contractor needs to notify immediately they become aware of the event in order to avoid the 8week time bar under NEC3. In NEC4 the wording of 61.3 has been changed to, “8 weeks of becoming aware that the event has happened”, rather than just aware of the event. Therefore under NEC4 I believe that the 8 weeks would start from when the change in law takes effect and not when it was promulgated, but I can see how some might see that differently, so to be safe and to avoid disputes, Contractor’s should notify and PMs should state assumptions, this protects both of the Parties.
Happy to discuss.
Steve, thanks for the prompt response. This aligns with my view / recommendation but always good to validate.
Don’t forget the early warning first!