Stopping payment on a target contract: Option C

I have recently read the below statement:

" It is common when using the NEC form of target cost contract for Employers to cease payment to contractors if the target cost is exceeded by a stated percentage."

Surely this is fundamentally wrong under Cl.10.1 and Cl.53.1. The Employer/PM should pay all amounts due and recover any amounts due back via other methods (i.e. retention).

In an un-amended contract, you are correct.

However, the situation you are describing is a reasonably commonplace amendment. A suggested edit to your statement, in bold italics.

β€œIt is common when using the NEC form of target cost contract for Employers to amend the Contract to cease payment to contractors if the target cost is exceeded by a stated percentage.”

I could agree with that.

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Thanks, nice clear reply Andy,