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Compensation event claims under the NEC4 Engineering and Construction Contract—flowchart

Compensation event claims under the NEC4 Engineering and Construction Contract—flowchart This flowchart illustrates the process of making a compensation claim for additional time to complete the works and/or for additional payment under the NEC4 Engineering and Construction Contract. A flowchart setting out the process in respect of proposed instructions is available in Proposed instruction process under the NEC4 Engineering and Construction Contract—flowchart. For more information on

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Compensation event claims in the NEC3 Engineering and Construction Contract—flowchart

Compensation event claims in the NEC3 Engineering and Construction Contract—flowchart This flowchart illustrates the process of making a compensation event claim for additional time to complete the works and/or for additional payment under the NEC3 Engineering and Construction Contract. For more information on the NEC compensation regime generally, see Practice Notes: NEC contracts—interpreting the list of compensation events (clause 60) and NEC

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Termination on insolvency in construction contracts

Where a party to a construction contract becomes insolvent, the consequences of this insolvency are set out in the Insolvency Act 1986 (IA 1986). However, the contract may itself provide expressly for what is to happen where a party, usually the contractor, becomes insolvent.Following the implementation of Corporate Insolvency and Governance Act 2020 (CIGA 2020), suppliers have been prohibited from exercising contractual termination rights arising from insolvency situations through the introduction of a new section 233B of the IA 1986. CIGA 2020 represents a significant development to insolvency law in the UK and it may have an impact on supply chains in the construction industry.The IA 1986The IA 1986 deals with both the bankruptcy of individuals and with a winding up of companies. Where an individual who is a contractor becomes bankrupt, the contract will pass to the Trustee in Bankruptcy. Where a winding up order is made against a company trading as a contractor, the benefit and burden of the contract will remain with the company, the liquidator having...

NEC contracts—insurance

This Practice Note considers the allocation of risks and the insurance requirements in the NEC Engineering and Construction Contract (ECC). It considers the type of insurance to be maintained by both parties including Contractor’s All Risks insurance and public liability cover. For a more general background on the NEC3 and NEC4 suite of contracts, see Practice Note: NEC contracts—introduction.For details of how insurance is dealt with under other standard form contracts, see Practice Notes: JCT contracts—insurance, FIDIC contracts 2017—insurance and FIDIC contracts (pre-2017 editions)—insurance.This Practice Note covers both the NEC3 and NEC4 editions of the ECC. For consistency, the term ‘Client’ is used throughout as this is the term used for the developer/employer in the NEC4 contracts (the NEC3 ECC uses the term ‘Employer’). For a glossary of NEC terms, see Practice Note: NEC contracts—glossary. Where no distinction is made between clause numbers, the clause numbers throughout this Practice Note refer to both the NEC3 and NEC4 versions of the ECC.Regardless of whether the parties choose to amend the standard...

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Letter to developer client at the start of development project

Letter to developer client at the start of development project To: [insert client name and address] Date: [insert date] Dear [contact name] [Project name/Address] Thank you for instructing us in relation to [description of project and address]. So that we have as much information as possible at the outset of this project, and to highlight any key issues, I would be grateful if you could confirm the following and bring any relevant documents [including those listed in the schedule to this letter] to our meeting on [date]: The works • A full description of the intended project (ie intended floor area, how many floors, any car parking, etc) • Will the works constitute the construction of, or building works to, a ‘higher-risk building’ for the purposes of the Building Safety Act 2022? • Intended start on site date • Intended completion date • Estimated construction cost • Have any members of the design/construction team been selected, particularly the principal designer and principal contractor? • Has a...

NEC4 PSC—Form of Agreement and Z clauses

NEC4 PSC—Form of Agreement and Z clauses Agreement in relation to [insert brief details of the works/project] at [insert address of works] (Incorporating (inter alia) the NEC4 Professional Services Contract 2017 with January 2019 Amendments, October 2020 Amendments and January 2023 Amendments as modified and supplemented in the manner indicated in this Agreement and the Schedules hereto). This Agreement is made on the [insert number] day of [insert month] 20[insert year]. Parties 1 [insert name of the Client] (company registration number [insert number]) whose registered office is situated at [insert address of the Client] (‘the Client’), 2 [insert name of the Consultant] (company registration number [insert number]) whose registered office is situated at [insert address of the Consultant] (‘the Consultant’) Background (A) The Client wishes for certain works, namely [insert brief details of the works/project] as more particularly described in this contract, to be executed. (B) The Client wishes to appoint the Consultant and the Consultant has agreed to be appointed in accordance...

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Construction weekly highlights—17 April 2025

This week's edition of Construction weekly highlights includes an announcement from the Joint Contracts Tribunal (JCT) regarding its forthcoming Target Cost Contract, analysis of a case in which the Technology and Construction Court (TCC) considered whether a substation owner had been entitled to implement a more expensive scheme of remedial works (Southern Electricity v OCU Modus), a case in which the TCC dismissed a claim against a consultant on the basis that the defects in dispute arose from workmanship and not design (MJS Projects v RPS Consulting), and publication of the Office for National Statistics (ONS)’s construction output for February 2025