NEC4 ECC: Can the Contractor be time barred when claiming for an extension to the Completion Date or an increase to the Prices?

If an event occurs which has not arisen from a fault of the Contractor and the event is one of the compensation events listed in the contract, then the Contractor may be entitled to be compensated for any effect the event may have in the form of a change to the Prices, the Completion Date and/or a Key Date.

If a compensation event occurs as a result of the Project Manager or the Supervisor issuing an instruction, notification or certificate, or changing an earlier decision, the Project Manager should notify the Contractor of the compensation event at the same time as the communication. If the Project Manager fails to notify the Contractor of the compensation event, the Contractor may notify the Project Manager. However, the Project Manager remains responsible for notifying the Contractor of a compensation event in these instances and the Contractor cannot be time barred as a result of failure to notify the Project Manager of the compensation event.

Should an event occur, or the Contractor expects that an event will occur, which the Contractor believes is a compensation event, the Contractor must notify the Project Manager of the event. However, if the Contractor fails to notify the Project Manager of the event within eight weeks of becoming aware that the event has happened, the Contractor is time barred under the contract and is not entitled to a change to the Prices, the Completion Date and/or a Key Date.

The Project Manager or the Contractor may not issue notice of a compensation event after the Defects Certificate has been issued. As such, should an event occur, after Completion but within eight weeks of the Defects Date, which is not as a result of the Project Manager or the Supervisor issuing an instruction, notification or certificate, or changing an earlier decision, the Contractor must notify the Project Manager of the compensation event in less than eight weeks, so as to ensure that the notice is issued prior to the Defects Certificate and hence, prevent the Contractor from being time barred.

The Contractor’s entitlement to a change to the Prices, Completion Date and/or a Key Date in respect of a compensation event is limited to the Contractor’s rights under the contract. Accordingly, the Contractor may not make a claim for damages resulting from a compensation event, thus preventing the Contractor from trying to bypass the time limits and processes in the contract.

Relevant clauses: 61.1, 61.3, 61.7, 63.6

Produced by Andrea Rae, Head of Legal and Commercial at Stradia, in conjunction with Quantity Surveyors International

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September 2021

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