The NEC 3 Engineering and Construction Contract

1 - Contents [Seite 7]
2 - Preface [Seite 13]
3 - Author's note [Seite 15]
4 - 1 Introduction [Seite 17]
4.1 - 1.1 Development of NEC contracts [Seite 17]
4.2 - 1.2 Characteristics of NEC contracts [Seite 18]
4.3 - 1.3 Structure of the NEC 3 Engineering and Construction Contract [Seite 20]
4.4 - 1.4 Feedback from ECC 2 [Seite 21]
4.5 - 1.5 Changes from ECC 2 [Seite 22]
4.6 - 1.6 Points of interest in NEC 3 [Seite 23]
5 - 2 Main options [Seite 27]
5.1 - 2.1 Introduction [Seite 27]
5.2 - 2.2 Contract strategy [Seite 28]
5.3 - 2.3 Option A - priced contract with activity schedule [Seite 34]
5.4 - 2.4 Option B - priced contract with bill of quantities [Seite 37]
5.5 - 2.5 Target contracts generally [Seite 38]
5.6 - 2.6 Options C and D - target contracts [Seite 41]
5.7 - 2.7 Option E - cost reimbursable contract [Seite 42]
5.8 - 2.8 Option F - management contract [Seite 43]
5.9 - 2.9 Option W1 - dispute resolution [Seite 43]
5.10 - 2.10 Option W2 - dispute resolution [Seite 44]
6 - 3 Secondary option clauses [Seite 46]
6.1 - 3.1 Introduction [Seite 46]
6.2 - 3.2 Option X1 - price adjustment for in.ation [Seite 48]
6.3 - 3.3 Option X2 - changes in the law [Seite 48]
6.4 - 3.4 Option X3 - multiple currencies [Seite 49]
6.5 - 3.5 Option X4 - parent company guarantee [Seite 50]
6.6 - 3.6 Option X5 - sectional completion [Seite 51]
6.7 - 3.7 Option X6 - bonus for early completion [Seite 52]
6.8 - 3.8 Option X7 - delay damages [Seite 53]
6.9 - 3.9 Option X12 - partnering [Seite 58]
6.10 - 3.10 Option X13 - performance bond [Seite 60]
6.11 - 3.11 Option X14 - advanced payment to the contractor [Seite 61]
6.12 - 3.12 Option X15 - limitation of contractor's liability for design [Seite 63]
6.13 - 3.13 Option X16 - retention [Seite 64]
6.14 - 3.14 Option X17 - low performance damages [Seite 66]
6.15 - 3.15 Option X18 - limitation of liability [Seite 67]
6.16 - 3.16 Option X20 - key performance indicators [Seite 70]
6.17 - 3.17 Option Y(UK)2 - Housing Grants, Construction and Regeneration Act 1996 [Seite 71]
6.18 - 3.18 Option Y(UK)3 - Contracts (Rights of Third Parties) Act 1999 [Seite 72]
6.19 - 3.19 Option Z1 - additional conditions [Seite 72]
7 - 4 Contract documents [Seite 74]
7.1 - 4.1 Introduction [Seite 74]
7.2 - 4.2 Entire agreements [Seite 75]
7.3 - 4.3 Clause 12.4 of NEC 3 [Seite 76]
7.4 - 4.4 Construction of contracts generally [Seite 76]
7.5 - 4.5 NEC 3 documentation [Seite 77]
7.6 - 4.6 Essential contract documents [Seite 78]
7.7 - 4.7 Identified and defined terms [Seite 80]
7.8 - 4.8 The contract date [Seite 80]
7.9 - 4.9 Works information [Seite 82]
7.10 - 4.10 Site information [Seite 85]
7.11 - 4.11 Contract data [Seite 87]
7.12 - 4.12 Schedules of cost components [Seite 87]
7.13 - 4.13 Ambiguities and inconsistencies in the contract documents [Seite 90]
7.14 - 4.14 Schedule of clauses referring to the works information [Seite 91]
8 - 5 Key players [Seite 95]
8.1 - 5.1 Introduction [Seite 95]
8.2 - 5.2 Others [Seite 97]
8.3 - 5.3 Actions [Seite 98]
8.4 - 5.4 The employer [Seite 101]
8.5 - 5.5 Express obligations of the employer [Seite 102]
8.6 - 5.6 The project manager [Seite 103]
8.7 - 5.7 Express duties of the project manager [Seite 106]
8.8 - 5.8 The supervisor [Seite 110]
8.9 - 5.9 Express duties of the supervisor [Seite 111]
8.10 - 5.10 Communications [Seite 111]
8.11 - 5.11 The project manager and the supervisor [Seite 116]
9 - 6 General core clauses [Seite 118]
9.1 - 6.1 Introduction [Seite 118]
9.2 - 6.2 Actions [Seite 119]
9.3 - 6.3 Identified and defined terms [Seite 119]
9.4 - 6.4 Interpretation and the law [Seite 129]
9.5 - 6.5 Communications etc. [Seite 131]
9.6 - 6.6 Instructions [Seite 131]
9.7 - 6.7 Adding to the working areas [Seite 131]
9.8 - 6.8 Early warning [Seite 132]
9.9 - 6.9 Ambiguities and inconsistencies [Seite 135]
9.10 - 6.10 Illegal and impossible requirements [Seite 136]
9.11 - 6.11 Prevention [Seite 137]
10 - 7 Obligations and responsibilities of the contractor [Seite 142]
10.1 - 7.1 Introduction [Seite 142]
10.2 - 7.2 Design obligations, responsibilities and liabilities [Seite 145]
10.3 - 7.3 Providing the works [Seite 147]
10.4 - 7.4 The contractor's design [Seite 149]
10.5 - 7.5 Using the contractor's design [Seite 152]
10.6 - 7.6 Design of equipment [Seite 152]
10.7 - 7.7 People [Seite 153]
10.8 - 7.8 Working with the employer and others [Seite 154]
10.9 - 7.9 Subcontracting [Seite 156]
10.10 - 7.10 Other responsibilities [Seite 159]
10.11 - 7.11 Express obligations of the contractor [Seite 161]
10.12 - 7.12 Express prohibitions on the contractor [Seite 165]
11 - 8 Time (and related matters) [Seite 167]
11.1 - 8.1 Introduction [Seite 167]
11.2 - 8.2 Starting and completion [Seite 170]
11.3 - 8.3 Programmes [Seite 172]
11.4 - 8.4 Revision of programmes [Seite 175]
11.5 - 8.5 Shortened programmes [Seite 177]
11.6 - 8.6 Access to and use of the site [Seite 178]
11.7 - 8.7 Instructions to stop or not to start work [Seite 179]
11.8 - 8.8 Take-over [Seite 181]
11.9 - 8.9 Acceleration [Seite 183]
12 - 9 Testing and defects [Seite 186]
12.1 - 9.1 Introduction [Seite 186]
12.2 - 9.2 Definitions and certificates [Seite 189]
12.3 - 9.3 Tests and inspections [Seite 193]
12.4 - 9.4 Testing and inspection before delivery [Seite 195]
12.5 - 9.5 Searching and notifying defects [Seite 196]
12.6 - 9.6 Correcting defects [Seite 198]
12.7 - 9.7 Accepting defects [Seite 200]
12.8 - 9.8 Uncorrected defects [Seite 201]
13 - 10 Payments [Seite 204]
13.1 - 10.1 Introduction [Seite 204]
13.2 - 10.2 Assessing the amount due [Seite 207]
13.3 - 10.3 Payments [Seite 210]
13.4 - 10.4 Defined cost [Seite 213]
13.5 - 10.5 Payments - main option A [Seite 213]
13.6 - 10.6 Payments - main option B [Seite 217]
13.7 - 10.7 Payments - main option C [Seite 218]
13.8 - 10.8 Payments - main option D [Seite 223]
13.9 - 10.9 Payments - main option E [Seite 223]
13.10 - 10.10 Payments - main option F [Seite 224]
14 - 11 NEC 3 compensation event schemes [Seite 226]
14.1 - 11.1 Introduction [Seite 226]
14.2 - 11.2 Changes in NEC 3 (from ECC 2) [Seite 228]
14.3 - 11.3 Outline of procedures [Seite 232]
14.4 - 11.4 Defining a compensation event [Seite 233]
14.5 - 11.5 Compensation events as exclusive remedies [Seite 233]
14.6 - 11.6 Fairness of the compensation event procedures [Seite 234]
14.7 - 11.7 Unusual features of the compensation event procedures [Seite 235]
15 - 12 Listed compensation events [Seite 236]
15.1 - 12.1 Introduction [Seite 236]
15.2 - 12.2 Omissions from the listed events [Seite 237]
15.3 - 12.3 Works information related events [Seite 237]
15.4 - 12.4 Employer's default events [Seite 240]
15.5 - 12.5 Employer's risk events [Seite 242]
15.6 - 12.6 Project manager/supervisor related events [Seite 243]
15.7 - 12.7 Physical conditions [Seite 247]
15.8 - 12.8 Adverse weather [Seite 250]
15.9 - 12.9 Prevention [Seite 251]
15.10 - 12.10 Measurement related events [Seite 252]
15.11 - 12.11 Secondary option clause events 238 [Seite 254]
16 - 13 Notifying compensation events [Seite 257]
16.1 - 13.1 Introduction [Seite 257]
16.2 - 13.2 Notifications by the project manager [Seite 258]
16.3 - 13.3 Notifications by the contractor [Seite 260]
16.4 - 13.4 Project manager's response to notifications [Seite 264]
16.5 - 13.5 Last date for notification of compensation events [Seite 267]
17 - 14 Quotations for compensation events [Seite 269]
17.1 - 14.1 Introduction [Seite 269]
17.2 - 14.2 Instructions to submit quotations [Seite 272]
17.3 - 14.3 Instructions for alternative quotations [Seite 275]
17.4 - 14.4 Submission of quotations [Seite 276]
17.5 - 14.5 Status of the contractor's quotations [Seite 278]
18 - 15 Assessment of compensation events [Seite 281]
18.1 - 15.1 Introduction [Seite 281]
18.2 - 15.2 Changes from ECC 2 [Seite 282]
18.3 - 15.3 General assessment rules [Seite 283]
18.4 - 15.4 Particular assessment rules [Seite 290]
18.5 - 15.5 The project manager's assessments [Seite 294]
18.6 - 15.6 Implementing compensation events [Seite 296]
18.7 - 15.7 Other .nancial remedies [Seite 297]
19 - 16 Title [Seite 299]
19.1 - 16.1 Introduction [Seite 299]
19.2 - 16.2 Employer's title to equipment, plant and materials [Seite 300]
19.3 - 16.3 Marking equipment, plant and materials [Seite 301]
19.4 - 16.4 Removing equipment [Seite 301]
19.5 - 16.5 Objects and materials within the site [Seite 302]
20 - 17 Risks and insurances [Seite 304]
20.1 - 17.1 Introduction [Seite 304]
20.2 - 17.2 Employer's risks [Seite 308]
20.3 - 17.3 Contractor's risks [Seite 311]
20.4 - 17.4 Repairs [Seite 311]
20.5 - 17.5 Indemnity [Seite 312]
20.6 - 17.6 Insurance cover [Seite 312]
20.7 - 17.7 Insurance policies [Seite 313]
20.8 - 17.8 Contractor's failure to insure [Seite 314]
20.9 - 17.9 Insurance by the employer [Seite 314]
21 - 18 Termination [Seite 316]
21.1 - 18.1 Introduction [Seite 316]
21.2 - 18.2 Summary of NEC 3 termination provisions [Seite 320]
21.3 - 18.3 Termination for 'any reason' [Seite 321]
21.4 - 18.4 Termination under section 9 [Seite 322]
21.5 - 18.5 Reasons for termination [Seite 324]
21.6 - 18.6 Procedures on termination [Seite 328]
21.7 - 18.7 Amounts due on termination [Seite 329]
22 - 19 Dispute resolution [Seite 331]
22.1 - 19.1 Introduction [Seite 331]
22.2 - 19.2 Developments in dispute resolution [Seite 332]
22.3 - 19.3 Meaning of dispute [Seite 333]
22.4 - 19.4 Adjudication under Option W1 [Seite 335]
22.5 - 19.5 Adjudication under Option W2 [Seite 345]
22.6 - 19.6 Review by the tribunal [Seite 349]
22.7 - 19.7 The Adjudicator's Contract [Seite 352]
23 - 20 NEC 3 Engineering and Construction Subcontract [Seite 353]
23.1 - 20.1 Introduction [Seite 353]
23.2 - 20.2 Core clauses - general [Seite 355]
23.3 - 20.3 Core clauses - the subcontractor's main responsibilities [Seite 356]
23.4 - 20.4 Core clauses - time [Seite 356]
23.5 - 20.5 Core clauses - testing and defects [Seite 357]
23.6 - 20.6 Core clauses - payment [Seite 357]
23.7 - 20.7 Core clauses - compensation events [Seite 358]
23.8 - 20.8 Core clauses - title [Seite 359]
23.9 - 20.9 Core clauses - risks and insurance [Seite 359]
23.10 - 20.10 Core clauses - termination [Seite 359]
23.11 - 20.11 Dispute resolution [Seite 360]
24 - 21 NEC 3 family of contracts [Seite 361]
24.1 - 21.1 The contracts [Seite 361]
24.2 - 21.2 NEC 3 Short Contract and Short Subcontract [Seite 362]
24.3 - 21.3 NEC 3 Term Service Contract [Seite 364]
24.4 - 21.4 NEC 3 Framework Contract [Seite 368]
24.5 - 21.5 NEC 3 Professional Services Contract [Seite 368]
24.6 - 21.6 NEC 3 Adjudicator's Contract [Seite 370]
24.7 - 21.7 Concluding comment [Seite 370]
25 - Table of cases [Seite 371]
26 - Table of clause references [Seite 375]