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Answered: NEC3 ECSC - Cancellation Charges and Stand Down

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I presume you are referring to the Engineering and Construction Subcontract (ECS) and NOT the Engineering and Construction Short Contract (ECSC), as you mention main Option A..

This situation looks very much like it should have been initiated by an instruction to stop the works, given under clause 34.1 of the ECS.  This is a compensation event under clause 60.1 (4).

The assessment is based on the assumption that the Subcontractor has reacted competently and promptly and that any additional cost is reasonably incurred (clause 63.7).  In this instance 'reasonably' is based on the balance of probabilities and assessed according to the circumstances which existed at the time, taking account of the factors you have mentioned.

I agree with the statement about data protection as they are a data controller under the terms of the GDPR and must process information in accordance with the 'key principles'.

The problem for the Subcontractor is that they won't get paid for this under the contract until the CE is implemented, so should be keen to resolve this matter in a timely manner.  On the other hand your attempt to establish a 'fair quantum of payment' should be pursued within the boundaries of contractual authority and in accordance with the contract principles.

Easy to say in hindsight, but this situation could have been avoided by discussing how the compensation event was to be dealt with at the outset (clause 62.1) and by providing assumptions as appropriate (clause 61.6).

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