29 November 2016

Read the first article in the series – NEC3 Activity Schedules: get them right or suffer the pain.

Regular users of the NEC3 Engineering and Construction Contract will be well aware of the requirement in clause 61.3 for the contractor to give notice of compensation events within eight weeks of becoming aware of the event. If the contractor does not strictly comply with the notice requirements it loses its entitlement to additional time and monies.

There is more to complying with NEC3 notice provisions than meeting any specified time periods, however. All other formalities must be observed to ensure they stand as "notices" and a failure to do so could have serious consequences.

With all communications and notifications under the NEC3 the timing, form and method of service should all be considered to ensure their validity.

The key provision is clause 13 which addresses the following key formalities:

  • The form the notice can take: the NEC3 requires notices to be in a form that can be "read, copied and recorded". This means notices will need to be “in writing”, which could include electronic communications including email and web-based collaboration tools.
  • The relevant address for service: the parties will need to ensure that the relevant address (whether email or otherwise) is stated in the Contract Data or communicated to the other party. Communications must be sent to the correct address to be valid.
  • The period of reply: certain clauses have their own timing requirements (the 8-week period for compensation events being a clear example). However, where a clause does not include its own specified period, the "period for reply" (specified in the Contract Data) will apply and parties will need to ensure their communications are sent within that relevant period.

Parties should also be aware of the requirement under clause 13.7 for "notifications" to be communicated separately from other communications. So, for example, in relation to notifying compensation events, a communication dealing with several issues including the notification of a compensation event will not be valid. The intention of this requirement is not to generate extra paper work, but to ensure important contractual notifications are not buried within wider day-to-day communications.

Early and regular communication is central to the success of an NEC3 contract. Familiarity with these provisions will ensure key notifications are validly given allowing important NEC3 mechanisms to operate as intended and for key risks to be allocated fairly between the parties.

Key contact

Steven James

Steven James Partner

  • Construction and Engineering 
  • Energy and Utilities
  • Construction Disputes

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