Frequently Asked Questions

Question
We are the employer on an NEC3 ECC. Clause 25.2 states we can recover costs incurred for ‘services and other things’ not delivered as per the works information. We are incurring costs due to delayed completion by the contractor, such as storage for furniture that has been ordered but cannot be fitted as the building is not ready. Is this a legitimate use of the clause, and is it affected by option X7 on delay damages, which is also in affect? If this use of clause 25.2 is valid, is it limited to actual costs or could other costs such as loss of earnings be considered?
The simple answer is no, you cannot use clause 25.2. That is for not providing services and things stated in the works information − it does not apply to completion of the works themselves. However, if the contractor fails to achieve completion by the completion date, it is in breach of clause 30.1 of the contract. This is assuming of course that the delay is not due to the effects of any compensation events. As option X7 is included in the contract, you are able to recover the stated damages for that breach from the contractor under clause X7.1. Your project manager should make that deduction from the amount otherwise due under the third bullet of clause 50.2. If option X7 had not been incorporated, you would still have been able to recover damages for the breach under common law. However, you would need to consult a lawyer as to how you would do this and what damages you would be allowed to claim for.

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