The NEC4 suite of contracts, published in 2017, is a commonly used form of contract in the construction industry. In the early months of 2023, several amendments have been published to improve its functionality and clarity.
One of the key changes is the introduction of additional secondary option clauses. The intention of these clauses is to provide greater flexibility to the parties to a contract as it allows them to make alterations to certain aspects of the contract, some being payment mechanisms and the scope of works.
The aim is to help ensure the contract stays relevant and flexible.
Secondary Option X22, the Early Contractor Involvement (ECC) has been subject to several changes to facilitate the communication between both parties to run smoothly and ensure early engagement. The changes include newly updated provisions for early works, cost savings and risk management, showing the importance of shared aims and how communication is vital to delivering successful projects.
Another substantial change is the inclusion of further guidance on dispute resolution. The amendments provide a more detailed review of the various methods of dispute resolution available under the contract, including adjudication, mediation, and arbitration.
These changes aim to encourage earlier resolution of disputes which, in turn, will avoid costly and time-consuming legal battles.
As the Schedule of Cost Components (SCC) is an important part of the NEC4 contract suite, the amendments have been made aim to replicate the changes throughout the industry. One change includes the inclusion of new cost components, including environmental mitigation costs, thus reflecting the importance of sustainability.
Another change is the clarity of cost components to help limit confusion. The amendments to the SCC demonstrate the NEC’s desire to remain on point with the ever-changing advances of the industry and assist parties with aspects of the contracts including managing the costs reasonably and clearly.
The contractor’s liability concerning design has amended to include a new core clause which outlines that the contractor is to provide a design which fits with the Employer’s requirements and a new secondary option allowing the employer to create the design. These changes have been made to help maintain a clear understanding for both parties involved on who hold liability for design, which ultimately reduces the risk of disputes.
Overall, the NEC4 amendments for 2023 aim to make the contract suite even more effective and user-friendly for all parties involved. The amendments incorporate greater flexibility, more detailed guidance on dispute resolution, and clause amendments to help ensure that projects are completed on time, on budget, and finished to a high-quality standard.
Please note. The information provided on this website is NOT LEGAL ADVICE and is for information purposes only. No action or inaction should be taken due to this information, or any reliance placed upon this information. Please note where legal advice is required this should be obtained by an appropriate qualified legal practice and no information provided within this website should form the basis of any legal, contract, or commercial decision. K J Taylor Consulting Ltd. is a commercial quantity surveyor and not a construction legal advisor.