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NEC 4 Contracts

June 2017 - Issue 94

The NEC 4 suite of contracts were launched on 22 June 2017.

It should be noted that all NEC 3 contracts that have already been entered into will continue to be valid and enforceable for the remainder of their limitation periods. Furthermore, NEC 3 experience will not have been wasted as the NEC 4 suite is “an evolution, not a revolution”. The core principles of the NEC 3 remain the same in the NEC 4, but users will need training to understand the differences and the practical consequences of these.

While the NEC 3 suite of contracts stopped being updated as of 22 June 2017, they can still be used on new projects. However, recent changes in law and policies will only be updated in the NEC4. The equivalent positions will therefore only be able to be reached by including appropriate Z clauses.

There will be 2 new forms of contract under the NEC 4 –

Terminology used in the Engineering and Construction Contract has also changed for the NEC 4.

NEC 4 contains core clauses that were not included in NEC 3 covering things such as assignment, bribery, confidentiality, a new compensation event and (in main options C, D, E and F) procedures for agreement of final accounts which become conclusive unless challenged in time. In addition, the NEC 4 contains tiered dispute resolution procedures and secondary options which were not included in the NEC 3 including for BIM, change to scope for lifecycle cost reduction, collateral warranties, design and build options and Early Contractor Involvement.

If you/your organisation would be interested in receiving training regarding the detail of the updates, do get in touch!

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