Construction contractual provisions - Coronavirus (COVID-19)

The key clauses of the both JCT 2016 and NEC4 that are relevant in relation to Coronavirus (COVID-19) are those dealing with the contractor’s entitlement to time and money in the event of delay, and termination.

In respect of time and money for delay, JCT separates these.  It may be that the Coronavirus (COVID -19) will entitle a contractor to additional time (and relief from liquidated damages) if it can be shown to be an event of force majeure, although do be aware that not all Coronavirus (COVID-19 ) events will automatically amount to force majeure.  Even if it is an event of  force majeure, under JCT that does not entitle a contractor to extra money.

NEC4 deals with delay  by way of compensation events. If a contractor can show that it falls within clause 60.1 (19) then it is entitled to a compensation event,  which may entitle it to  both extra time and money.

As to termination, either party may be able to terminate, if they can show a force majeure event has occurred, provided the suspension period referred to in the Contract Particulars has been invoked and has expired.

So far as NEC4 is concerned, the most obvious termination clause is clause 91.7 under which only an employer can terminate.

Termination is a draconian step and should not be undertaken without seeking specific legal advice.

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