NEC4 and Client’s Risks

The changes contained in the NEC4 ECC are not as clear as I would have liked, and in some respects the new edition rather muddies the proverbial construction waters. However, one useful provision (for both sides) is the compensation event at clause 60.1(14) which identifies those events comprising “Client’s risks”. The change is subtle but potentially significant. Under NEC3 Client’s risks were any event “stated in this contract”. But what is meant by ”this contract” has often been a source of contention and could be construed very broadly to include anything contained in the ancillary documentation to the main contract. In particular, some contractors have insisted that “this contract” includes the Risk Register and therefore any Client risks contained therein (and there are often many) were Client risks for the purposes of clause 60.1(14). To be clear, the Risk Register is intended to be nothing more than a tool for the Project Manager to manage risk. So it’s good news that clause 60.1(14) of NEC4 refers to Client’s risks as being those “stated in these conditions of contract”, thereby limiting these risks to those contained in the Core Clauses (mainly clause 80.1), the W to Z clauses and those listed in the Contract Data, where additional Client’s risks can be listed out, if there are any.

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