NEC (New Engineering Contract) contracts are a common standard form engineering contract used in the UK and overseas where English law is implemented. Whilst they were designed for engineering not building projects, they can be and often are easily adapted for the latter.
The first NEC was produced in 1993. The latest contract suite is the NEC4 and that was released in 2017. NEC came to the fore on large infrastructure projects in places such as Hong Kong.
As with the JCT contracts, new suites of NEC contracts are released irregularly, each one aiming to update and improve on the last.
NEC4 contracts are clear, simple and written in plain English, using language and a structure which is straightforward and easily understood (NEC website).
A core obligation on the parties under an NEC4 contract is that they must act in a spirit of mutual trust and co-operation. That contrasts sharply from traditional contracts like JCT, where the relationship is far more adversarial, each party succeeding often at the other’s expense. Running throughout NEC are clauses designed to avoid conflict and promote dialogue: the result is that the programme and budget are continually updated and agreed as changes and events happen. There should be no surprises at the end of an NEC4 Contract (NEC website).
Ridgemont are very experienced in advising on NEC contracts and on disputes that arise out of their implementation. This is at the heart of what we do.