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Lawyers warn contractors over NEC3

Contractors could be forced to foot the bill and face legal action, for delays caused by the client on Olympic projects, construction lawyers warned this week.
A clause added to the New Engineering Contract 3, which will be used by the Olympic Delivery Authority (ODA) on 2012 projects, prevents firms claiming compensation from clients later than eight weeks after they first became aware of a problem onsite.Three weeks ago the ODA confirmed it would use the NEC 3 contract on the majority of 2012 projects (NCE 27 July).Barrister Hamish Lal warned that clause 61.3 could overrule the prevention principle, where a contractor is protected from being sued for liquidated damages if the reason for late completion was an act of hindrance or prevention by the employer.'If, for example, the ODA delays delivery of certain information, then the contractor may not see any reason to report it straight away. But if the project ends up being late as a result, the contractor would then seek to be paid for its extra time. The client, however, could say the contractor hadn't notified it within the eight weeks and refuse to pay.'In addition to this, Construction Confederation legal advisor John Bradley said contractors could then be sued by the client for failing to finish on time.'The problem is, there's no legal precedent for this in English law,' he added.Related links:Today's top stories

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