Clause 60.1(18) makes a breach of contract by the Client a compensation event, if it isn't already one of the other compensation events. It's the catch-all entry, so it pulls most Client defaults into the same compensation event process as everything else: notify, quote, assess.
The entry is in both NEC3 and NEC4 ECC. Since it comes last in the order of testing, your first step is to look for a more specific entry. Citing the right one gives a clearer test and fewer arguments.
What triggers it
- There's a breach by the Client. Not the Project Manager exercising a contract power, and not simply something the Contractor dislikes. The contract has to require something of the Client that hasn't happened, or forbid something that has.
- No other compensation event covers it.
- It has an effect. As with all events, clause 61.4 needs an effect on Defined Cost, Completion or a Key Date.
Test these first
| The Client's failure | The specific entry |
|---|---|
| Late access | 60.1(2) |
| Something it provides, late against the programme | 60.1(3) |
| The Client's own work outside the programme or Scope | 60.1(5) |
| Test materials or facilities | 60.1(16) |
| A fault or a listed risk | 60.1(14) |
| Anything else that breaches the contract | 60.1(18) |
A useful consequence: when something fails a specific entry on a technicality, 60.1(18) may still pick it up. Suppose the Scope requires the Client to hand over a stated permit but the Accepted Programme never showed a date. The 60.1(3) test can't be met as there's no date. If the Client has still failed in a clear duty, the Contractor may argue breach. Expect a discussion on when the duty fell due.
Late payment is usually a different route
Late payment is a tempting example, but the contract gives its own remedy. Clause 51.2 provides for interest on late payments, and there may be statutory rights too. See clause 51 and the guide to Option Y(UK)2. Don't reach for this entry for ordinary late payment before reading those.
How it is usually evidenced
- The contract term that was breached. Name it.
- Records of what the Client did or didn't do.
- Why no other entry fits, briefly stated in the notification.
- The effect on the works, in the normal way.
Worked example
A fictional office refurbishment on Option A, with illustrative figures. The Scope says the Client will keep a shared service yard clear during working hours, because it's the Contractor's only delivery route. For two weeks, the Client lets a tenant use it for a sale, with vans parked across the access.
It isn't access to the Site, because the yard is outside the Site boundary. It isn't Others working on the Site. It isn't a listed liability either. But the Scope gave the Client a clear duty, and that duty was breached. The Contractor warns on day two and notifies under 60.1(18) on day five.
| Effect | Defined Cost |
|---|---|
| Hand-balling deliveries from the street, plus a traffic marshal | £5,600 |
| Crane delivery rebooked | £1,900 |
| Slower installation over the two weeks | £3,500 |
| Subtotal | £11,000 |
| Fee at an illustrative 10% | £1,100 |
| Change to the Prices | £12,100 |
Non-critical work absorbed the slowdown, so the Completion Date doesn't move. The result is a modest figure on a clear record, which is how this event works when it's handled early.
How it is assessed
A breach is assessed like every other compensation event, under clause 63: the effect on Defined Cost plus the resulting Fee, and the effect on planned Completion. It isn't a damages claim, and items that don't sit in Defined Cost won't come through this route. Clause 63.6 in NEC4 (63.4 in NEC3) says the rights to changes in Prices and dates are the only rights the Parties have in respect of a compensation event. Whether any other claim survives alongside that is a legal question, so take advice if the sums are large.
For most breaches, nothing from the Project Manager will have caused it, so the Contractor notifies and the eight-week time bar applies. Describing an event as a breach doesn't sidestep this.
What people get wrong
- Using it first. A notification that leads with breach, when 60.1(2) fits perfectly, gives the other side an easy argument. Cite the specific entry, and add this one in the alternative if you're not sure.
- Using it for the Project Manager's judgement. A Project Manager's decision you disagree with isn't automatically a Client breach. Use the entries for late replies, changed decisions and withheld acceptances, or take it to a dispute.
- Expecting damages. Being assessed on Defined Cost and the Fee can feel low after a breach. That's the bargain the contract strikes.
- Project Managers rejecting it as "not listed". If there's a breach, it is on the list. The question is whether a breach happened.
- Assuming the entry survives unamended. Check your Z clauses, as amendments can narrow this entry.
Related guides
- NEC Compensation Events: The Complete Guide
- Compensation Event: Prevention
- Compensation Event: Quotation for a Proposed Instruction Not Accepted
- Compensation Event: Additional Events in the Contract Data
- Compensation Event: Materials or Facilities for Tests
- Compensation Event: A Corrected Assumption
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