NEC Contract Definitions: Glossary of Key Terms

NEC contract definitions are the capitalised and italic terms that carry most of the contract's meaning. "Defect" isn't simply poor work, "Others" excludes people you'd expect it to include, and "the Prices" means something different on each main Option. If you read these terms in their everyday sense, you'll eventually get a clause wrong.

This glossary explains what each term does on a real job and where it causes trouble. It is written around the NEC4 Engineering and Construction Contract (ECC), with NEC3 differences noted. It explains the terms in our own words and doesn't replace the definitions in your contract, so keep your own copy to hand. It sits within the wider guide to NEC contracts.

How NEC terms work

Clause 11 sets the convention that makes the whole document readable. There are two kinds of special term, and they look different on the page.

Kind	How to spot it	Where its meaning comes from	Example
Defined term	Capital initials	The list in clause 11.2 of the core clauses, or of the main Option or secondary Option you're using	Defect, Completion, the Prices
Identified term	Italics	The entry you make in the Contract Data	defects date, period for reply, the works

The capitals are not decoration. "Completion" with a capital is a test the contract sets out, whereas "completion" in a site report may mean nothing more than the last operative leaving. Some terms come as a pair, one of each kind. The completion date is what you write in the Contract Data; the Completion Date is that date as later changed under the contract.

Because definitions can sit in the Options as well as the core, the numbering is not constant. Don't quote an item number from memory. NEC3 and NEC4 number their lists differently, and a main Option adds items of its own.

The time and programme terms

These decide when the Contractor is on time, and what any delay is measured against.

Accepted Programme: the single programme that counts at any moment, and the baseline for assessing delay.
Completion: a test of what has been done and which Defects remain, not a date and not a ceremony.
Completion Date: the date the Contractor has to reach Completion by, which moves only in ways the contract allows.
Contract Date: the day the contract came into existence, which is the viewpoint for judging some important risks.
Key Date: an interim date tied to a stated condition, usually protecting the work of someone else.

The quality terms

Quality disputes usually begin with someone using the word "defect" more loosely than the contract does.

Defect: work that departs from the Scope or, for the Contractor's own design, from the law or the accepted design.
Defect correction period: the time the Contractor has to put a notified Defect right, which can vary by type of Defect.
Defects date: the cut-off for searching for and notifying Defects under the contract's procedure.
Defects Certificate: the closing statement of what is still uncorrected, or that nothing is.

The money terms

These terms decide what gets paid. Their meaning shifts with the main Option, which is why quoting them without saying which Option you're on causes so much confusion.

Prices: what the Contractor priced under the chosen Option, which works as a payment basis on some Options and as a target or a forecast on others.
Price for Work Done to Date: the main figure in each assessment, measuring completed work on some Options and forecast cost on others.
Fee: the percentage the Contractor adds to Defined Cost, tendered in the Contract Data.
People: not a term clause 11.2 defines at all, though the word matters a great deal in clause 24 and the cost schedules.
Equipment: what the Contractor uses to build the works but doesn't leave behind in them.
Plant and Materials: what ends up as part of the works, and which also has its own rules on ownership.
Subcontractor: a narrower group than the everyday word suggests, and a group that changed between NEC3 and NEC4.

The place and scope terms

These terms set the physical limits of the job and what the Contractor has signed up to do.

The works: the identified description of what is being delivered, which sits behind Completion, the Scope and much else.
Scope: the NEC4 name for the information that specifies the works and constrains how they are built.
Works Information: the NEC3 name for the same idea, still in use on many running contracts.
Site: the area inside the stated boundaries, plus the space above and below that the work affects.
Site Information: the description of the Site and its surroundings, which feeds the physical conditions compensation event.
Working Areas: the Site plus any other areas identified for this job, and the line that drives much of what is recoverable as cost.
Task: the unit of work called off by a Task Order, mainly in term service contracts.

The people and record terms

These terms say who is inside the contract and where key decisions and data are written down.

Parties: only two organisations, which leaves out the Project Manager and the Supervisor.
Others: everyone outside the contract team and the Contractor's supply chain, including many utilities and neighbouring contractors.
Contract Data: the two-part schedule that supplies the facts for this particular contract.
Early Warning Register: NEC4's live list of matters and agreed actions.
Risk Register: the NEC3 equivalent, whose name leads people to confuse it with their own project risk log.

The general clauses behind the definitions

Section 1 of the core clauses sets the rules for how everyone behaves and communicates, so it belongs alongside the terms themselves.

Clause 10: acting as the contract says, with mutual trust and co-operation in how you do it.
Clause 11: the structure of identified and defined terms described above.
Clause 13: the form communications take, when they take effect and how replies work.
Clause 14: what acceptance does and doesn't mean, delegation, and the power to change the Scope.
Ambiguities and illegal requirements: what happens when the documents conflict or ask for the impossible, and how the numbering differs by edition.
Period for reply: the default clock on most responses, and what a missed reply can cost.

Terms renamed between NEC3 and NEC4

Moving between editions trips people up because the concepts stayed but the labels changed. The NEC4 terminology guide covers the wider changes. The ones that matter most in this glossary are these.

NEC3 ECC	NEC4 ECC	What to watch
Employer	Client	Old template letters often still use the NEC3 word
Works Information	Scope	The same role, so a copied specification may need updating
Risk Register	Early Warning Register	NEC4 added a first issue and a regular meeting interval
Risk reduction meeting	Early warning meeting	The purpose is the same, with a wider set of tasks in NEC4
Two fee percentages	One fee percentage	NEC3 prices subcontracted and direct work separately

Four mistakes these definitions prevent

Treating a snag as a Defect, or a Defect as a snag. A finish you dislike isn't a Defect if the Scope allowed it. A tidy piece of work that departs from the Scope is one.
Quoting a term from another Option or edition. A statement about "the Prices" on an Option A job can be wrong on Option E, and a number that's right for NEC3 can point to a different item in NEC4.
Assuming the Project Manager is a Party. The Project Manager runs the contract but can't, on their own authority, agree a change to its terms.
Leaving Contract Data blanks. Many clauses simply refer to an entry there. If the entry is missing or vague, the clause may not work as intended.

How to use this glossary

When a term comes up in a dispute or a letter, read three things in order. First, read the definition in your own contract, including any Z clauses that change it. Next, read the clause that uses the term, as the definition only makes sense in that setting. Then read the relevant page here for what tends to go wrong. For how these terms feed day-to-day administration, see the guides to managing NEC contracts and to compensation events, which rely on these terms more than any other part of the contract.

Other NEC forms use the same drafting approach with their own vocabulary. The Professional Service Contract, Term Service Contract and subcontracts each adapt the terms, so the party names and some definitions will differ from those on these pages. The guide to NEC contract types explains which form uses which roles.

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This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.

NEC Definitions: A Glossary of Key Terms