NEC4 termination differs from NEC3 in one main way: the Client can no longer terminate for any reason unless Option X11 is included. It also adds a Corrupt Act reason (R22), moves the final payment to the new final assessment clause, and allows work to be taken out of the Scope after a stoppage.
The overall structure, with reasons, procedures and amounts due at clauses 90 to 93, is the same. This page lists what's different, as part of NEC disputes and termination.
The changes side by side
| Topic | NEC3 ECC | NEC4 |
|---|---|---|
| Client's right to terminate for its own reason | The Employer may terminate for any reason, under 90.2 | Only for a reason in the table, unless Option X11 applies |
| Corrupt Act | No reason in the table | R22 at 91.8, with stated defences for supply chain matters |
| Long stoppage | Instruction allowing work to re-start or start | Also an instruction removing the work from the Scope (91.6) |
| Final payment | Within 13 weeks of termination, at 90.4 | Under clause 53, with a conclusive final assessment |
| A certified but unpaid sum | No stated rule | In the subcontract text, the paying Party needn't pay it, if the reason is R1 to R15, R18 or R22 (90.3) |
| Bankruptcy application | Presented a petition (R1) | Presented an application (R1) |
| Administration | An administration order (R8) | In the text amended in 2019, also an administrator being appointed (R8) |
| Fee in A4 | Direct fee percentage | The fee percentage |
| Terminology | Employer, Works Information | Client, Scope |
The details in the right-hand column come from the NEC4 subcontract text with its amendments. The NEC4 ECC can differ in places, for example in how R17 and R20 appear in the table, so check your own.
Why the X11 change matters
In NEC3 a Client can end the contract with no fault at all, paying A1, A2 and A4. An NEC4 Client who wants that same freedom has to pick X11 at the start. Without it, a Client that decides to walk away has only the listed reasons. If it tried to rely on a reason that doesn't apply, it could be in breach of contract.
Some practical ways to deal with this:
- If a project's funding or approvals are uncertain, consider whether X11 should be included.
- If you're pricing as a Contractor, check for X11, and think about what A4 covers.
- In a programme of work, a Client might also stop work with an instruction (34.1), and then remove it from the Scope. That's a compensation event, and each case needs thinking through.
Corrupt Acts
A Corrupt Act is a defined term, broadly about misusing a position of trust for private gain on the contract, including undeclared commission. Termination under R22 is for the Client, and it leads to the same harsh row as a default: P1, P2, P3 with A1, A3.
A Contractor is protected for a Corrupt Act by a Subcontractor or supplier if it wasn't aware and shouldn't have been aware of it, or if it told the Client and acted to stop it as soon as it became aware. So supply chain due diligence and a clear reporting process are real protections, not just policy.
Moving to the final assessment
Under NEC3, termination has its own payment rule. In NEC4, the same final assessment mechanism applies to the amount due on termination, with the same route to its becoming conclusive. So a Party unhappy with a termination account needs to act on the dispute windows. Our guide to time limits for NEC disputes shows these side by side.
What stayed the same
- The Project Manager certifies termination, if the reason complies (90.1).
- R1 to R10 are open to either Party.
- P1 to P4 and A1 to A4 have the same broad meaning.
- R21 still mirrors the prevention event.
A checklist if you're moving to NEC4
- Update template letters: the Client, the Scope and the clause numbers. See moving from NEC3 to NEC4.
- Decide as a matter of policy whether X11 will be included in your contracts.
- Read clause 91's periods again from your own contract. Don't assume they match the NEC3 numbers.
- Check the Termination Table, as amended, on each new contract.
- Add the Corrupt Act definition to your compliance training.
- Check that your bond, guarantee and subcontract forms refer to the right terms.
- Check any Z clauses carried across from NEC3. A Z clause giving a right that the core now handles differently can create conflict.
An illustration
A fictional local authority cancels a depot project after a funding review. Under an NEC3 contract, it would simply terminate for a reason other than R1 to R21, and pay A1, A2 and A4. Under an NEC4 ECC without X11, it has no such right. Its team considers stopping the work under 34.1 and, in time, removing it from the Scope. It takes advice on the cost of each route, including the possibility that R20 becomes available if no instruction is given within the period in clause 91.6.
Related guides
- NEC Disputes and Termination
- Insolvency and NEC Contracts
- Ending an NEC Subcontract
- Termination Procedures
- Payment on Termination
See how this works in practice
Click through Contract Status with sample contracts: raise the notice, reply to it, and watch both sides of one record.
Take the guided tour Book a demo
Try the client role-play, use the free NEC tools or download free NEC templates.
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.