A missed Key Date under NEC costs you whatever additional cost the Client has actually paid or will incur as a result, and nothing else. It isn't a daily rate: if the Client has no extra cost, you pay nothing, however late you were.
What decides it is causation and evidence. The rule is clause 25.3, with the same number in the NEC4 Engineering and Construction Contract (ECC) and NEC3. For the basics, see the Key Dates guide; other live problems are in NEC questions answered.
What to do now
- Record the day the Condition was met, with evidence. The Project Manager's assessment period runs from that date: four weeks in NEC3 ECC, five weeks for the Contractor under the NEC4 subcontract. Look up the figure in your own NEC4 ECC.
- Ask whether you caused it. If a compensation event held up the Condition, the Key Date itself should move (63.5). Notify any event you haven't, within eight weeks of becoming aware of it (clause 61.3).
- Warn now if the date is still ahead of you. Delay to a Key Date is a matter for an early warning under 15.1 (16.1 in NEC3). A warning gives others the chance to re-book before cost is incurred, which is your main way of limiting this bill.
- Find out who is affected. Ask which of the Client's contractors were due to start, and when they actually mobilised.
- Ask for the build-up when an assessment arrives, and test each line against the questions below.
Testing the Project Manager's figure
| Question | Why it matters |
|---|---|
| Is it additional cost of carrying out work, or an extra amount paid to Others? | Those are the two kinds the clause covers. They have to relate to work on the same project |
| Did it happen because of the missed Condition? | A follow-on contractor who wasn't ready anyway cost the Client nothing because of you |
| Has it been paid, or will it really be incurred? | A forecast is allowed, but it needs a basis |
| Is it lost rent, lost revenue or a similar loss? | Hard to fit within extra cost of carrying out work. Ask how it qualifies |
| Was the Condition's wording actually failed? | The Condition is what gets tested, not whether the work looked finished |
A fictional example
A substation fit-out, with illustrative figures. The Key Date says the switch room will be dry and lockable by 3 March, so the Client's cabling contractor can start. The Contractor meets the Condition on 24 March.
| Item put forward by the Project Manager | Amount | Likely outcome |
|---|---|---|
| Cabling contractor's standing time, paid by the Client | £21,000 | Stays, if its own contract required it to be paid |
| Re-booking a shutdown | £4,500 | Stays, if the shutdown really moved because of the Key Date |
| Client's lost income from a later energisation | £60,000 | Query: it isn't obviously work cost or a sum paid to Others |
| Cabling contractor's standing time for 17 to 28 March, when it was on another site | £9,000 | Should come out on the facts |
Key Date or delay damages?
People blur the two, so keep them apart. Option X7 sets a rate for late Completion. It doesn't apply to Key Dates. Clause 25.3 is the Client's only right for this failure, under its own wording. A late Key Date doesn't by itself mean late Completion, and you can face both only if both dates are separately missed.
What the other side will say, and how it reaches you
Expect "the amount is whatever the Project Manager assesses". The assessment is the Project Manager's to make, but it can still be disputed. A Project Manager with a poor record may also say the Contractor "knew it was coming" because no warning was given, and that point has force: under 61.5 a missing warning can reduce a related event too.
The money usually comes through the amount due as a sum to be paid by the Contractor, under clause 50. If you disagree with it, say so in writing as soon as it is certified and look at the dispute time limits for your form, since under Option W1 a four-week period starts once you are aware. Take advice if the figure is large.
Related guides
- NEC Questions Answered: Real Situations on Site
- The PM Says We Have Not Reached Completion: Who Decides?
- The Client Moved In Before Completion: What Happens?
- Can the PM Refuse Completion Because of Snagging?
- The Contractor Has Not Submitted a First Programme
- The Client's Change Used Up Our Float: Can We Claim?
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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.