Z Clauses: Writing Additional Conditions

NEC Z clauses are the additional conditions a contract adds to the standard text, listed in the Contract Data and given effect by a very short Option. Write them only when the standard contract truly doesn't do what the project needs, because each one is a chance to upset a form whose clauses are designed to work together.

The Option is Z1 in the NEC3 ECC and in the NEC4 subcontract text, with a single clause, Z1.1, saying that whatever the Contract Data lists under this heading forms part of the contract. Everything else depends on how well they're written. For the wider picture, see the NEC secondary Options overview.

Do you need one?

Work through this before drafting.

Seven drafting rules

1. State the purpose first, in your notes. If you can't say which risk the clause addresses, leave it out.
2. Use the contract's voice. NEC is written in the present tense, without "shall". Mixing styles makes people wonder whether a different meaning was intended.
3. Use defined terms exactly. Capitalise them as the contract does. Don't write "Employer" in an NEC4 Z clause, or "Engineer" anywhere.
4. Say who does what, and when. Name the role and give a period. "The Contractor provides a report within two weeks" works; "a report is to be provided promptly" doesn't.
5. Say what happens if it's not done. Is it a Disallowed Cost, a reason for non-acceptance, a compensation event or a breach? If you don't say, the parties may end up in dispute.
6. Link it properly. Amend by clause number, and cross-check any clause that refers to the one you're changing. Number Z clauses simply and in order.
7. Test it on a scenario. Walk a realistic event through the contract as amended. Does the process still work?

An example of the difference

These are our own illustrative clauses, not from any contract. Suppose a Client wants the Contractor to give a monthly forecast of carbon from concrete.

Poor: "The Contractor shall use all reasonable endeavours to keep the Client fully informed regarding carbon matters at all times."

Better: "Z3.1 The Contractor submits a forecast of embodied carbon for the concrete in the works to the Project Manager at each assessment date. Z3.2 A reason for the Project Manager not accepting a forecast is that it does not follow the method stated in the Scope."

The second version gives the role, the date, the document, a test and a place for it in the normal process. The first has three undefined phrases, and no one could tell whether it's been complied with. On this subject, also check whether NEC4's Option X29 on climate change already does the job, because NEC4 added several Options that older Z schedules were written to fill.

Reviewing a Z clause at tender

If you're the Contractor or a Subcontractor, read each Z clause and ask:

• Does it remove a compensation event or move a risk to me? If so, price it or raise it.
• Does it shorten a period I'll struggle to meet, or add a time bar?
• Does it change how Defined Cost is assessed?
• Does it conflict with the Scope or another Z clause?
• Does my insurance cover what it adds?
• Can I pass it to my subcontractors?

Keep a one-page register showing each Z clause, what it changes and who it affects, and make sure the site team has a copy. Many clauses are only remembered when something goes wrong.

To see how this goes wrong in practice, read our examples of common Z clause mistakes.

Related guides

• NEC Secondary Options: X, Y, W and Z Clauses Explained
• Common Z Clause Mistakes
• Choosing Secondary Options
• W2: Dispute Resolution Under the Construction Act
• W3: Dispute Avoidance Board

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.