Week 5 — JCT vs NEC: The Clause That Can Blow Up Your Job Midway
👷 Brief Introduction
If you’ve ever had a job go sideways halfway through — not because of poor workmanship, not because of delays, but because of a contract clause that someone decided to weaponise — you’re not alone.
Both JCT and NEC contracts have their traps. On the surface, they’re standard forms. But hiding in plain sight are clauses that can derail your project, drain your margin, and tie you up in disputes — all while you’re still trying to finish the job.
This week, I’m breaking down:
✅ The single clause in each form that causes the most grief
✅ Real examples of how these clauses have wrecked otherwise well-run projects
✅ What you can do when negotiating or managing these risks
If you’ve ever signed on the dotted line thinking “it’s a standard form, how bad can it be?” — this one’s for you.
📚 The Problem with Standard Forms
Let’s start with a truth most people don’t want to say out loud:
👉 There’s no such thing as a “safe” standard form.
JCT and NEC contracts are both widely used because they provide structure, processes, and a shared language for projects. But that doesn’t mean they’re designed to protect you.
Both forms contain clauses that:
Give disproportionate power to the client or their agents
Shift risk down the chain
Create endless admin traps
Allow one side to apply pressure at a critical stage of the job
Let’s look at the biggest culprits.
⚠️ The JCT Clause That Blows Up Jobs: Termination for Convenience / Employer Suspension
🔹 Where You’ll Find It:
JCT Standard Building Contract 2016
JCT Design & Build 2016
Clause 8.9 (Employer Suspension)
Clause 8.11 (Termination by Employer at Will / For Convenience)
🔹 What It Says:
👉 Clause 8.9 lets the employer suspend the works at any time, without reason, for as long as they want.
👉 Clause 8.11 lets the employer terminate the contract at will — again, without needing to show any breach or default by the contractor.
🔹 Why It’s So Dangerous:
On paper, these clauses look harmless — after all, they come with payment provisions for the work done. But in the real world:
⚠️ The employer can pull the plug part-way through a job, leaving you with sunk costs, unallocated overheads, and no recovery for lost profit on the remaining work.
⚠️ You might have subcontractor liabilities or material orders you can’t cancel — but you won’t be compensated for those losses unless the contract specifically allows for it (and most don’t).
⚠️ It gives the employer huge commercial leverage. Mid-job, they can suspend works, slow down payments, or terminate and re-tender — often to get a better price or buy time on their side.
🔹 Real Example:
👉 Office Refurbishment, Birmingham
A main contractor was delivering a £1.2m CAT B fit-out under JCT Design & Build. The employer’s funder got cold feet mid-project due to a change in market conditions.
The employer used their termination-for-convenience right under clause 8.11.
👉 The contractor recovered their costs up to termination, but:
Lost all margin on the remaining work
Had to settle with subcontractors who had already procured materials for future phases
Took a hit on prelim costs spread over the project duration
👉 Net result: The contractor lost money overall — despite doing nothing wrong.
🔹 What You Can Do About It:
✅ 1️⃣ Negotiate out the termination-for-convenience clause if possible.
👉 It’s rare — but not impossible — for reasonable employers to agree.
✅ 2️⃣ If they insist, add wording that allows recovery of:
Loss of profit on the balance of the works
Losses arising from subcontracts and material orders
Reasonable demobilisation costs
✅ 3️⃣ If you can’t amend it, at least price the risk.
👉 Consider how termination might affect your prelim recovery and cashflow — and make sure your programme and payment schedule front-load where possible.
✅ 4️⃣ For employer suspension rights — agree time limits.
👉 No suspension should be indefinite. Insert a maximum suspension period (e.g. 6 weeks) after which you can terminate and recover losses.
⚠️ The NEC Clause That Blows Up Jobs: Compensation Events and Early Warnings — Time Bar Clauses
🔹 Where You’ll Find It:
NEC4 Engineering and Construction Contract
Clause 61.3 (Notification of Compensation Events)
Clause 63.1 (Assessing Compensation Events)
🔹 What It Says:
👉 The contractor must notify the project manager of compensation events within 8 weeks of becoming aware of them.
👉 If you fail to do so, you lose the right to additional time or money for that event — unless it’s one the project manager should have notified.
🔹 Why It’s So Dangerous:
⚠️ NEC works on a strict time-bar system. If you don’t notify a compensation event on time, you can lose your entitlement — even if your case is valid.
⚠️ Clients and project managers can use this as a technicality to reject claims — especially where relationships are strained.
⚠️ Admin-heavy jobs mean it’s easy to miss a deadline — especially if you’re firefighting on site.
⚠️ Early warning notices are separate from compensation event notices — and people often confuse the two, leading to further risk.
🔹 Real Example:
👉 Civil works package, London
A contractor working under NEC3 suffered programme delay due to a late client design change. They raised early warnings, but didn’t follow up with a formal compensation event notice within 8 weeks.
When they tried to recover time and cost months later, the client rejected the claim on the basis of clause 61.3 — out of time.
👉 Adjudication found the contractor had missed the deadline. The claim failed, despite clear client fault.
🔹 What You Can Do About It:
✅ 1️⃣ Get your team crystal clear on what triggers a compensation event notice — and how it differs from an early warning.
✅ 2️⃣ Build a tracker.
👉 Every potential compensation event should go on a live tracker, reviewed at least weekly.
✅ 3️⃣ Negotiate time bar amendments if you can.
👉 For example: no time bar, or a longer period (12 weeks) for notification.
✅ 4️⃣ Use templated notices.
👉 Speed is everything. Make it easy for your team to issue notices with clear, standard wording.
✅ 5️⃣ Record instructions carefully.
👉 Many compensation events arise from client or project manager instructions — confirm all verbal instructions in writing immediately.
⚙️ How to Manage the Risk — General Principles
✅ Understand the key clauses — before you sign.
👉 Too many firms sign standard forms without a detailed clause-by-clause review.
✅ Don’t rely on relationships to save you.
👉 Your client contact today might not be there when things go wrong. The contract is what you’ll be judged on.
✅ Train your site teams.
👉 Most contract traps are sprung because people on the ground don’t know the rules they’re working under.
✅ Price the risk properly.
👉 If you can’t remove or amend a dangerous clause, make sure you allow for it in your prelims and rates.
✅ Keep your paperwork tight.
👉 The best defence against contract traps is robust records — issued quickly and stored properly.
🔨 Tip of the Week
👉 On your next tender, highlight the most dangerous clause in your client’s draft contract before you price.
Build your commercial strategy around that risk — not just the drawings.
⚠️ Quick FAQ / Myth-Buster
❓ “If I’ve flagged an issue verbally or in a meeting, I don’t need to issue a formal notice — right?”
✅ Wrong.
👉 Under both JCT and NEC, formal notices in writing are what count. Verbal discussions, meeting minutes, or casual emails won’t protect your entitlement.
📣 Call-to-Action
👉 Had a job derailed by a JCT or NEC clause?
👉 What would you change if you could go back?
Hit reply and tell me — I’m building a future feature: “Contract Traps That Caught Us — and How to Avoid Them Next Time.”
👉 Names and details will be kept anonymous.
Next Week:
🛑 Retention Abuse — Why You’re Still Chasing Your Money in 2025
We’ll break down why retention is still the construction industry’s dirty secret, who the worst offenders are, and how to defend your cash.
Until then — read your contract, protect your position, and remember: what you sign is what you’ll live by.
— The Hard Hat Brief
📚 Need More Help With Construction Contracts?
If you find The Hard Hat Brief useful, you might want to go deeper on the contract issues we face in UK construction every day.
👉 I’ve written a range of practical, plain-English guides on construction contracts — designed for contractors, subcontractors, quantity surveyors, and commercial managers who want to protect their business and avoid the common traps.
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✅ FIDIC, JCT, NEC, CCDC contract essentials
✅ How to handle variations, delays, and payment disputes
✅ Risk management strategies that actually work on live jobs
They’re available on Amazon now — affordable, direct, and no-nonsense.
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