When using the NEC contract is an information release schedule binding?

Published on 6th Jul 2015

Many construction contracts, such as the NEC, set out in detail the required content of agreed programmes. Contract documents may also set out other details as to what information is required, and when, to enable the works to be completed.

A recent Scottish case underlines that great care is needed if the parties intend give contractual status to an information release schedule (“IRS”) and to any obligation to submit information in a timely fashion. 

The NEC forms require programmes to be submitted periodically (typically monthly) and are prescriptive about the format of those programmes. Clause 31.2 states a programme for acceptance should show “information from Others” and “other information which the Works Information requires the Contractor to show on a programme submitted for acceptance.”

The programme should, properly prepared, identify when critical information is required from the Employer. If the Employer: “does not provide something which he is to provide by the date for providing it shown on the Accepted Programme” then, by clause 60.1 (3), that would be a compensation event potentially entitling the Contractor to time and money.

Neither clause 31.2 nor 60.1 (3) expressly refer to an IRS. 

In Martifier UK Limited v Lend Lease Construction (EMEA) Limited the court held that although an IRS and outline programme formed part of the Sub-Contract Documents, they did not have contractual status. This was even though the contract contained a clause which provided that:

“The Sub-Contract Works shall be completed in accordance with and the rights and duties of the Contractor and the Sub-Contractor shall be regulated by: … The Sub-Contract Documents”.

In Martifier the IRS showed the earliest dates that Lend Lease, the Main Contractor, could expect to receive detailed information from the professional team. The outline programme provided the parties with information about the key sequencing of works. These documents were clearly intended to guide the parties through the construction process.

The court made reference to the following passage from “Chitty on Contracts”:

“Depending upon a true construction of the contract as whole, certain documents may be intended not to bind the parties to their literal terms, but to have more limited effect. Thus, a programme setting out the contractor’s intended sequence of work, even though the contract may require its provision, will generally not constitute a contract document. Were it to bind the parties literally, the inevitable failure of one or both parties to comply in every respect would render one or both parties in breach. Where programmes are to be referred to in the contract documents, the obligation will generally be to produce and review a sequence of working, but not to comply with each detail. There will be other documents which are supplied to the contractor by the employer (or a member of the professional team) which form part of the background information available to the contractor…”

The court held that a reasonable person with the background knowledge available to the parties at the time of entering into the sub‑contract would not conclude that the parties intended the timing in the IRS and the outline programme to be contractually binding, but that they simply affirmed the level by level, sector by sector approach that was to be adopted on the project.

This decision confirms that whilst a document such as an IRS may form part of the Sub-Contract Documents, that alone does not necessarily place a specific obligation on the parties to comply with every word, date or other detail. 

Users of contracts such as the NEC will need to ensure that the status of documents, such as an IRS, is properly considered and documented in the contract. Are they intended to be to guide to the parties, or contractually binding? Clear drafting about which documents are to be contractually binding is necessary.

In the NEC context, if the Contractor requires information in an IRS to be provided by a given date, and intends that date to be of contractual affect, this needs to either:

  • Be agreed in advance, for example, by expressly including the IRS in the Works Information and / or;
  • Ensuring the IRS information is referred to in the Accepted Programme. 

If this occurs the IRS will become a binding obligation and a failure to provide information by the stated date will give rise to a compensation event.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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