ABSTRACT
The intention of the clause is to compel the Contractor to notify compensation events promptly, otherwise any entitlement to additional time and money is lost. The clause therefore covers compensation events initiated by the Contractor, rather than the Project Manager, examples being the weather, unforeseen ground conditions, which the Project Manager be aware of unless the Contractor had notified it. The NEC3 contracts start with the Total of the Prices at the Contract Date and these prices are amended by compensation events which are assessed within the timescales of the contract. Quotations for compensation events are based on their effect on Defined Cost and time. This is different from most standard forms of contract where variations are valued using the rates and prices in the contract as a basis. Most Employers tends to issue a form of Final Certificate or Final Statement for signature by the Employer and the Contractor confirming that nothing remains outstanding under the contract.
