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This Practice Note examines and provides commentary on the list of Compensation events contained in clause 60 of the NEC3 and NEC4 engineering and construction contracts (NEC3 ECC and NEC4 ECC). It looks at how the different compensation events may be used in practice, provides references to case law on the topics and suggests ways in which the compensation event clauses may be amended by the parties. This Practice Note supplements Practice Note: NEC contracts—compensation event regime which sets out the process for claiming compensation events under the NEC3 ECC and NEC4 ECC.

Note that the NEC3 suite refers to the ‘Employer’ but, in the NEC4 suite, the employer is re-named the ‘Client’. For ease of reference, this Practice Note uses ‘Client’ in relation to both contracts. For a glossary of NEC terms, see Practice Note: NEC contracts—glossary.