Frequently Asked Questions

We are a client using the NEC4 Professional Service Short Contract (PSSC) and are not sure of clause 92.3. We wish to terminate, for reason 8, but are not clear what the consultant is entitled to. Is this a loss-of-profit type clause?

The ability for one party (but not the other) to terminate at will, as in reason 8, comes with a quid pro quo. The consultant has done nothing wrong and is entitled to a percentage of the amount they would have earned if they were allowed to finish the services they were contracted to carry out.

The calculation is set out in clause 92.3. It requires an estimate to be made of the amount due at completion had there been no termination, which would take into account the quantities, rates and prices in the price list as well as any changes that were known about before termination. From that figure is deducted the amount due at termination, as calculated in accordance with clause 92.1, and the consultant is paid 5% of the difference.

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