Core clause

In language, a clause is a group of words that includes a subject, predicate and a verb. A clause can either form a complete sentence or form part of a sentence. A sentence can contain one or more clauses.

In construction, clauses are seen in many forms of documentation. They are usually in the form of a section, phrase, segment or paragraph that deals with a specific issue. Clauses may be numbered for easy reference. A clause in a contract typically addresses a particular aspect of the agreement between the parties to the contract. Standard contractual clauses are available that have been prepared to ensure consistency of meaning and interpretation, to reduce the amount of time required to draft a contract, and to build on prior experience such as case law.

Core clauses are referred to in the New Engineering Contract (NEC) suite of documents. These are standard forms of construction contracts published by the Institution of Civil Engineers (ICE) and form the basis for many major construction projects in the UK and overseas.

Known for their clarity, simplicity and use of plain English, NEC contracts have numerous core clauses. These clauses are the same in every form and cover the basic reference conditions that apply to every contract.

NEC 4, introduced in July 2017, contains the following core clauses:

• Core clause 1: General, incorporates defined terms (e.g ‘subcontractor’), interpretations, communications and ambiguities;
• Core clause 2: Sets out the contractor’s main responsibilities;
• Core clause 3: Covers time, starting/completion dates, key dates, programme, access, etc;
• Core clause 4: Quality management (QM), contractor’s obligation to produce a QM system, quality plan, etc;
• Core clause 5: Payment of amounts due, payment provisions etc;
• Core clause 6: Compensation events – which may involve time/money components;
• Core clause 7: Title – entitlement to use plant and materials e.g contractor using client materials;
• Core clause 8: Liabilities and insurance, employer and contractor liabilities, insurance requirements, and
• Core clause 9: Terminations – grounds for terminations – procedures and payments.

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