Using NEC contracts to manage risk and avoid disputes

NEC contracts provide an excellent basis to encourage and support risk management through all stages of any project or service provision. Partly because they are good for risk management, NEC contracts have anecdotally helped avoid disputes. After more than 12 years of use for possibly billions of pounds worth of work in probably tens of thousands of projects in more than 20 countries there remains only one piece of case law relating to the use of the NEC. The aim of this paper is to explain how NEC contracts can be used to reflect the particular risk allocation intended by the parties to the contract through the use of the options within the contract. It then explains the key tools and processes in the contract for the ongoing management of risk, including the NEC’s ‘Risk Register’ and the allocation of risk in quotations for the effects of events at the client’s risk.