For those not familiar with the NEC, it is a body which publishes a range of standard form construction and engineering contracts. Back in April 2022, the NEC published for consultation a new secondary option X29 to encourage sustainable construction practices on projects.
This option includes Climate Change Requirements for the contractor to achieve and which should be included in the scope. The contractor should then prepare a climate change execution plan, explaining how it will go about achieving the Climate Change Requirements. The project manager may then approve the plan or ask the contractor to resubmit a version if the plan does not comply with the Climate Change Requirements or would not allow the Contract to provide the works. Note that a failure to comply with the Climate Change Requirements is a breach of the contractor’s obligation to provide the works in accordance with the scope. Note also that if the failure relates to the works then it is a defect that the contractor must correct, but if it relates to how the contractor is to provide the works then this is not a defect, but it must still be dealt with.
Either party must give the other an “early warning” if they become aware of any matter which could affect the achievement of the Climate Change Requirements. Any alteration to the climate change execution plan may entitle the contractor to additional time and money (a “compensation event”).
Option X29 is not compulsory but hopefully its use will be widespread given the push to make the industry more sustainable. It can also be adapted to apply to other standard form or bespoke contracts which is something our team would be very happy to assist with. Whether other standard forms will publish their own climate change clauses remains to be seen.
This is only intended to be a summary and not specific legal advice. If you would like further information or advice, please do contact a member of our team.
