What does NEC4 clause 60.1(12) mean?
The Contractor encountering physical conditions within the Site, which are not weather, and which an experienced contractor would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable to allow for them, is a compensation event.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 60.1(12) is the unforeseen ground conditions event, though it is not confined to ground. The event is that the Contractor encounters physical conditions which are within the Site, are not weather conditions, and which an experienced contractor would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable to allow for them. Every element has to be shown. The conditions were physical, such as ground, obstructions, contamination or the state of an existing structure; they were within the Site as the Contract Data defines it; they were not weather, which has its own event at clause 60.1(13); and they pass the experienced contractor test, which asks not whether this Contractor foresaw them but whether an experienced contractor, looking at the Site Information, the Site and its surroundings and what a visual inspection would show at the Contract Date, would have judged them so unlikely that allowing for them was unreasonable. The Project Manager decides under clause 61.4 whether the event qualifies. The Contractor notifies the event under clause 61.3 within eight weeks of becoming aware of the conditions, and should give an early warning under clause 15.1 as soon as they are suspected, because if the Project Manager decides an experienced contractor could have given an early warning and the Contractor did not, clause 61.5 and clause 63 require the event to be assessed as if it had. The change to the Prices is assessed under clause 63.1 as the effect of the conditions on actual Defined Cost by the date of the notification and forecast Defined Cost afterwards, plus the Fee. What most often goes wrong is that the Contractor notifies the cost rather than the condition, weeks after the excavator found it, or cannot show what allowance it made at tender. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.
Example
The situation
A basement contractor excavating for a lift pit finds an unrecorded brick culvert running across the pit at a level that the Site Information's borehole logs, the desk study and the utility searches did not show.
What happens
- The contractor stops, gives an early warning the same day, and notifies a compensation event under clause 61.3 within the week.
- The culvert is photographed and surveyed before it is broken out.
- The Project Manager accepts that an experienced contractor would not have allowed for it.
- The quotation assesses under clause 63.1 the breaking out of 35 cubic metres of brickwork and the water diversion at £17,300, plus £2,800 for the rig and crew standing while the diversion was designed.
- The Fee is added at the fee percentage in the Contract Data, with a stated risk allowance for the length of culvert still concealed beyond the pit.
The change in Defined Cost
| Item | Amount |
|---|---|
| Breaking out, removal and water diversion | £17,300 |
| Rig and crew standing | £2,800 |
| Change in Defined Cost | £20,100 |
The outcome
The change in Defined Cost is £20,100, with the Fee added and the concealed length of culvert carried as a stated risk allowance.
