What does NEC4 clause 60.1(18) mean?
A breach of contract by the Client which is not one of the other compensation events is a compensation event.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 60.1(18) is the sweeping up event for the Client's defaults. The event is a breach of contract by the Client which is not one of the other compensation events. Its purpose is to keep the Client's breaches inside the contract's machinery: the breach is notified, quoted and assessed like any other event, with the eight week bar, the Project Manager's decision and the Defined Cost basis all applying. To rely on the paragraph the Contractor has to show three things. There is an obligation on the Client in the contract, meaning the conditions, the Contract Data or the Scope, and not a general expectation of cooperation; the Client, as opposed to the Project Manager, the Supervisor or Others, has failed to perform it; and the failure is not already one of the other compensation events, because if it is, that paragraph applies and this one does not. This paragraph is reached only for what the others leave, such as a failure to give a consent the Client alone can give or to maintain an insurance the contract requires the Client to take out. The Contractor notifies the event under clause 61.3 within eight weeks of becoming aware that the breach has happened. The change to the Prices is assessed under clause 63.1 as the effect of the breach on actual Defined Cost by the date of the notification and forecast Defined Cost afterwards, plus the Fee; it is a cost based assessment, not a damages assessment, so loss of profit on other work and similar heads do not come in. What most often goes wrong is that the Contractor describes something the Project Manager did as a Client breach, when the Project Manager's failures have their own paragraphs, or notifies the breach in general terms without identifying the obligation the Client has broken. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.
Example
The situation
A structural steel contractor works under a contract in which the Client is required to maintain the insurance of the works and to provide a certificate of it on request. The Client's policy lapses, is not renewed for a period, and the Client cannot produce a certificate.
What happens
- Rather than work uninsured, the contractor, with the Project Manager's knowledge, buys short term cover for the same risks and period.
- The failure to maintain the insurance is a breach of the Client's obligation and is not one of the other compensation events, so the contractor notifies a compensation event under clause 61.3.
- The Client's admission and the broker's confirmation are attached to the notification.
- The quotation assesses under clause 63.1 the premium paid at £3,940 as the effect on Defined Cost, with the Fee added at the fee percentage in the Contract Data.
The outcome
The contractor claims the £3,940 premium plus Fee and nothing for the general inconvenience of the lapse, because that is not a cost.
