How does NEC4 clause 61.4 work?
The Project Manager may refuse a notified event on four grounds only, and if it does not reply, and stays silent after the Contractor notifies the failure, the event is treated as accepted and a quotation as instructed.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 61.4 is the Project Manager's decision on an event the Contractor has notified under clause 61.3, and it works in two halves. The first half is the decision. The Project Manager may decide that the Prices, the Completion Date and the Key Dates are not to be changed on four grounds only: the event arises from a fault of the Contractor, it has not happened and is not expected to happen, it has no effect on Defined Cost, Completion or meeting a Key Date, or it is not one of the compensation events stated in the contract. If none of those applies, the Project Manager notifies the Contractor that the event is a compensation event and instructs it to submit a quotation. The reply is due within the period the clause gives. The second half is the consequence of silence. If the Project Manager does not reply within that period, the Contractor may notify the Project Manager of the failure. If the Project Manager still does not reply within the further period the clause gives, the Contractor's notification is treated as acceptance that the event is a compensation event and as an instruction to submit a quotation. What goes wrong is predictable. A reply that says the notification is noted or under review is not a decision, and neither is a refusal on a ground outside the four, such as the budget having no allowance for it. Contractors often fail to send the second notification, so the deemed acceptance is never triggered and the event drifts. And both sides confuse what the deemed acceptance settles: it settles that the event is a compensation event and that a quotation is to be submitted, nothing more. The amount is still assessed under clauses 62 and 63, and the Project Manager can still make its own assessment under clause 64 if the quotation is wrong.
Example
The situation
The Contractor notifies that free-issue steelwork the Client was to provide arrived after the date shown on the Accepted Programme, and says it believes compensation event 60.1(3) applies. The Project Manager has the period the clause gives to reply.
What happens
- A reply that the steel was late only because the Contractor changed its own sequence is a decision on the fault ground, and the Contractor tests it against the Accepted Programme and the delivery records.
- Silence from the Project Manager leads the Contractor to notify the failure to reply.
- Silence continuing for the further period the clause gives means the notification is treated as accepted, and the Contractor submits a quotation as if instructed.
The outcome
The deemed acceptance settles the event, not the money: a forecast of £12,000 in that quotation still has to be assessed.
Our NEC compensation event review reads the Project Manager's reply against the four grounds before the Contractor answers it.
