5
International use
Domestic and cross-border
Domestic
Domestic international use means that NEC4 is used by a Client based in a country other than the UK for a project in that country, using consultants/subconsultants and contractors/subcontractors who are also based in that country. In that instance, NEC4 would effectively replace any other standard form contract which might be prevalent in that particular country. While this might seem a perverse thing to do in a country which has an established range of standard form contracts, it would still potentially offer an alternative approach with the ability to marry up legal and project management requirements. In countries that have historically had little or even no choice of standard form contracts, NEC4 offers a blueprint which could form the basis of a national standard form of contract for that emerging construction economy.
Cross-border
Cross-border international use means that NEC4 is used as a neutral contract between parties who have different nationalities and where the Project may be based either in the same country as one of the parties or possibly in a third country. This type of cross-border use is quite likely on larger projects, for example:
- technically demanding projects where word-class expertise can be drawn from an appropriate country
- projects in developing countries where some of the funding may be in the form of international aid.
These concepts of NEC4 international use have already been explored by international parties from countries as diverse as China, South Africa, Germany, Ethiopia, Ireland and New Zealand. The list of interested countries has grown slowly but steadily and it is to be anticipated that the international use of NEC4 will continue to spread around the world.
Jurisdiction
NEC4 is operable in any jurisdiction by virtue of the relatively simple device of removing jurisdiction-specific requirements from the core clauses. The choice of jurisdiction is made by entering the appropriate country into the Contract Data (Part One) under the General section:
The law of the contract is the law of XXX
Where XXX would normally be ‘England and Wales’ for projects in, for example, London.
While it would be unusual, it is also theoretically possibly to decide upon a different jurisdiction from that of the country in which the Project is situated. For instance, if a German bank wished to construct a new office building in London, possibly using some consultants and contractors from Germany, it would be a simple matter of filling in XXX to be ‘Germany’ in the Contract Data for the jurisdiction of the Project to be German law.
Architects should note that there is no default jurisdiction under the Contract; it follows that it would be a somewhat fatal mistake to fail to fill in the appropriate country in Contract Data Part One in order to designate the law of the Contract.
Architects working in multi-jurisdictional countries such as the UK or the United States should take care in completing this statement in Contract Data Part One. For example, if a Newcastle-based practice were to win a commission in Edinburgh, it would be very important not to just copy the Contract Data entry from a previous project, but rather to have a proper debate with the Client and any other interested parties as to whether the applicable law should be the law of England and Wales, or the law of Scotland?
This capability to choose jurisdiction is somewhat analogous to the situation in international dispute resolution.152
Having established the law of the Contract, there is a further key area where architects need to be proactive in ensuring that the national legislative requirements for a project are properly covered. As a direct result of removing jurisdiction-specific requirements from the core clauses, there is no default set of contractual obligations in relation to national legislation, for example, CDM153 compliance requirements on an English project. This may seem slightly irritating to architects who only ever work on projects under a single jurisdiction, as they could be forgiven for considering it to be an unnecessary additional burden to have to ensure that such legislation is actively referred to.
Quite apart from a real risk of oversight, there is also the risk of not knowing where to add this legislative information to make it as enforceable as if it had been within the generic contract conditions, as it would be with many standard form building contracts. Even for those architects who are not persuaded by this structure for the greater good of ease of international use, there is still a viable alternative to simply choosing an alternative fully nationalised standard form contract. The key is to be found in the all-powerful Scope: this is the correct place to reinstate the requirement to comply with national legislation. Using the example of CDM compliance requirements on an English project, the statement in the Scope could be as general as, ‘The Construction (Design and Management) Regulations 2015 must be complied with’. Equally, there could be detailed stipulations regarding their specific applicability to the project in question and there could be further contractual requirements outside the strict remit of the legislation, for example, there might be a statement that ‘all O&M154 manuals must be provided both in electronic PDF format and as a hard copy on min. 100 g paper for the purposes of longevity’.
This is clearly an area which requires careful consideration of appropriate national legislation and there is no getting away from the potential gravity of failing to include certain requirements on individual projects. Some architects may immediately wish to revert to the tried and tested approach of older style standard form building contracts in relation to national legislation. However, there is undoubtedly a counterargument to that stance: as the trend within English law appears to be moving towards greater influence of legislation over parties’ freedom of contract, it behoves architects to get to grips with such legislation affecting construction and to become familiar enough with it to easily incorporate it appropriately into the Scope for a given project.
Language
Simple English is used throughout NEC4, avoiding the legalistic language usually associated with construction contracts. Subjective statements are avoided and, instead, objective, measurable requirements are stated wherever possible. This approach makes for easier understanding nationally and internationally and has generally been welcomed. Some lawyers commented in the early days of the NEC that the use of the present tense throughout resulted in a lack of distinction between statements of fact and statements of legal obligation; in practice, however, this does not appear to have materialised as a tangible difficulty.
Most first-time users of NEC4 will be struck by the simplicity of the language and will tend to react either positively or negatively – ambivalence is a less likely reaction. Certainly, it would be a mistake to confuse simplicity of language with simplicity of purpose or intent, and experienced users of NEC4 have learned that even the shortest sentences are not without effect.
In the context of international use, there is a strong argument for translating the NEC4 documents into other languages. Nonetheless, in the absence of official translations, the simple English used throughout the documents does assist understanding among those whose mother tongue is not English.
Culture
Cultural diversity is a fascinating aspect of the international use of NEC4, in that its influence can only be established on a trial and error basis. It would never have been possible to assimilate every culture into the drafting of NEC4, as even concentrating on those cultures with a history of using standard form contracts for construction would have required an impossibly large drafting and research body. Instead, NEC4 offers a model that is potentially inclusive of all cultures by means of the following salient devices.
- Necessary disconnection of language from culture
- Necessary disconnection of jurisdiction from culture
- Pick-and-mix contractual structure which can be tailored towards cultural precedents and customs.155
The relative success of NEC4 in operating within different and new cultures can only be assessed over decades rather than mere years. Countries outside the UK in which NEC has been used to a significant extent to date include South Africa and New Zealand. While these countries perhaps do not represent the most radically different cultures in the world relative to England, they are useful examples of successful use of NEC in diverse cultures.
The worldwide history of the evolution of standard form contracts suitable for construction projects cannot be divorced from historical and political events, and it is certainly interesting to note how older standard form contracts were initially introduced into other cultures on what could almost have been described as a neo-colonial basis.156 NEC4 goes a very long way in avoiding the imposition of predetermined and possibly inappropriate cultural provisions, particularly those associated with common-law principles. Nevertheless, given that the NEC contract was born and bred in England, it has to be acknowledged that some English cultural prejudices are bound to remain even after the review leading up to the publication of the fourth edition, NEC4, in 2017. However, to put this into context, even within the confines of the construction industry in England, there are cultural nuances between professions such as architects and engineers, and NEC4 copes well in being flexible enough to be tailored to fit novel briefs.
Overall, NEC4 appears unlikely to present any insurmountable cultural challenges wherever it may be used in the world.
Notes
152 Conflict of Laws.
153 The Construction (Design and Management) Regulations 2015.
154 Operation and Management.
155 Including the potential for introducing unique secondary options.
156 E.g. Singapore Standard Form of Building Contract; FIDIC Conditions of Contract (Fédération Internationale des Ingénieurs Conseils).