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Section 5— Payment

Clause 52.2

Defined Cost — Disallowed Cost

Purpose

Disallowed Cost includes costs that are not justified by the Contractor's records or are not incurred in Providing the Works. The PM assesses the amount of Disallowed Cost.

Practical Application

Under options C, D, and E, the PM may disallow costs that are unreasonable or inadequately recorded. The Contractor is notified of any disallowed amounts.

Common Pitfalls

Poor record-keeping is the primary cause of disallowed costs. The Contractor must maintain contemporaneous, auditable records of all resources used.

Related Clauses

Clause 53.1Clause 52.3

📖 This summary is for reference. For the full, authoritative NEC4 contract text — including all amendments, guidance notes, and flow charts — visit the official NEC website.

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⚠️ This commentary is for reference only. Always refer to the full NEC4 contract text and seek professional legal or contractual advice for your specific project.