Like life in Green Day’s popular track, many a construction project will come across “a turning point, a fork stuck in the road” where “time grabs you by the wrist, directs you where to go”. Delays are sometimes inevitable and crop up in unforeseen ways (or ways which perhaps should have been foreseen – like rock of Gibraltar – see Anna Wood’s piece on this case in July 2014, “FIDIC rocks my world”.
In this case, the parties used the FIDIC Yellow Book form of contract. The contract included clauses to the effect that the Contractor must give notice if he considers himself entitled to any extension of time for completion, describing the event or circumstance giving rise to the claim. This notice, which was a condition precedent (i.e. a pre-requisite) to an extension of time, had to be given “as soon as practicable” and “not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance”.
A further clause stated that the Contractor would be entitled, subject to provision of the notice, to an extension of time if and to the extent that completion “is or will be delayed”.
The delays in this case were caused by poor weather, rock and hydrocarbon and lead contamination on site. The Contractor served notice but arguments arose over the timing of the Contractor’s notice (among other things).
Perhaps somewhat surprisingly, the TCC decided that where it was known that an event might have an impact on completion in the future, but that impact was not immediate and not yet measureable, notice was not required at that time. This interpretation will give some contractors greater flexibility as to the timing of delay notices avoids the situation where contractors must give numerous “protective” notices in case an event becomes a delay event. The TCC indicated that notice could be given either at the time when it became clear that there would be a delay in future OR when the delay itself had started.
It is likely that some other forms of contract (such as some of the JCT suite) could be interpreted similarly however not all will be and as always, it is key to check the wording of your contract terms and comply with any notice requirements.
Many employers may already be taking this decision into account and amending standard forms of contract to ensure that there is a clear date by which notices must be served and that they must be served at the earliest possible date. A note of caution to contractors therefore – don’t let this be “a lesson learned in time”! Check the wording of your contract terms and ensure that you give notice of delays as early as possible to avoid their invalidity.
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These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.