Do contracts typically contain strict provisions governing notices of claims for additional time and money which act as conditions precedent to bringing claims? Does your jurisdiction recognise such notices as conditions precedent?
The principle of contractual freedom applies.
In public construction contracts, the Royal decree of 14 January 2013 on the general rules of performance of public procurement contracts provides strict deadlines for submitting claims to obtain a contract revision of the contract, compensation for losses incurred or time extensions.
Omani law would not preclude parties agreeing terms under which a contractor’s claim for a variation or an extension of time is conditional upon the satisfaction of certain notification requirements.
However, the wording of the Oman Standard Form Contract does not operate as a strict time bar, nor does it state that compliance with notification requirements is a pre-condition to having matters considered as grounds for a variation or extension of time. If a strict time bar is required, or the employer wishes to impose further notification requirements, amendment would be required.
There is nothing to suggest that the notification requirements in FIDIC contracts (1999 edition) would not be enforceable in Oman. However, the Omani courts have broad discretion (see question 18) to adjust parties’ obligations in this context.
The AB Standards include several provisions stating that a party must give notice to the other party. In most cases such provisions are construed as setting out rules as to the burden of proof.
However, there are some situations where a failure to give notice results in claims being forfeited: when the employer can claim damages for delay (liquidated damages), and when after receiving requests from the employer the contractor fails to submit a final account (in which case some types of claims are forfeited).
If the contractor submits a final account, but forgets to include a legitimate claim, such claim will usually also be forfeited.
Claims for defects must also be made within the agreed deadlines.
No, it does not recognize them.
Again this is permitted based on the principles of freedom of contract and if contractually agreed by the parties, such notices as conditions precedent is recognised in Indonesia.
We have seen that this notices of claims both for additional time and money being used in construction clause in Indonesia.
It is not common either in government contracts nor in private contracts in Mexico to have this kind of provisions such as clause 20 of FIDIC contracts or equivalent.
In public and private procurement –theoretically– the only way in which a claim for additional time or money could only be as a result of force majeure. The practice shows, however, that these additions are commonly mutually agreed.
Yes, provisions about notices of defects are usually strictly drafted but are not mandatory and may be changed by the parties. Swiss law recognizes these requirements as conditions precedent.
Yes. Time bars will be upheld, but may be challenged on grounds of waiver and estoppel if there is a factual basis to do so.
The contractual notice of claims procedures within NS 8405 and NS 8407 are strict. Notices of claims have to be made 'without undue delay' following the occurrence of the event. If the contractor fails to do so, the claim will may be rejected for untimely notice.
Similarly, if upon receipt of a notice of claim the employer wishes to fully or partly reject the claim, it has to give notice of such rejection 'without undue delay' following the receipt of the claim.
Yes, such provisions are common and are generally upheld in accordance with their terms.
The general limitation period under Swedish law is 10 years. There is also a general principle in Swedish law that a party who wants to make a claim or exercise a remedy must notify the other party within a reasonable time (which is usually months rather than weeks). The Swedish Supreme Court has dismissed claims in cases where a contract party has waited for several years to exercise a contract remedy. The parties are free to enter into agreements on time-bars and other limitations. The dominant standard forms (AB 04 and ABT 06) contain several provisions on time-bars for claims.
Yes, all forms of construction contracts in Hong Kong contain notice requirements. The wording of the contract dictates how the courts will interpret notice provisions, either as condition precedents or mere obligations.
The Hong Kong courts have not entertained the application/extension of the prevention principle that was accepted in the Australian Gaymark case, which would prevent the employer from claiming liquidated damages where the employer’s conduct caused delay, notwithstanding that the contractor had failed to give notice and thereby deprived itself of the chance to secure an extension of time for that delay.
English contracts differ on this point. Where time bar provisions are clearly expressed, the English courts will recognise them as conditions precedent to claims, even if the consequences are draconian.
For example, the NEC standard forms provide that notice of a claim for additional time and money must be made within 8 weeks of becoming aware of the event. The FIDIC provisions on notices are considered to be conditions precedent.
The JCT provisions on notices of extensions of time claims are not considered to be conditions precedent to bringing claims, but in any event, the contract administrator has a duty to reach a decision on the appropriate extension of time that is fair and reasonable.
Standard form construction contracts in the United States generally provide a framework for the Contractor to give notice to the relevant party administering the contract of a claim or change event that gives rise to possible additional entitlement for time and/or costs. Contractual notice provisions are critical to the claims process by triggering the contractor’s rights to pursue additional contractual entitlements based on known conditions. Thus, the act of providing notice imparts fairness into the contract, whereby the owner is placed on notice of changed circumstances or conditions that trigger relevant contract provisions, and permit the owner a timeframe in which to respond.
Contract notice provisions typically provide a defined time frame, which varies by contract. Generally, notice provisions range from 7 to 15 days. Contractors favor longer notice periods, while owners favor shorter periods. The defined time frames are frequently a source of pre-contract negotiation, as both the owner and contractor want to employ notice provisions that are advantageous to their position without limiting any rights. Thus, any notice provisions less than 7 days are usually modified during negotiation, as the shorter the time to act, the more unreasonable the provision. Strict enforcement of notice provisions can vary among states, with some states applying a strict construction and other states taking a more liberal stance where fairness considerations are present.
Contracts do not contain typically any strict provisions governing notices of claims for additional time and money which act as conditions precedent to bringing claims. The local jurisdiction does not recognise such notices as conditions precedent.
As most contracts are modelled on FIDIC, they generally require that timely notice be given in relation to any claim for an extension of time or additional cost. Notices are also required where the Contractor intends to claim any other type of relief in relation to particular events.
Many Employers impose shorter notice periods and then rely on the non-provision of notices to refuse a Contractor’s claim for relief. A contractor may seek to rely on provisions of the Civil Code to seek relief if the contractual provisions are preventing a claim.
This notwithstanding, Contractors are strongly advised to make every effort to comply with notice provisions, but failure to give timely notice may not, in itself, always be determinative of whether the Contractor will be successful in making a claim.
Under construction contracts governed by the Standard Building Contract Terms (VOB/B) the contractor has to notify the customer as soon as he becomes aware of circumstances that may lead to higher costs or that may delay the project. If he fails to do so, he will most likely get no additional payments from the customer but will nevertheless will be obliged to complete the project as contractually agreed. However, several exemptions to this rule apply.
Ordinarily, contracts provide rules governing the claims of the contractor for extensions of time and additional costs. In that context, contracts will provide for short periods for giving notice of such claims, failing which the claim will lapse. As a general principle, such agreements are permitted as long as the time limits are not excessively short.
Yes, these types of provisions are common and are upheld by the French Courts.
Time restrictions are broadly used in commercial contracts and recognised as conditions precedent by the Greek courts; however the validity of extensively strict terms might be challenged on grounds of unfairness, especially if invoked by a party contrary to the good faith and the fair trade practices (281 GCC). As a general rule, in order for a party to be found in default, a prior letter of formal notice by the other party is required (340 GCC), unless a due date was specifically provided for (341 GCC), but the parties are free to agree otherwise. Claims brought under public contracts are typically subject to exclusive time limits, as set out in multiple provisions of the Public Procurement Law.
Government contracts contain strict notice provisions for additional time and money which will be upheld by the courts. Such conditions are also valid in private sector contracts.
Construction contracts in Malaysia typically contain strict provisions governing the procedures for an extension of time and/or additional payment claims, e.g. Clause 44 of the PWD FORM 203A (Rev. 2007); Clause 50 of the PWD Form DB (Rev. 1/2010); Sub-Clause 20.1 of the Conditions of Contract, FIDIC Yellow Book.
Malaysian courts have upheld the requirement for strict compliance with these procedures. In MMC Engineering Group Bhd & anor v Wayys & Fretag (M) Sdn Bhd , the High Court discharged the Employer from any liability for claims which were not made within the time limits set out in the contract.