Abstract
The building industry has in recent years seen huge costs incurreddue to disputes arising on notice requirement clauses. Theseclaims could have been averted if the parties had been diligent inproviding the necessary notices. This article sets out to explorethe law briefl y as interpreted by the courts in common law andequity and discuss the possibility of defence under the principle ofpromissory estoppel. More importantly it also shares the author’sview on how such pitfalls could have been prevented by givingthe proper notices within the timeline required by the contractconditions. It cannot be emphasised enough that contractorswould be wise to comply strictly with the notice provisions in thecontract instead of relying on the estoppel principle or waiver orunconscionability to save their day. Notice clauses essentiallyrequire a competent contracts administrator to follow the time lineprovided in the contract conditions and would be most effective ifthe project team worked closely with the contracts administratorto ensure that proper notices are given when directions orinstructions are received. Although it is common to see noticeclauses which make it a condition precedent for a contractor to beentitled to claim for an extension of time or loss and expense claimbeing interpreted restrictively, in any litigation or arbitration it isalways diffi cult to predict how the courts or tribunal would be willingto uphold such notice clause. It is therefore in the interest of theparties that notice clauses should be properly observed. Suffi ceto say, failure to comply with a notice clause and time bar may befatal to a claim.
Highlights
The effect of time stipulations and time limitation clauses in construction contracts have traditionally been interpreted by the courts of common law and equity differently
Time stipulations have been usually treated as essential terms and a failure to meet a due date will give the innocent party the right to terminate the agreement and to recover damages
It is important for contractors to recognise that where time stipulation is a condition, a failure to meet the specified time will be a fundamental breach of the agreement
Summary
The effect of time stipulations and time limitation clauses in construction contracts have traditionally been interpreted by the courts of common law and equity differently. Where time is not expressly made of the essence, it will be a matter of construction to determine whether the contract indicates an implied agreement that time is to be a condition [3]. When making such an assessment, courts will usually consider factors such as: 1. In relation to the form of words used, courts tend to adopt a hierarchical approach Phrases such as “proceed with all due dispatch” [5], “on or about”, “within a reasonable time” or “as soon as possible” [6] imply that the parties did not intend to make time of the essence. Expressions such as “at the latest by” [7] or “within a number of days” would imply that the parties did intend to make time to be of the essence
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