Notices, Conditions Precedent and Time Bars

One of the most frequently asked questions at CPD events and our Claims Class Intensive Training Courses relates to notices. The questions are usually along the lines of, “If we fail to send a notice of claim, or if we do not send the notice in time, will our claim be time-barred?”

I guess the reason this question is asked so often is that the answer is not straightforward. To give a lawyer’s response: on the one hand, you could be, but on the other hand, possibly not. So, to fully answer the question, we should look at what it will depend on.

The legal jurisdiction is the most important factor here. In common law jurisdictions, if you have signed a contract in which you have agreed that you will be time-barred unless you submit a notice within a stipulated time period, then you will, in fact, be time-barred.

In civil law jurisdictions, however, time-barring may not align comfortably with the law. Civil law often contains provisions that require the parties to a contract to act fairly. If one party sought to apply a time-bar clause for an event that they had caused, then this might not be regarded as acting fairly.

Civil law often prohibits undue enrichment. If a party attempted to recover delay damages for a delay that they themselves had caused, then this could be considered undue enrichment.

Additionally, civil law often prescribes that a just claim never expires, so again, the application of time-bars may not be permitted.

To further complicate matters, there are situations in which these civil law principles may not be applicable. Take, for instance, a scenario where an Engineer’s instruction results in a claim for additional payment or an extension of time, but the Engineer could not reasonably have been aware of this at the time the instruction was issued. In such a case, failure to submit a notice could deny the Engineer the opportunity to mitigate the situation, possibly by canceling the instruction. In such a situation, it could be argued that the Contractor had not acted in good faith, and the claim may be dismissed.

As you may have gathered, this subject is complicated. However, there is a very simple solution: if the contract stipulates that you should submit a notice within a certain time period, then make sure you submit the notice.