Importance of Notice is in Construction Contract

Published On 09/14/2021
Author : Kinjal Shah

Notice clauses are contained in several contracts and play a vital role in the construction industry in terms of the contract. These clauses are kept for client and contractor to notify one another in certain circumstances to keep each other awake to any issues which could cause issues. 

When dealing with notice clauses, it is important to look out for:

  • Given notice and making of claims

  • Practicalities

Construction contracts often include needs or requirements for the parties to issue notices to one another under certain circumstances. This is typically meant to supply a warning to the mechanism, sanctioning the parties to arrange for, or react to, specific things. The contract should give details about circumstances under which notice is needed, 

Failure to follow the right procedure may end up in a subsequent claim being defeated.

Notice clauses are important and necessary because they allow the employer in a construction project an opportunity to consider the issue raised and solve time to react to problems such as delays. The employer needs to find out the cause of the issue and whether or not the contractor may be entitled to additional time or money as a result.

The notice makes clear what the contractor has to do to comply with responsibility under the contract and if it hits problems such as delay and needs to extend the completion date or claim additional money.

 Notice Includes:

  • Default payment notice.

  • Notification of failure to proceed regularly 

  • Notice that there is a delay, or that there is likely to be a delay that could permit an extension of time

  • Notice of intention to refer a dispute

  • Notice to proceed

  • Payment notice

  • Statement of partial possession

  • Statement of retention

  • Suspension notice

  • Termination notice

A notice clause should be precise and unambiguous about what is required.

A typical notice clause will contain:

  • What the notice should look like

  • Whether it can be sent by post, fax, or email

  • The information it should contain

  • The time limit for sending it

In several cases, the courts may take into account giving notice to be a condition precedent for creating a valid claim. This can rely on the kind of claim and also on the language of the notice clause. Typically, clauses use the words 'condition precedent' when describing the importance of notice, however, if these specific words don't seem to be used the clause will still have its impact.

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