Time Bar Clause Waived: City Inn Revisited (Part 2 of 2)

Last Friday's City Inn v Shepherd Construction†judgment is important for its treatment not only of concurrent delay but also of a time bar clause (for our Law-Now on the former: click here). Similar clauses are found in construction contracts like the NEC3 (the form of choice for the London Olympics and, it seems, Crossrail). They defeat (usually contractors') claims that do not meet specified procedural requirements.

The clause in question required the Contractor within ten days of receiving an instruction to give the Architect details of its estimated effect, failing which the Contractor would lose any entitlement to extend the completion date for the works. If the Contractor's entitlements arising from the instruction were not agreed within five days the Architect might withdraw the instruction or require the Contractor to proceed anyway.†

The Contractor gave a timely but non-compliant notice. The judge decided this did not defeat the Contractor's extension of time ("EOT") claim because the Architect had waived the notice requirements:

"The architect has power, at least under the JCT Standard Forms, to waive or otherwise dispense with the procedural requirements of the contract" such as those in the time bar clause.

Those requirements were waived (albeit after the ten-day deadline expired) by the Employer and the Architect initially rejecting the EOT claim without expressly relying upon the time bar clause and, later, the Architect granting an EOT despite the Contractor's non-compliance.

The Contractor relied upon the waiver (but again only after the ten-day deadline expired), so that it could no longer be withdrawn, by pursuing the claim and other claims without any regard to the time bar clause.

The Architect was deemed to have had the necessary knowledge of the time bar clause so as to waive it: "It must generally be presumed that an architect is aware of the whole of the terms of the building contract under which he is acting; that seems fundamental to the architect's responsibilities".

It did not matter that the Architect had an express power to dispense with the notice requirements which it seems was not operated.

The reaction to this judgment will depend upon where they stand

Contractors are likely to interpret it as a fair decision on the facts.

Employers will probably question the...