Notice Requirements In Construction Contracts

Introduction

It is common for construction contracts to impose notice requirements on parties seeking to make claims in relation to the contract. Such clauses often impose multiple timelines on claimants, and state that noncompliance will invalidate the claim. Canadian courts have demonstrated that they will strictly enforce notice requirements, and have stated that compliance is a condition precedent to making a successful claim.

However, courts will sometimes allow deviation from contractual notice requirements in situations where the parties have received constructive notice of the claim, or where their conduct otherwise disentitles them to rely strictly on the terms of the contract. This article will explore the case law interpreting notice requirements, and discuss the circumstances in which courts will decline to enforce them.

Example of Notice Requirement

Contractual notice requirements as part of the claim process are commonplace in construction contracts. A good example of such a clause is GC 6.6 of the Canadian Construction Documents Committee ("CCDC") 18 - 2001 Civil Works Contract. This provision governs the claim process, and imposes notice requirements on the parties:

GC 6.6 CLAIMS

6.6.1 If the Contractor intends to make a claim for additional payment, or if the Owner intends to make a claim for a credit to the Contract Price or for damages of any kind, the party that intends to make the claim shall give notice in writing of intent to claim to the other party and to the Consultant as soon as practicable, but no later than 10 Working Days after commencement of the event or series of events giving rise to the claim. Failure to provide such notification shall invalidate the claim.

6.6.2 Upon commencement of the event or series of events giving rise to the claim, the party intending to make a claim shall:

.1 take all reasonable measures to mitigate any loss or damage which may be incurred as a result of such event or series of events, and

.2 keep such records as may be necessary to support the claim.

6.6.3 Within 30 Working Days after commencement of the event or series of events giving rise to the claim, or such other reasonable time as may be agreed by the Consultant, the party making the claim shall submit to the Consultant a detailed account of the amount claimed and the grounds upon which the claim is based.

6.6.4 Where the event or series of events giving rise to the claim has a continuing effect, the detailed account submitted under paragraph 6.6.3 shall be considered to be an interim account and the party making the claim shall, at such intervals as the Consultant may reasonably require, submit further interim accounts giving the accumulated amount of the claim and any further grounds upon which it is based. The party making the claim shall submit a final account with 30 Working Days after the end of the effects resulting from the event or series of events.

6.6.5 The Consultant's findings, with respect to a claim made by either party, will be given by notice in writing to the other party within 30 Working Days after receipt thereof by the Consultant, or such other time period as may be agreed by the parties. If such finding is not acceptable to both parties, the claim shall be settled in accordance with Part 8 of the General Conditions - DISPUTE RESOLUTION. [Emphasis added]

According to the CCDC, GC 6.6 "is intended to address the procedural matters related to the making of a claim for additional payment of any kind".1 This broad wording captures claims including differing site conditions, delay and impact costs. GC 6.6.1 states that a party seeking to make a claim must give notice in writing of its intent to do so to the other party and the Consultant "no later than 10 Working Days after commencement of the event or series of events giving rise to the claim".2 Failure to provide this...