Developments to be brought into condition precedent notice provision in contractor's claim clause for betterment of the contractor: contractor's perspective

Abstract

There is now a growing propensity to apply the “condition precedent” notice provision to the contractor’s claim clause in standard forms of contracts throughout the world. Accordingly, valid and meritorious claims of the contractors are forfeited if the contractor cannot comply with the time bar notice provision. The main intent ofthis notification is to alert the employer or the engineer at an early stage about the events that will take root to incur additional time and/or cost to the project and allow them to manage relevant consequences in fact. In that sense, it is questionable how the contractor can be deprived of his right to receive additional payment and/or time for a real claim situation, only because ofthe lack oftimely notification. On the contrary, notification of the employer's claim is required to give as soon as possible after the employer became aware ofthe event giving rise to the claim. Therefore, the time bar notice provision in contractor’s claim clause is now argued critically both in the construction industry as well as in the judiciary worldwide. Therefore, this document examines the importance of claim notification with respect to the opinion of contractors and the causes of non-compliance with the notification provision. To understand the perception of contractors in the industry, a survey of questionnaires and unstructured interviews was conducted. Therefore, several additional reasons were identified for the lack of claim notices despite the reasons available in the literature. Further, this paper examines challenges to condition precedent notice provision in contractor’s claim clause and proposes suitable developments to the same for the betterment ofthe contractor by addressing identified shortfalls in the contractor’s claim clause. According to the collected data and analysis procedures employed, the most affected challenges to contractor’s claim clause were: “Unjust enrichment”, “Conflicts with Prevention Principal”, “Defense for claims”, “Doctrine of Penalty”, “Unlawful exercise of rights” and “Loosing good faith obligation”. It is important to address those challenges when developing the contractor’s claim clause.