Construction Law/Notice Requirement

Advertisement


Question
QUESTION: Dear Sir,

My question is about a notice in Sub-Clause 20.1.

A Contractor gave notice when the Engineer issues a Variation to claim extension of time and cost without referring to Sub-Clause 20.1 within the 28 days . When he issued the Variation, the Engineer stated that the time and cost implication would be advised subsequently.

Can the Contractor’s notice be taken as given as per Sub-Clause 20.1?

According to his advice, the Engineer issued an official Variation Order showing the cost and the additional time he estimated for the execution of the Variation.

After receiving the above, the Contractor did not give notice disagreeing with the time the Engineer estimated and notifying his intention to claim in Sub-Clause 20.1. But then after about four months, the Contractor submitted a claim for extension of time which was nearly four times what the Engineer estimated.
By the way, the Contractor had the design and the quantities also at the time the Engineer issued the Variation first.

Sub-Clause 20.1 of the Contract in the relevant part says:

“If the Contractor considers himself to be entitled to any extension of Time for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance.

If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim.”

The Contractor also associated the claim with the Employer’s failure to grant possession of Site, but again he did not give notice as per Sub-Clause 20.1, in terms of Sub-Clause 2.1.
Can the Engineer reject the Contractor’s claim for extension of time because of his failure to give notice within 28 days as per Sub-Clause 20.1 [in terms of Clauses 13 and 2.1] after he was allowed to know the additional time the Engineer estimated?

Kindly be informed that the Contract is based on FIDIC Multilateral Development Bank Harmonized Edition June 2010.

Being deeply indebted in advance and looking forward to receiving your expert advice, I remain.


Alemu

ANSWER: Dear Alemu,

I would advise you to tread carefully here.  The cause of the delay was an instruction issued by the Employer; likewise with the delayed access to site.  Courts do not like people who profit from their actions due to the inaction of another party.  tHERE IS SOME CASE LAW IN uk ON THE MATTER.  It could be, although the Engineer would deny it, that the Engineer deliberately underestimated the effect of the variation.  

The Engineer has the power to reject the claim due to the time bar in clause 20.1, but he must be ready to be over ruled in arbitration or by the courts.  Clause 20.1 has been amended in the Gold Book (DBO) and most authorities expect that drafters of contracts will include that amendment in all new contracts.  

I would discuss the matter with the Contractor and try to come to amicable settlement.  You may have to accept some extra cost, but it will be much cheaper than a court case.  

---------- FOLLOW-UP ----------

QUESTION: Dear Sir,

I am extremely thankful to your proficient reply. I have a follow up questions, however.

Would the Contractor’s failure to submit detailed particulars within the period specified in Sub-Clause 20.1 bar his entitlement?

Is the Contractor obliged to mitigate delay to the extent practicably possible by deploying more number of crews as the Engineer considers it reasonable or fair for a new work instructed under Clause 13 [Variation]? By the way, the work instructed was construction of masonry stone, which is more of labour based construction.

Being deeply indebted in advance and looking forward to receiving your expert advice, I remain.

Alemu

Answer
Dear Alemu,

All parties to the contract are obligated to mitigate delays where possible.  It might not be possible for him mobilise extra resources for a variety of reasons.  Even if he can mobilise them he might not be able to use them effectively.  

Incidentally, I omitted to mention a couple of points in my first answer as I was dealing solely with the claims aspect.  The Contractor is due an EoT only if the activity delays his critical path and hence the Time for Completion, and that he proves his case.  I recommend that all parties to an EoT discussion should download and study the SCL Protocol on Delay and Disruption www.eotprotocl.com It is a good basic guide to the requirements for presenting and assessing a claim for an EoT.  

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Peter M. Elliott

Expertise

First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

©2016 About.com. All rights reserved.