Construction Law/Sub-Clause 20.1

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Question
Dear Femi,

Here I come once more.

This 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,

Thanks for your question as always.

In plain terms, Contractor is expected to give notice and notwithstanding that the clause says that, without notice, no entitlement, it has always been a challenge that would eventually bother on the "issues of law" particularly, like i always mention, most countries have their laws made in such a way that, notice time bar clause does not have the final ruling on whether entitlements to claim would be lost as a result of non compliance to notice time stated in the contract but rather, some form of provisions of the law usually exists that, would set aside this requirement although, any evaluation so made or to be made would consider if the Client has suffered any loss or damages as a result of the Contractor's non-compliance to the notice time bar clause. This is my submission.

On the Engineer's determination, nothing in the contract sets aside the Contractor's right to challenge Engineer's determination at anytime during the currency of the contract and even beyond as such subject challenge when results to dispute between the Engineer and Contractor could be taken to DAB and then, if not satisfied, taken to Arbitration for resolution and until when it gets to this point that, the arbitration award becomes final and binding. Some contract conditions wordings have some notice time bars within which the Engineers determination or DAB determination could be binding but this is usually binding until when upturned in Arbitration.

Hope this clears your doubts.

Femi  

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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