Avoiding Construction Disputes Pt. 4
What constitutes a satisfactory Notice?
Contracts vary in their specific requirements for submission of satisfactory notices, but as a rule:
All notices must be in writing
A separate notice should be given for each Change
The notice should identify if there is likely to be an impact on the Contract Price and Program
If the impact on price and program is known, then supporting details should be included with the notice
The notice should be signed by a person with delegated authority and sent to a recipient with similar delegated authority
The notice should be sent by the method stated in the contract, i.e., Email, post or uploaded to a document control cloud storage and distribution system or a combination of more than one, where specified.
If there is a condition precedent, then the notice should be given within the period stated in the contract.
Contractors should be aware that different rules relating to acceptable notice apply in different jurisdictions:
In an English case, Steria v Sigma EWHC 3454 (TCC)[2007] the judge suggested that an entry in minutes of meeting could be effective notice, but only if it the minutes were prepared and sent by the Contractor. The judge stated “The essence of the notification requirement in my judgment is that Sigma must know that Steria is contending that relevant circumstances have occurred and that they have led to delay”
Conversely, in Alberta, Canada, in ANC Developments Inc v Dilcon Constructors Ltd, 2000 ABCA223, 84 Alta LR (3d) 235 “The Court made clear that neither of the complaints made at site meetings and recorded in minutes nor subsequent requests for compensation constituted sufficient notice”. [This case was referenced in a British Columbia Supreme Court in Maglio Installations Ltd. V Rossland (City of), 2018 BCSC 1313, 2018 Carswell BC 2084]
It is also noted, in Ledcor Investments Limited (Ross Steel Fabricators & Contractors) v Ellis-Don Construction Ltd, 2017, that even if a letter is sent, it may still not constitute notice. Ellis-Don had written stating:
“In addition to impacting the schedule, Ross Steel also forced Ellis-Don to expend substantial monies to accelerate the work in an effort to recover the schedule. We are currently assessing the financial impact that Ross Steel's slippages have had on Ellis-Don and we intend to recover the costs from you”.
The Court reasoned that this “merely constituted an “intention to claim” rather than an “actual claim” sufficient to satisfy the notice requirement in question”.
For Contractors, simply do what the Contract requires. The bullet points at the start of this post should suit most contracts.
If you need help with the commercial administration of your contract, our contact details are on the website: www.profacto.ca