the other party is not prejudiced and had actual or constructive
notice of the claim and the facts underlying the claim. However,
even in these states, a complete failure to give notice can be fatal.
Best practices and key takeaways
Because of the harsh results that can follow a failure to comply with
your contract’s notice provisions, it is very important that these provisions
are reviewed before contracts are signed. Many contractual
notice provisions are complex, confusing and poorly drafted. Later
disputes can be avoided if the parties agree to reasonable and clear
notice provisions when entering into the contract.
Additionally, procedures should be put in place to ensure
timely compliance with notice requirements. For contractors
working on multiple projects simultaneously, the project personnel
responsible for tracking and giving notice for potential
claims must be aware of what the notice requirements are for
each project and not just assume that notice requirements are the
same across projects or contracts. If your contract does not have
a specific timeline for giving notice of claims, it is best to serve
notice as soon as the claim or impact is realized. This reduces the
chances for later argument by the other side that a delayed notice
somehow prejudiced them and impaired the ability to resolve a
problem in real-time.
If unsure whether an incident is a claim or triggers a valid
change that requires notice, it is best to give notice of the potential
impact. While one does not want to be overly aggressive and
constantly providing notice, if the basis for a claim or change is
LEGAL
discovered to be wrong, the notice may be withdrawn. However,
if notice was not given, and the issue becomes significant, the possibility
of a valid claim being rejected for failure to give notice is
a real risk.
Notice should be given by formal writing, although an electronic
writing may be sufficient if agreed upon by the parties.
If you prefer a certain form and method for giving notice, make
sure it’s incorporated into your contract. It is much easier to later
assert that a formal notice was valid when pursuing a claim rather
than trying to rely on other project documents (meeting minutes,
dailies, RFIs) to prove that the other party was on notice of your
claim. A formal, well-documented, contemporaneous paper trail
increases the likelihood of prevailing down the road.
Finally, if all else fails and a significant dispute of sufficient
value arises, consultation with an experienced construction attorney
can assist with pursuing a claim that includes a dispute about
the adequacy of notice to a more successful resolution. t
Benjamin Morris is a senior counsel with Foley & Lardner LLP’s
Construction Practice in San Diego. He can be reached at 858-847-6750
or bmorris@foley.com.
References
1. Endicott Constructors Corp. v. E. Amanti & Sons, Inc., No.
1:14-CV-12807-LTS, 2017 WL 3028877 (D. Mass. July 14, 2017).
While it may seem simple, many contractors fail to
comply with contractual notice requirements or to
provide any notice of potential claims when they
arise, putting recovery for valid claims at risk.
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