Notification Requirements in Construction Contracts: An Expert’s Viewpoint
All contracts in relation to the construction industry, whether standard form or bespoke, contain provisions with respect to notification requirements. The clause specifies that a contractor must give notices to the employer in the case of any event with deviates from the
provisions and the agreed terms specified in the contract. This deviation may be in relation to (1) the completion date, (2) change in scope of works or variations, (3) additional cost that needs to be incurred that is not allowed in the contract. Such terms serve an
important purpose, as such, this allows matters affecting project execution to be investigated while they are still current and can be resolved immediately
Reasons for provision of Notifications
Notices are a means of informing the other party to a contract of any events which have changed the circumstances in relation to execution of a contract. These notices are beneficial to both the contractor as well as the employer for the following reasons:
- It would allow the employer to investigate the situation at the time of its occurrence, take steps to either resolve the issue (if any), find alternatives, and/or provide either time related or cost related relief to the contractor
- Any employer’s primary concern cannot be whether the contractor is entitled to relief, but rather what issues are causing the time and cost impact and how they can be mitigated. The employer, after being informed of these events, may seek to undertake its own mitigation measures for timely completion of works.
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What are notification requirements in construction contracts?
Notification requirements are clauses in construction contracts that obligate a contractor to inform the employer of any events that deviate from agreed terms — such as delays, additional costs, force majeure events, or scope changes — within a specific timeframe.