Construction notices are one of the most underrated tools in the industry. Communication is, unfortunately, a big problem on construction projects; and notices are a great way to start fixing it. When something unexpected happens, notices inform everyone of the issue and help get it resolved before it becomes a serious problem. And, if problems do arise, failure to send required notices could jeopardize the ability to recover any additional time or costs of performance.
Explaining Notice Provisions
When some occurrence impacts a contractor’s ability to perform their work, notice provisions will provide guidance on how to proceed. Failure to follow these guidelines can negatively affect all parties on the job site.
In the words of our CEO Scott Wolfe,
“A construction contract sets the rules of the game. Playing the game requires contractors to utilize a variety of forms and documents at different moments depending on their situation.”
One of the most important of these documents is a construction notice. Often, it doesn’t matter whether or not the contractor is entitled to extra compensation… what matters is whether they have followed proper procedure. They are a crucial (yet frequently overlooked) mechanism to increase communication, reduce the likelihood of disputes and secure certain rights for every party.
Notice provisions can be found everywhere in construction contracts and can come in all different shapes and sizes. Some may be required, either by law or by contract, and some may simply be voluntary. They can also be proactive or reactive depending on the situation. Regardless of the type, with proper notice procedures in place, issues can be resolved quickly and informally; without having to take combative, and potentially expensive, measures.
Condition Precedent
Notices prompt certain events to happen once sent; this is known as a condition precedent. A condition precedent in a contract is an event which must take place before a party must perform or do their part. In the construction realm, this means that sending notice must happen before any claims can be approved. They will trigger certain contract clauses, to inform the parties on how to proceed. Without strict adherence to these notice procedures, a sub may lose their ability to recover any increase in costs, or worse, find themselves in breach of contract.
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Importance of Notices
Construction notices, although seemingly innocuous, are vital for successful contract performance. How can a party be expected to fulfill their obligations and react to a situation on the job site, if they are unaware of the issue? Notices allow the client to assess the problem and determine if and how to respond. From a contractor perspective; notices enable them to mitigate damages and secure their rights if the problem gets worse.
Whenever a defect, change order, delay, differing site condition, or any other event that may affect a contractor’s time and cost of performance; a notice should be sent. Notices benefit all parties by providing clarity and opening the channels of communication. Proper project management includes being able to roll with the punches. That’s because construction projects are, essentially, organized chaos. In order to succeed, there needs to be a way to monitor and control any variances to the gameplan effectively.
What the Notice Provisions Should Include
Notice provisions should be clear, concise and unambiguous in regards of how to proceed. Whenever a contractor is faced with clauses containing a notice requirement, there are a few things that should be kept in mind.
Time Limits
The amount of time a party has to provide notice can vary contract-to-contract. Commonly, these periods are somewhere between 7 and 30 days. Time limits can be negotiated by the parties, but once set, these are important deadlines to keep in mind. The clock will usually begin ticking when the contractor becomes aware of a claim. This is a high point of contention. Many disputes revolve around when a contractor/sub becomes aware of the potential claim. Which is why it’s essential to send those notices as soon as possible.
Information that Should be Included
When sending a notice, the information included should ride the fine line between detail and clarity. It should sufficiently describe the impacting event in detail and any potential effects on the party’s scope of work or schedule. If the event is a delay or defect, the notice should include estimates on how much additional time or costs it will take to remedy the problem. Also, any and all supporting documents should be included to provide a clear picture of what is happening on site. This can include daily reports, photos, and any other relevant information.
How the Notice Should be Sent
The notice provision will typically list who the notice should be sent to, along with how the notice should be sent. This could be by email, regular mail, certified mail with receipt requested, or even just personal service. Each form comes with its own issues. But generally speaking, as long as there is some way to prove the delivery, the notice will typically be deemed to have followed protocol.
Bottom Line
Even when not required, construction notices are invaluable to the successful completion of a construction project. The more open the channels of communication on a project are, the less likely there will be misunderstandings, disputes, and abuse. Even worse, contractors and subs can easily lose important rights and claims when failing to send notice. Don’t lose out on the money you have rightfully earned over a technicality!
Additional Resources
- Construction Industry Communication is Weak | Notices Will Make it Stronger
- Construction Notices 101: Preliminary Notice vs. Notice of Intent
- What is a Notice of Completion?
