Construction Contracts often contain Notice of Delay provision through which one party can complain to the other that the work is being delayed due to the other’s conduct. While these provisions can allow a party to recover increased costs caused by another’s delay, you must be careful to follow all the requirements of these provisions.
A recent case out of Texas highlights two issues often faced with Notice of Delay provisions, compliance—whether the parties complied with the notice provisions, and consistency—whether the contract contained similar notice provisions throughout. In Balfour Beatty Rail v Kansas City Southern Railway Co., the court reviewed whether parties could recover damages caused by the other party’s delay.
The railroad claimed that the contractor could not recover delay damages because the contractor did not provide timely notice of the claim and failed to provide the notice as required by the contract. Obviously, the contractor disagreed.
The court noted that the contract contained several different notice provisions. The contractor was required to fax or overnight notices of delay, but the provision did not say when the notice was to be provided. The owner was required to provide notice of default within 7 days of the default. The contractor was required to give notice of differing site conditions before the site was disturbed, and the differing conditions notice provision contained “strict compliance” language, while other provisions did not contain “strict compliance” language.
Noting that the “strict compliance” language in the differing site conditions provision, the court rejected the contractor’s differing site condition claim because notices were e-mailed, and were not provided by fax or overnight mail. The court ruled that contractor’s e-mails provided adequate notice of delay because the delay provision did not contain the “strict compliance” language. Finally, the court rejected the owner’s default claim because the owner did not comply with the 7 day requirement.
This case is informative for two reasons. First, a court may enforce the notice requirements as written and you are best served complying with those provisions. Second, cobbling together provisions from various contracts can create inconsistencies that cause unintended results. The last thing anyone wants is to lose a claim because notice was not properly provided.