Wise Up Wednesday: No Notice – No Extension of Time – No Payment!
The first thing to understand, and I cannot over emphasise this point, is that if you don’t issue notices when you should, you won’t get extensions of time and you won’t get paid for delays.
Worse still, you lay yourself open to being blamed for delay and being clobbered by the Contractor!
Nor is it the case that you can issue one extensions of time notice and then forget all about your obligations under the contract. In order to properly protect your interests, you must comply with all of the terms of the contract, and you must do what you are required to do, as and when and how the contract requires you to do it.
If the contract requires a notice to be sent on pink paper and in a green envelope (obviously an extreme example) for it to be valid, then that is what you must do!
If the contract requires you to give certain details or fulfill certain criteria, then that is what you must do. It might be tiresome and annoying, but would you rather lose your money, your job, or your company?
Doing Nothing Is Not An Option!
Please do not under any circumstances adopt the mindset that; “we are ok”, “we don’t need to do anything special”, “it will sort itself out”, “ the contract is the last thing we need to think about right now!” Or any other version of burying your head in the sand.
Please take the contractual side of things just as seriously as every other aspect of your works.
If things start to go wrong and you are prevented from doing your works when you were contracted to do them, you must ensure that compliant delay notices are issued in order to protect your interests.
DO NOT allow anyone to persuade you not to issue delay notices!
This is the oldest trick in the book, and one that has cost Specialist Sub-Contractors £millions over the years!
Some Contractors deliberately use this ruse to stitch up their Subcontractors, and the majority of the big national Contractors non- standard contracts make the giving of notice a condition precedent to your entitlement to extension of time and/or recovery of loss and expense.
“We note that to date we have not received a formal written request for an extension of time…”
And
“We have no records of any written notices…”
Are two lines from a letter to my Client rejecting their claim for an extension of time and loss and expense. So be warned!
Remember that those suggesting you don’t need to “get contractual”, will usually be the ones screwing you over later when the financial consequences are being determined!
The Consequences Of Inaction
You need to know that if you delay the Contractor (or he decides to blame you anyway), you will become liable for not only liquidated damages, but for what I call a thick sandwich of costs!
This sandwich is made up of the Liquidated Damages, the Contractors own costs and any other costs that the Contractor incurs, such as those of all his other Subcontractors!
Check The Contract – Check The Notice
Make Sure Your Notice Relates To The Contract
As with every other problem that arises, the remedy or answer lies in the contract. And for Specialist Contractors, Trade Contractors and Subcontractors this is compounded by the myriad of contracts out there.
Any delay notice must relate to the provisions of the contract including any bespoke amendments. Each contract will potentially have slightly different requirements in respect of delay notices, what is required, when it is required and even what they are called.
Almost every Contractor has their own version of terms and conditions or bespoke amendments to Standard Forms such as the JCT forms. So, please pay very careful attention to the contract. Better to double check and be safe.
Back Up The Notice With Evidence
Don’t rely on anyone else to have details of the delay issue. They might be the party who ends up making the final decision if the issue gets referred to Adjudication or Arbitration, and/or be keen to see your claim fail.
Wherever possible supply back up information to support the delay notice, if you can cross reference all other information, including, if possible, a programme showing the effect on your works. If you can’t send back up information at the time, then follow it up as soon as you can with further information.
Mitigation
You are usually required to constantly use reasonable or maybe even best endeavours to prevent delay, even if the delay event is not your fault. You must show that is what you are doing.
But please think carefully before offering mitigation proposals. Can that mitigation actually be achieved?
If you can mitigate, then great, but why say something to the Contractor that is very difficult or can’t actually be achieved. It is far better to be upfront and say this is the effect of the delay, we will try and mitigate this if possible.
In addition, consideration and care should be given when considering bringing additional resources onto the project. Do you have an express agreement for the recovery of any additional costs? What impact will they really have?
As always, check what the contract says.
Up-date, Repeat, Inform
You can NOT issue one notice and then forget all about your obligations under the contract. In order to properly protect your interests, you must comply with all of the terms of the contract, and you must do what you are required to do, as and when and how the contract requires you to do it.
If the contract requires you to give certain details or fulfill certain criteria, by up-dating notices, then that is what you must do. It might be tiresome and annoying, but if you don’t you are putting your money, your job, or your company at risk.
Extensions Of Time – Last But Not Least
Above all else remember that the aim is to comply with the terms of the contract and demonstrate your entitlement to extensions of time both to protect you from being clobbered by the Contractor, and to preserve your entitlement to be paid for delays.
Please, please, don’t say; ”But, it doesn’t work like that in the real world.”
In the “real world” we have seen the Contractor’s set offs and claims against his Subcontractor, literally destroy our Client’s business.
There is no shortcut, no easy answer. No quick fix. But there are steps you can take and with our help you can protect your business and sleep easier at night.
Because, from time to time you are going to need external support, and our web site is a great place to find lots of useful information and details of all the support services we provide.
And of course you can call our friendly helpline on 01773 712116 or email info@streetwisesubbie.com for a free no-obligation initial discussion, so that you can get a very quick idea of what we can do to help you protect your interests and resolve your problems.
And please do not think that if you are the boss you should automatically have all the answers. This is simply not the case, we have years of professional and practical experience of dealing with this stuff every day, and we are here to help you.
Finally, I hope you enjoyed my Wise Up Wednesday email and that it gave you some food for thought, and I sincerely hope to speak with you soon.
More On Extensions Of Time Or More Information
You can contact us about extensions of time on 01773 712116 or email info@streetwisesubbie.com.
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