Construction Law Tips – Don’t Get Bit by Contract Notice Provisions

You have worked your tail off and done everything right.  

When the project owner or its representative asked you to accelerate, you did.  When you were asked to substitute materials or construct something different than the contract requires, you did.  When you were asked to re-sequence your work, you did.  

You did these things at considerable additional cost, and sometimes the sum total of these activities took more time than the initial project schedule allotted.  

Notwithstanding that you have built the perfect project and have delivered exceptional customer service, you are denied additional compensation.  Even worse, you are informed that you are not entitled to payment of the original contract price because you did not meet the initial project schedule or did not build per the contract.  

Irritated, you point out all the emails, text messages, and conversations that took place directing or authorizing the changes.  You are informed that you do not have the right to rely on emails, text messages, and conversations, and that you failed to follow the notice provisions in the contract.

Overlooking notice provisions is a common mistake even experienced contractors and subcontractors make.  You need not turn every aspect of a construction project into a legal claim but must take notice provisions seriously.  

4 Steps to Troubleshoot Notice Provisions – In Advance

Contract notice provisions can be buried in the most unsuspecting places.  They can also be from the insignificant to the extreme but are often negotiable if you negotiate at the contracting stage.  

1. Read them carefully at the contracting stage.  
2. Devise simple forms that can be completed by your office staff when a certain type of notice is required.  
3. Outline when and how your field personnel will notify office staff of events that may trigger notice requirements.  
4. The fourth and final step is to properly give notice and maintain written proof of that notice.

Some notice provisions are self-contained within one section of the contract and may even be labeled “Notice.”  Other notice provisions may not have a label and may not be self-contained within one section of the contract; they may be spread throughout numerous sections of the contract.  

Still others may not be contained within the four corners of the contract at all but may be contained within an exhibit to a contract or within some other thing which is considered part of the “contract documents.”  

For example, certain contracts which include road or underground utility construction may incorporate by reference the Florida Department of Transportation’s Standard Specifications for Road and Bridge Construction.  

These Standard Specifications are 1,160 pages long and almost exclusively technical in nature.  However, buried within this text are numerous notice and claim provisions which, if not followed, can place the contractor squarely within the dire circumstances outlined above.  It is therefore important that you not gloss over any portion of the contract documents.  

Read Notice Provisions Carefully – Before You Sign

You are busy at the contracting stage and may feel that you can look these notice provisions up later when you have the need, as in “I’ll cross that bridge when I get to it.”  

This could be a significant mistake.  It is not uncommon for contract documents to require notice within 48 hours of an event’s occurrence.  If you are unaware of this short timeframe at the contracting stage, you will likely miss the deadline when you are later in the midst of construction activity.  

It is also not uncommon for contract documents to require multiple notices for the same event.  For example, a contract may require an initial basic notice within a short period of time, and then a more complete notice later.  

If you fail to timely provide just one of the notices you may fall squarely within the dire circumstances outlined above in the opening paragraphs.  

Contracts may also impose different notice deadlines for different types of events, so do not assume that one size fits all.  For example, you may be required to provide notice within five days of an event which will delay your work but may have a shorter or longer period to provide notice of any circumstances which entitle you to additional compensation.  

Create Forms for Notifications

To avoid a misstep when you are later in the midst of construction activity, consider preparing a chart at the contracting stage which summarizes all the different notice requirements and cites to the applicable section(s) in the contract documents in case further detailed study is needed.  

Divide the chart by notice types (e.g. additional compensation, injury, delay/time extensions, etc.).

To further diminish the chance something is missed when you are later in the midst of construction activity, devise simple and intuitive forms well in advance of needing them.  

Insert fields that call for specific information (e.g. date of form, date of event at issue, description of event at issue, other information required, your request, etc.).  If the fields exist it will alert office staff that certain information must be supplied and is not discretionary.  

The form(s) should also indicate on their face to whom they will be sent and via what method of delivery.  The contract or the contract documents will often list an owner’s representative or other authorized individual on whom notice must be served.  

That individual is frequently not the individual with whom you regularly communicate concerning project matters.  Nonetheless, for notice to be proper it should be served on the person specified.  You must also take care to ensure that notice is served in the proper manner.  

In the electronic age it is not uncommon for project communications to be via email, text message, or telephone.  However, most contracts require that notices be delivered in a more formal manner such as certified mail, UPS, or hand delivery.  

Still other contracts allow the property owner to deliver notice in a less formal fashion, such as email, while requiring the contractor to give notice in a formal manner, such as via certified mail.  

You should carefully study these requirements and place the method of delivery on the form so there is never any confusion.  A complete and timely notice served on the wrong person or via the wrong method can place the contractor squarely within the dire circumstances outlined above in the opening paragraphs.  

Outline Staff Notification Triggers [Don’t skip this step]

Careful review at the contracting stage, chart development, and form development will still not get the job done unless your field personnel know when to alert your office staff.  

Your project manager and/or superintendent should be provided a copy of the chart and be briefed on the importance of alerting office staff to any circumstances which may fall under the covered topics.  The chart and the mechanics of site and office staff communication should be simple enough that the information exchange does not become a daunting task which might then be skipped.  

Giving Notice and Maintaining Proof

Once notice is provided a copy of it should be maintained.  Keep a signed copy, not an unsigned one.  If the notice is sent via certified mail, retain the proof of mailing and attach it to the notice.  If the notice is sent via email, send it with a delivery or return receipt confirmation and save those electronic communications.  

Too often a contractor will do everything right except retain sufficient written proof that notice was actually sent. That can place the contractor the dire circumstances.   

By serving notice you are not “making a mountain out of a mole hill” and are not becoming litigious. You are demonstrating that you have read and are carefully following the contract.  

If a property owner ever tells you that you do not need to send notice, reply that you will gladly stop doing so if the property owner amends the contract to remove those pesky notice provisions.  More than likely the owner will decline to remove them.  

You and your staff invest considerable energy into building the perfect project while providing exceptional customer service.  Invest no less energy into learning and following the notice requirements in your contract.  It will keep you in the money.