In this blog, we review the importance of the accurate compilation and issuance of notices in accordance with the contractual provisions.
The courts have previously delivered varying rulings in respect of the degree of compliance required for validly notifying under the contract.
It is always advisable to keep matters strictly in accordance with the contract and that provides the basis for this blog.
How to send a notice
Firstly, all notices must be in writing.
The contracting parties can mutually agree on which format and method the notices are to be served under the contract and once agreed this should be expressly stated within the contract.
This will then become the contractual basis as to how the relevant notices should be served.
With that in mind, a key consideration when reviewing any potential contract is how the contract prescribes the delivery of notices. If, for example, a party is required to serve each notice by First-Class Recorded Delivery to a stipulated address, marked ‘Private and Confidential’ for the attention of the Company Secretary, is this an acceptable method of delivery? Perhaps not. The key point here is that if the parties intend to serve notices electronically for efficiency, ensure the contract states this.
Certain contract forms, including the JCT Design & Build 2016 provide that all notices are to be delivered in person or posted using Recorded Signed for or Special Delivery.
Email notifications have become a more accepted method of delivery since it became mandatory to work from home during the pandemic.
Who and where to send a notice to?
Any notices that are issued via hand delivery or sent via the postal deliveries mentioned, should be sent to the address for notifications as specified within the Contract Particulars.
All notices need to be clearly addressed to the contracted parties involved and where the contract documents state, addressed to a person specifically.
Where email is an acceptable method of delivery the relevant email address should be agreed and expressly stated within the contract.
It is always advisable to use the ‘read receipt’ function when sending notices – this function allows a party to demonstrate the recipients have received the said notice, however, this does not affect whether the notice has been served.
Serving the notices to all addresses given, by all methods mentioned, will limit the chances of any recipients claiming not to receive the notice or the non-compliance of a notice.
When will the notice be received (or deemed received?)
There are time frames in which certain notices need to be received. Therefore, when sending payment and termination notices for example, the relevant time frame for serving should be critically observed.
This should also be evidenced (i.e., Royal Mail certification of posting).
Generally, when notices are posted, it is often deemed to be received on the second “business day” after being posted unless otherwise stated – again, review the contract for the exact relevant provisions.
If notices are delivered personally, the date on which the notice was delivered will be the date it was deemed to be served.
Other notices, if posted by Recorded Signed for or Special Delivery will be deemed to have been delivered when it would ordinally be delivered (providing it can be demonstrated they have).
For this reason, it is often a preferred method to send payment and payless notices via email or personal delivery as the sender has more control over the exact date and time in which the notice was delivered.
Interim payment notices
Parties must adhere to the contractual requirements of the timing and form of notices when it comes to interim payments. These vary from contract to contract and therefore, again, it is important to know your contract.
Payment and Payless notices
As the industry is aware, the serving of Payment and Payless Notices and the timing thereof is critical as the failure to do so forms the foundation of many crystalised disputes (often referred to as ‘Smash and Grab’ disputes).
The most critical element for payment and payless notices is that they are served on time, in the correct form and including all necessary information (calculations etc.). If a contracting party does not adhere to the contractual (implied or expressly stated) requirements in this regard, payment of the amount stated as due in the Contractor’s Interim Payment Application could be validly claimed as the ‘Notified Sum’.
In respect of assessing the number of days, it is necessary to consider if it is calendar days (i.e., including weekends) or business/working days (excluding weekends).
Further, contracts generally seek to exclude any public holiday (including Christmas Day, Good Friday, and bank holidays) when counting the days.
Timing, content, and delivery of termination notices are critical, and it is advisable to obtain expert legal advice prior to the issuance of any such notice.
Generally, whilst requirements and obligations vary from contract to contract, in order to terminate a contract for breach or default, generally, two notices need to be served.
The first notice specifies the default and any required remedial action and within what period (often 7 or 14 days).
If the default continues beyond the duration stipulated within the first notice, an offended party may be able to terminate the offending party by the issuance of a second notice; again, the express contract provisions will set out the circumstances and requirements which apply.
It is critical to note that the termination of the contract will not be effective if the notices are sent incorrectly.
For ‘termination at will’ provisions, the requirement for two notices may not apply. Again, the health warning here is to know your contract and obtain the relevant legal advice to ensure the procedure is correctly executed.
Contractual notice provisions play a crucial part within the contract and should not be overlooked.
All parties should be aware of the agreements that have been made and the contractual provisions in respect of the same.
Compliance with the contractual provisions is critical and obtaining the relevant expert advice before acting is always advised.
Please note. The information provided on this website is NOT LEGAL ADVICE and is for information purposes only. No action or inaction should be taken due to this information, or any reliance placed upon this information. Please note where legal advice is required this should be obtained by an appropriate qualified legal practice and no information provided within this website should form the basis of any legal, contract or commercial decision. K J Taylor Consulting Ltd. are commercial quantity surveyors and not construction legal advisors.