My Consultant Just Says..... Issue A Notice!
I am sure that all of us in Contracting and Construction, have all been on a training course can relate or remember a point when the Consultant Says.... under Clause xyz123, of a NEC, FIDIC, JCT (or other bespoke agreement), blah, blah, blah.... "...you have an obligation to issue certain notices to your customer..."!
Recall a similar conversation...?
If not from training then surely at the time when the whole world has appeared to have been collapsing around our ears!!
Generally speaking notice provisions under modern day agreements can take many forms. The Notice(s) clauses are usually contained in the general provisions section of an agreement and will define
- The form of notice;
- how the notice(s) may be made; and
- when the notice is deemed to have been received.
In the main these clause(s) work in conjunction with other provisions of the agreement stating the circumstances when notice is required, such as a notice of changes a purchase agreement or receipt of claim or suit.
Standard agreements these days, tend to emphasise notice requirements giving the whole provision a unique name or use specific terminology to emphasise the process flow which the notice forms part of. One of the best examples of this is arguably the Engineering and Construction Contract (NEC), which when published introduced into its text, terms such as “…Early Warning Notice…”, “…Compensation Event Notice…”, which are now arguably synonymous in the Construction Industry.
So how practical are these provisions?
When considering this lets also not forget a very important notice (particularly in recognition of projects falling into the arms of the Construction Act), that is arguably associated with the life blood of pretty much every business… the “…Application for Payment…”!
Over the years we have experienced all sizes of projects, super-sized one off ones, where the main contractor, consultants, specialist subcontractors all reside in a comfortable office in the immediate vicinity of the working area, to those scattered projects that involve interaction on remote sites. Now issuing notices is arguably far easier to do when you are close to the sanctuary of the project office…. However, what happens when you are remote? Or, for that matter, are stuck in that traffic jam on the motorway?
Now, records, records, records… has been the order for the day for anyone involved in the B2B contracting and no-doubt we all have a tale of woe or two, where a projects financial success has hung in the balance due to records…. Or, lack of them! What we all need to remember is that it is all very good having provisions in an agreement that compel us to issue notices, if we cannot physically issue them. If these provisions cannot be achieved then we are at the mercy of the proverbial smart #&%$*…. and ultimately back to our cross our fingers risk mitigation strategy, or of course the good will and relationship alternative! The Contract saying NO can be as powerful as a refused entry because your name is simply not down on the guest list!
I am certain that technology will help all of us over time. New platforms/ software and hardware are making certain things easier all the time.... but question..... Why do sales still use carbonated pads!
What I am getting at here, is that contracts and in particular the administration of contracts, follows processes and it is this processes that can dictate the success or failure of a project. Failure to issue a notice can result in a situation where you do not get paid for otherwise legitimately entitled works. After all if the team receiving the notice do not prepare and plan future liabilities properly and diligently, or do not have the same transparency, then it may be simple.... they have no money!
If it is therefore so important, why do we see so many examples where the processes have been ignored or measures have not been taken to allow people to act no matter where they are.... even up a mountain. Think abut it.... have you and your business got an appropriate process to tackle this, can you really issue a contemporaneous or timely notice? Do you have to wait for your team to touch base before they can actually do paperwork? These notices after all could simply be managed by someone doing the task remotely through a call center type standard work process. Make a call, dictate.... Job Done... Every Time!