Time-bar clauses in construction contracts

Time-bar clauses have been firmly established in the standard forms of contracts used in the construction industry in South Africa. These clauses impose a time period within which a party is required to provide notice to the other party regarding a dispute, and in construction contracts in particular, notice of a claim by the contractor. Where notice for a claim is not provided in accordance with the stipulated time period, the employer may use this as a complete defence to such claim.

In South Africa, our court held that such clauses will be upheld where the notice period is clear and reasonable.[1] The consequences for failure to adhere to the time-bar clauses can be severe. Where a contractor has failed to claim for an extension of time in accordance with the time bar clauses, he may not be granted an extension of time and furthermore he will not be granted the costs associated with such delay should he have been entitled to same.  This discretion remains with the employer.

If a contractor is delayed due the actions of the employer or his/her agent and the contractor fails to submit notice of a claim timeously, this will have the result that not only will he have no recourse to claim compensation for time and money lost, but he may also find himself in a position where penalties are deducted for late completion in respect of such delays.

In jurisdictions such as English Law, they rely on a long established doctrine called the Prevention Principle to protect the contractor from being exposed to delay damages for delays caused by the employer.  It is important to note that this doctrine does not apply in South African law.

The relevant clauses in the standard form contracts are as follows: –

FIDIC 1999 Red, Yellow and Silver Books: –

Clause 20.1: – “If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance.”

“If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim.”

NEC3: –

Clause 61.3: – “If the Contractor does not notify a compensation event within eight weeks of becoming aware of the event, he is not entitled to a change in the Prices, the Completion Date or a Key Date unless the Project Manager should have notified the event to the Contractor but did not.”

JBCC 2014

The contractor shall:-

Clause 23.4.2: – “Within twenty (20) working days of becoming aware, or ought reasonably to have become aware of such delay, give notice to the principle agent of the intention to submit a claim for a revision to the date of practical completion, failing which the contractor shall forfeit such a claim.”

Clause 26.5: – “Within twenty (20) working days of becoming aware, or ought to reasonably have become aware of such expense and loss for which provision was not required in the contract sum failing which such claim shall be forfeited.”

GCC 2010 and 2015: –

Clause 10.1.4 :- “If, in respect of any claim to which this Clause refers, the Contractor Contractor’s fails to comply with the 28 day notice period in Clause 10.1.1, as read failure to with Clause 10.1.2, or does not deliver his final claim within 28 days comply with after the end of the events or circumstances, the Due Completion Date notice period shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged of all liability in connection with the claim.”

It is important for the parties to be aware of these clauses and the relevant time periods for the filing of claims. It must also be borne in mind that these time frames are often the subject of amendment and contractors must be careful to read the contract data or special conditions amending the standard form of contract.

Nupen Staude de Vries Inc specialize in the vetting of construction contracts prior to signature as well as providing commercial management of the contract when in force. [1] Barkhuizen v Napier 2007 (7) BCLR 691 (CC)