Recent Decision Demonstrates the Importance of Complying with Contract Notice Provisions
A common provision in construction contracts requires a contractor to give notice to the owner within a certain number of days of an event giving rise to a claim. Such provisions have a reasonable basis insofar as they ensure an owner will have a reasonable opportunity to investigate the conditions for which a claim for additional compensation is being made. Traditionally, such notice provisions were not strictly enforced. The general approach seemed to be that — provided the owner was not prejudiced by any delay in giving notice of claim — a claim that was not submitted within the specified time limit would not be barred. The more recent trend, however, has been to more strictly construe such provisions.
In J. Wm. Foley, Inc. v. United Illuminating, the Appellate Court held that the contractor’s failure to submit its delay claim within the ten-day time limit specified by the contract was a bar to the claim. This decision is potentially troublesome for a couple of reasons: First, there is no reference to the owner suffering any prejudice as a result of the delay. Second, the decision indicated that the submission of the delay claim required a critical path analysis of the delay.
Without there being any prejudice to the owner, ten days is a very short time frame to enforce. The contractor may not have had adequate time to give notice. That is especially true if the proper interpretation of the provision required a delay analysis to be submitted as part of the notice of claim, as the trial court apparently decided. Ten days is certainly not a sufficient amount of time to provide that kind of information.
The court stated that the claim required the court “to construe the meaning of the contract.” J. Wm. Foley, Inc. v. United Illuminating Co., 158 Conn. App. 27, 41–43, 118 A.3d 573, 583 (2015). The court then went on to explain the general rules of contractor interpretation in which “[t]he contract must be viewed in its entirety, with each provision read in light of the other provisions … and every provision must be given effect if it is possible to do so.” Id. The court then decided that “reading the contract provisions as a whole and in light of each other … unambiguously demonstrate[d] that critical path delay claims [were] subject to the ten day rule … [and that the] untimely claim for delay damages [was] irrevocably waived and released.” Id.
The only saving grace here is that the delay analysis was not submitted until three-and-a-half years after the subject project’s completion. Thus, the court may have been sending a message that the delayed submission was unreasonable. Nonetheless, this decision teaches that short time periods to provide notice of claim should be avoided and, if they cannot be avoided, then they must be complied with if possible. However, if they cannot be complied with, then submission of the claim should be made as soon as practicable.
If you should have any questions regarding submission of a delay claim, please give me a call.