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ConstructionPro Week, Volume: 5 - Issue: 40 - 10/14/2016

When Is a Notice-of-Claim Requirement Not Enforced?

By Bruce Jervis

 

It is common for construction contracts, particularly public works contracts, to require written notice of any claim for changed or extra work. The notice must be submitted within a stipulated number of days of the event giving rise to the claim and must itemize the increased costs the contractor expects to incur. Failure to give proper timely notice constitutes a waiver of the claim.

 

These notice-of-claim provisions are generally enforceable against contractors unless the project owner, through its conduct or otherwise, has waived the requirement. There are limitations, however. The contractual notice requirement applies only to work defined within the four corners of the contract.

 

An example is found in a recent case from the state of Washington. The contract was silent regarding the contractor’s methods or sequencing of the work. The owner issued a directive altering the contractor’s planned sequence of work, a plan relied on when bidding the contract. The contractor was entitled to pursue a claim for its increased costs despite noncompliance with the notice-of-claim procedure.

 

This is a fine line. Work defined within the contract necessarily includes matters reasonably inferable from the express terms of the contract. Yet, if the contract is silent regarding a fundamental issue – such as the sequencing of the work – shouldn’t such matters be exempt from the contractual notice-of-claim requirement? Your comments are welcomed.

 

Featured …

·         Notice-of-Claim Requirement Did Not Apply to Sequence Directive

·         Challenge to Unsatisfactory Performance Report Is a “Claim”

 

COMMENTS

On federal construction projects, although there are claim notice requirements,they are not enforced as strictly as they are on other public projects and private projects. If the government agency in questions has actual knowledge of the facts giving rise to the claim and is not prejudiced by the lack of a formal written notice, the lack of such notice may be excused. In Virginia, the Virginia Supreme Court has held that the failure to comply with the statutory notice requirement for claims against the state may not be waived and is a condition precedent to the right to assert a claim against the state. Even on other projects in Virginia, the courts will strictly enforce claim notice requirements and actual knowledge of the claim will not excuse the lack of compliance with a notice provision, although a few courts have found a waiver where an owner had consistently acted on claims without enforcing a notice requirement.
Posted by: Jack Rephan - Friday, October 14, 2016 12:40 PM


Jack, thanks for this excellent comment--spot on. Pennsylvania law is similar, but there are lines of cases running in both directions--perhaps not a clear as in Virginia. Any MD attorneys out there to bridge the geographical gap?
Posted by: Michael Peters - Friday, October 14, 2016 3:59 PM










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