Project owners, public and private, favor prompt notification requirements for claims. This provides them with a tactical advantage. Contractors must give written notice of a specific claim quickly after the claim arises, or the claim is barred as untimely. The contractor loses all its claim rights. However, this device also poses problems for project owners.
A recent appellate court opinion criticized these quick-claim mandates. Depending on how the claim notice requirement is structured, the contractor may be forced to give notice while negotiations of the matter are still underway. Transforming fruitful negotiation into a costly, adversarial contest may not benefit either party.
The second case in this issue involves a contractor’s reliance on owner-furnished, as-built drawings. The contract said the drawings were approximate, not for construction purposes, and were provided merely as a courtesy. Did the owner effectively shift the risk of undisclosed site conditions to the contractor?
