Commonly, Time-bar clauses can be articulated as contractual clauses which are stating “that upon failure of one party to perform an event within a specified time period then that party loses certain right and benefits permitted under the contract”.[1]
Nowadays, Standard Form of Contracts (SFOCs) are tending to include Time-bar clauses which are theoretically overruling Contractor’s claims that might otherwise be legally recognisable.[2]
In addition, by referring to various literatures,[3] the Time-bars’ growth is evidenced in clause 20.1 of the “International Federation of Consulting Engineers Contract for Major Works 1998” (“FIDIC”),[4] and clause 61.3 of the “New Engineering and Construction Contract 2013” (“NEC3”). Both of those Time-bar clauses are expressing that the time under the Contracts should only be extended if the Contractor notifies the Employer within a strict timeframe.
Specifically, FIDIC’s sub-clause 20.1 expresses that; in the occasion where the Contractor is considering himself eligible for an “Extension of Time” (“EOT”), shall notify the “the Engineer” (“the Contract Administrator”) by identifying the origin of the delay. Also, the Contractor should serve such notice within 28 days of becoming aware for the delay. Conversely, this sub-clause clearly expresses that; if the Contractor breach its notice obligation, then the Project’s completion date shall not be extend and “…the Employer shall be discharged from all liability in connection with the claim”.[5]
On the other hand, by referring to NEC3’s Clause 60.1, “the Project Manager” (“the Contract Administrator”) shall be notified by the Contractor for any event expected to be a Compensation event. Likewise, this clause defines that; in the occasion where the Contract Administrator is not notified by the Contractor within 8 weeks of becoming aware of that event, the Contractor’s right to an EOT should be lost unless “…the Project Manager should have notified the event to the Contractor but did not”.[6]
Nonetheless, SFOCs are including provisions allowing the Parties to expressly agree an amount of money in the form of Liquidated Damages (LDs) which is basically the Contractor’s monetary liability to the Employer in the occasion of a contractual breach (e.g. Project Delays).[7] For instance, in the event where the Project delayed and the Contractor failed to gain an EOT, then the Employer should be in a position to deduct LDs from the Contractor’s final account as a way of contractual compensation for Contractor’s breach of contract.[8]
Referencing
[1] Andrew Burr, Delay and Disruption in Construction Contracts (5th edn, Routledge 2016) 1066
[2] Simon Tolson and Jeremy Glover, 'Time bars in construction contracts' [2008] 1(1) Time bars in construction and global claims <https://www.fenwickelliott.com/sites/default/files/Time%20bars%20in%20constructions%20contracts%20and%20global%20claims.pdf> accessed 31 March 2017
[3] Hamish Lal, ‘The rise and rise of time-bar clauses for contractors’ claims: issues for construction arbitrators’ [2007] SCL 142; & Chern Cyril, The Law of Construction Disputes (2nd edn, Routledge 2016) 325
[4] FIDIC Contracts, the Red Book; the Yellow Book; & the Silver Book
[5] ibid, sub-clause 20.1
[6] New Engineering and Construction Contract 2013 (NEC3), Clause 60.1
[7] Julian Bailey, Construction Law (1st edn, Routledge 2011) 1019
[8] Daniel Brawn, 'Extensions of time and liquidated damages in construction contracts in England and Wales' [2012] 4(1) International Journal of Law in the Built Environment <http://www.emeraldinsight.com/doi/full/10.1108/17561451211211750> accessed 31 March 2017