What is a condition precedent and can I get out of one if I haven't submitted a notice?

Question

Tom Spilsted · Accepted Answer

In the context of claims by a contractor under a building contract, a condition precedent is a duty that the contractor must discharge before it is entitled to bring a claim. Standard form construction contracts usually have conditions as a pre-cursor to an entitlement to bring a claim. For instance, the JCT contract provides that a claim for an entitlement to an extension of time or claim for loss and expense as a result of a Relevant Event/Relevant Matter must be preceded by a notice (which should be given â€œforthwithâ€) which notifies the employer/CA that a Relevant Event/Relevant Matter has occurred. For NEC contracts, if contractors do not notify the Employer/Project Manager within 8 weeks of when a Compensation Event (an entitlement to an extension of time and/or loss and expense) arising then that the claim will be barred. For contractors, it is essential to comply with any conditions precedent. For employers, it is within your rights to insist on compliance with any conditions precedent.In JCT contracts, the contractor does have a way out if it fails to notify the employer/CA when a Relevant Event (entitlement to an extension of time) occurs. Clause 2.28.5.2 obliges (according to the Guide to the Standard Building Contract) the CA/Employer to review the contractorâ€™s entitlement to any extensions of time (explicitly regardless of whether or not the Relevant Event has been notified in accordance with the contract) within 12 weeks of PC occurring. This is an often overlooked term of the contract. Whilst it would not relieve a contractor who had not complied with its obligations to notify Relevant Events from the liability of liability from LADs at the time, it would be advisable for contractors to consider this clause at completion of the contract. For employers, it would be advisable to consider amending/deleting this clause 2.28.5 in order to ensure that the condition precedent to notify of Relevant Events during the Works carries some teeth through to the end of the Contract.It is an interesting quirk of the JCT that this obligation on employers/CAs exists in relation to time and not loss and expense. No such obligation exists on the Project Manager in NEC contracts.

What is a condition precedent and can I get out of one if I haven't submitted a notice?

Contract-notices

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Steve Hardy

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