Features of construction contract agreement

notice provision of construction contract agreement

Aims of construction contract agreement

In a construction contract, both parties (Clients & Contractors) are bound by explicit and implied terms that outline their obligations and actions to prevent breach of contract. The challenge arises when one party, such as the client, needs to adhere to a specific contract term triggered by an event but has not been informed by the other party, the contractor, about the event. This raises the need for timely communication, acknowledgment, or response to prevent disputes.

Construction contracts aim to manage the complexity of modern projects, where disputes related to delay and cost are common. When a disruptive event occurs, the affected party must promptly examine the situation and respond adequately to mitigate potential risks/problems. This is important because timely notice and action can prevent adverse consequences. Notice provisions are often misunderstood – seen as obstacles by contractors and tools of denial by the clients – but they are crucial in protecting all parties’ interests and facilitating claim resolutions.

Provisions of notice in construction contracts enable parties to assess their positions and financial impacts when triggered. Clients might approve changes or variations, or reduce exposure if the claim is valid. Contractors, by complying with notice provisions, can safeguard their rights and challenge claims effectively. Standard construction contracts like FIDIC use diverse language to describe notice provisions, adapted to specific contexts. Nevertheless, the fundamental principle remains consistent: a party must inform the other party about impact events, their effects, and associated time and cost information in a timely manner.

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