Ways round condition precedent notices.
I’ve been involved in adjudication since its inception, at the start both preparing adjudication Referrals and Responses and latterly acting as an Adjudicator. Below are some of my thoughts on adjudication.
A recent case of Tata Consultancy Services Limited v Disclosure and Barring Services [2024]gives potential guidance on what to do if you’ve failed to give the correct contractual notices under a contract.
By way of background, as we are all aware, a lot of construction contracts provide that an contractor’s entitlement to an extension of time and / or recovery of loss & expense is conditional upon the service of a notice within a stipulated time. These notice provisions are sometimes referred to as ‘time-bars’, and the courts in England will generally enforce them as a condition precedent, or in plain English: if you fail to serve the required notice, you aint getting anything.
However, the above case was interesting as it answered the question of whether the parties waived the condition precedent by their conduct during the works and retained their entitlement even if they did not serve the correct notice under the contract.
Under the parties contract Tata were required to notify DBS a’ as soon as reasonably practicable’ after becoming aware of any delay or potential delay. Tata also had to submit a ‘draft exception report’ within 5 days of a notice detailing reasons for the delay etc.
In return DBS was also required to issue promptly a ‘Non-conformance Report’ of a contract milestone was not reached, it would then have the option to deduct L&AD’s.
The court had to decide whether the parties lost their entitlement as neither served the required notices. Tata argued that estoppel by conduct applied to get past its failure to serve the required notices. In summary, the court found that the condition precedent was ‘not a live point’ as both parties worked on the basis the the requirement to provide notices had ‘fallen away’. And as a result DBS was estopped from relying on its condition precedent defence of Tata’s claims and Tata did not lose its entitlement – despite not providing the required contract notice.
So, if you are in a contract that has condition precedent notices and you have failed to issue them al all or on time, there is a possibility that you can use the estoppel by conduct argument to defeat the other sides arguments.
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