Most written agreements include some form of notice provision. Notice is important because it allows one party to enforce a contractual right or it puts another party to the agreement on notice that they may enforce a specific right. It is part of the communication process that helps produce successful projects.
Construction contracts typically contain a number of obvious notice provisions. The American Institute of Architects’ AIA Document A201-2007 General Conditions of the Contract for Construction (AIA A201-2007) includes notice provisions, clauses requiring other forms of communication between parties and various requirements that can shift the risk from one party to another. However, not all provisions that require some form of notice are readily apparent.
In the February 2002 issue of BrickerConstructionLaw.com (then known as ohioconstructionlaw.com) Sam Wampler wrote about notice, when notice is required under the prior version of the AIA A201-2007 (the 1997 edition), and what happens when notice is not provided. The points outlined in the article apply even more today in light of court decisions like Dugan and Meyers, 2007-Ohio-1687.
Owners, contractors and architects would be well served to become intimately familiar with the notice provisions in the general conditions that may require some type of notice prior to signing a construction contract that incorporates the general conditions. This is even more important as the general conditions to most construction contracts are typically modified or supplemented with additional conditions typically not found in the base form of the general conditions.
Study the Terms of Your Contract
The time to become familiar with the notice provisions in the general conditions is before the contract incorporating those conditions is actually signed. Some of the notice provisions may be triggered when the contract is signed or shortly thereafter, and the failure to issue a notice or to respond to a notice provision can, in some cases, act as a waiver of rights.
Rule 17 of Bricker & Eckler’s 20 Rules for Public Owners’ Contracting Success recommends that Owners make sure their construction contracts include language requiring notice of any problem that would affect the project.
17 Ensure that your Contract Documents require a clear and detailed notice of any problem that would affect your budget, completion date or the quality of the Work.
Rule 16 of Bricker & Eckler’s 20 Rules for Public Owners’ Contracting Success recommends that Owners know what they are required to do and to be decisive and responsive.
16 Be decisive and responsive – understand what you are required to do and do it in a timely and competent manner.
Requiring a clear and detailed notice of a problem affords the recipient of the notice the opportunity to consider all of its options in mitigating the problem. One example is found in Section 15.1.2 of the A201-2007. Claims made by the owner or contractor must be submitted within 21 days of the event giving rise to the claim or within 21 days after the claimant first recognizes the condition giving rise to the claim. A contractor’s failure to timely notify the owner of a claim precludes the owner from investigating the claim while the condition causing the claim still exists or from exercising its other rights under the contract documents (i.e. termination for convenience).
Likewise, an owner’s failure to exercise the right to require the contractor to repair defective and nonconforming work under Section 184.108.40.206 of the A201-2007 serves as a waiver of the owner’s right to have the contractor to correct the defective work (the contractor, however, is still responsible for its other obligations under the Contract Documents pursuant to Section 12.2.5 of the A201-2007).
Train Your Team
Once the contract is signed, it’s time to immediately train your team how to use the general conditions and other contract documents. The owner’s representative, architect, superintendent and other key players must carefully review the contract documents to become familiar with the various notice provisions.
Rule 14 of Bricker & Eckler’s 20 Rules for Public Owners’ Contracting Success actually applies to all parties to a construction contract.
14 Train your Team in how to use your Contract Documents. Do not stop simply with good Contract Documents that will protect your interests. Your Team needs to know how to use them. Take the additional step and provide this training.
Training will help to eliminate mistakes and missed deadlines. The entire team will know what the documents say, when specific provisions come into play, and what must be done to protect your team’s interests if problems arise.
When is Notice Required Under the A201-2007?
The AIA A201-2007 contains numerous instances when notice or other communication is required. The following table summarizes the majority of these provisions in the A201-2007.
To view table click here.