A clause in a contract provided that "all claims under …this Contract must, in order to be considered valid, be notified to us in writing within 28 days of the appearance of any alleged defect….and shall in any event be deemed to be waived and absolutely barred unless so notified within one calendar year of the date of completion of the works".
On the facts, Edwards-Stuart J found that this clause had not been incorporated into a sub-contract. Although not required to do so, he also considered whether the clause would satisfy the test of reasonableness under the Unfair Contract Terms Act 1977 ("UCTA"). Under UCTA, where one party deals as consumer or is required to deal on the other's written standard terms of business, a contract term can only be relied upon if it is reasonable.
The judge first construed the clause as requiring written notification within 28 days and the one-year alternative was a long-stop. A party could not protect itself by automatically giving written notice at the end of one year: a claim would only be valid if a defect had appeared within the preceding 28 days. The judge highlighted that each time bar clause must be looked at in the context of its particular situation. On the facts of the case, he found that the clause was not reasonable. The test is what it is reasonable to expect, rather than what actually happens. In cases such as this one, it is rare for a defect to manifest itself within months and initial cracking might not be readily visible at first. Furthermore, the contractor will not be a user of the building and so will not be able to observe if cracking appears.