When entering into contracts with Employers as the main contractor or as subcontractors construction companies especially BEE construction companies must take note of the provisions of exculpation clauses which can have dire financial consequences for the contractor especially in instances where notwithstanding that the contractor has performed the work it will not be entitled to additional payment for the said work and extension of time.
These clauses provides in most cases that if the Contractor considers himself to be entitled to any extension of the time for Completion and/or any additional payment, under any Contract, the Contractor shall submit a notice to the Project Manager, describing the event or the circumstances giving rise to the claim. The Notice shall be given as soon as possible, and not later than 28 Days after the Contractor became aware of the event or circumstance. Failure to give notice of a claim within such a period of 28 days would result in the time for completion not being extended and the Contractor not being entitled to additional payment, and the Employer being discharged from all liability in connection with the claim.
Clauses of this nature are peremptory and demand that the obligation regarding the notice and the notice period must be met for the Contractor to be entitled to any extension of the time for Completion and/or any additional payment, under any contract,
As a prerequisite to any claim submitted by the Claimant to the Dispute Board, entitling it to extension of Time for Completion and or additional payment, the Claimant must prove and satisfy to the Dispute Board that its claims complies with the provisions of time bar clause by stating and providing evidence to the effect that the requisite notice was submitted to the Project Manager and not later than 28 days after the Contractor became aware of the event or circumstance.
The UK Courts took the view that timescales in construction contracts are directory rather than mandatory. The Court ruled that this is the case especially where the contract clause in question clearly states that the party with a claim will lose the right to bring that claim if it fails to comply with the required timescale. Courts have further held that a notice provision should be construed as a condition precedent, and so would be binding if it states the precise time within which the notice is to be served, and it makes plain by express language that unless the notice is served within that time the party making the claim will lose its rights under the clause.
The South African Constitutional Court in Barkhuizen v Napier held that time bars will be upheld, where the parties had freely entered into a contract containing a time bar and provided the notice period is a clear and reasonable duration. When the parties agreed to such time barring provisions, it would be difficult to successfully argue the contrary, resulting in no case law supporting time bar provisions not being upheld.