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The Law And Your Business- The Importance Of The Notice Requirements In A Contract

The Law and Your Business- The Importance of the Notice Requirements in a Contract

The Notice, Defect Assessment and Right to Cure provisions contained in many construction contracts contain important language that is critical to understand and follow whether you are a prime contractor or a subcontractor. In Underwater Engineering Services v. Utility Board, decided in May, 2016, the Court was faced with a situation where the Contractor failed to provide the Utility Board of Key West with the proper notice prior to repair of concrete poles.  The unit price contract estimated 200 square feet of MIS4 coating to be installed with the usual caveat that it was only an estimate of quantities for the purpose of evaluating bids. Without providing prior notice or a request to inspect, as was required in the contract, the Contractor installed 5,006 square feet of MIS4. There was a failure of the coating and litigation resulted. The contractor maintained that reference to the work in the three week look-ahead schedule was sufficient notice for the Owner to perform any inspection, though no specific written notice was provided or requested. The Court rejected that assertion. In that the Contractor failed to obtain the post preparation pre-coating inspection by the Owner, it was not entitled to recover the $528,660 in extra costs. Additionally the Contractor was never notified that eight collars were defective and was not given the opportunity to cure the defect as specified in the contact. As a result of this notice failure, the Appellate Court reversed a judgment in favor of the Owner, due to the Owner’s failure to comply with the Notice of Defect and opportunity to Cure provision in the contract.

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