Construction projects are known for their evolving nature and complex dynamics. Modern construction contracts have incorporated different mechanisms to safeguard Contractors and Owners and protect their interests and rights when issues arise, such as early warning notices and time bars. But what is a time bar?
Time bar clauses are contract provisions that set specific timelines for one party to notify the other concerning specific contractual issues or potential disputes, such as a variation claim or an extension of time claim.
In this article, we will explore it further, as well as its importance, enforceability, and other relevant topics, such as conditions and precedents for a claim – keep reading.
A time bar clause is a contractual mechanism that dictates the timeframes within which a party must submit a claim or give notice to be entitled to any relief – i.e. cost and time – related to issues around a construction contract.
Albeit there is a general understanding that applying them might be too harsh, especially when dealing with on small contractors, there have been some cases in which claimants have been barred from proceeding with their claims, such as:
These clauses were initially designed to ensure that contractual issues were prematurely dealt with and instigate early risk management. However, their use has evolved, and Principals have frequently leveraged these mechanisms to “ring-fence” their commercial exposure, which has caused heated discussions around its enforceability.
The enforceability of a time bar clause will depend on the law governing the construction contract and the terms of the agreement .
For example, the legal aspects within common law (i.e. US, UK, Australia, Singapore) may drastically vary from the approach taken into civil law (i.e. UAE, Oman, France, Germany, Spain, Portugal, Brazil).
This interesting study published by EL NEMR (2017) from the School of Built Environment of the University of Salford (UK) details a comprehensive comparative analysis of time bar enforceability between the Egyptian Civil Code and the English Law.
As already in the previous, there have been many precedents where court rulings have barred claimants from proceeding with their claims and considering these time restrictions as a condition precedent.
On the other hand, there have also been cases in which courts have found timelines set in the agreement as directive only and considered terms unfair.
Ultimately, failure to adhere to time bar clauses might significantly decrease the chances of a claimant’s success in seeking relief through pre-established contract mechanisms.