In this industry, you have to understand time bars.
It’s important to get notices and variations in on time. You also need to get change orders and time extensions in on time. If not you may be told your notice was rejected and therefore you could end up not being paid for work.
This happens ALL THE TIME.
Find out about a court case where time bars caused massive problems by watching this video or just continue with this quick read.
CMA Assets Pty Ltd vs John Holland Pty Ltd
The judge ruled that: “There is no doubt that the strict application of cl 10.12 and cl 10.13 is harsh. But I am not satisfied that it is without purpose and absurd so that an alternative construction must be given, notwithstanding apparently clear words.”
The Story
BHB project involves a huge mining company in Western Australia.
They engaged a big company, John Holland, to demolish a wharf. John Holland subcontracted to CMA Assets. The job of CMA assets was to demolish the concrete dolphins and whatever else was there.
They arrived on site with big vessels that are incredibly expensive. It’s not only the cost of the vessel but the crew and equipment on board.
When they got there they couldn’t access the site because John Holland had its own vessels there.
So CMA couldn’t start work and this was clearly not their fault.
On top of this, they were given the wrong specs regarding some of the things they had to demolish so it took a lot longer than expected.
Unfortunately, they didn’t submit their notices on time.
They went to court and ended up at the Supreme Court.
The judge held the decision and John Holland won the case.
They didn’t get paid and they got hit with liquidated damages.
CMA lost a lot of money.
This is not a unique case. This happens all the time.
Contractually you need to close the gap between delivering on-site and delivering contractually.
Our advice?
- Negotiate +5 days for time bars
- Have a system to easily track changes
- Submit notices of delays as “memos”
- Record all delays in a section in your weekly minutes
- Submit variations regularly
For more contractual advice, Quantum Contract Solutions is here to guide and assist you through everything contract related. Let’s reduce risk in your contracts and save time and money, just click this link to get our FREE case study to show you how clients just like you are doing it.
