Simply put, it is a clause in a contract which generally provides that if you fail to act within a stipulated time period, any entitlement which you may have in terms of a contract, is forfeited and the benefit cannot be claimed.
Don’t bring out the tissues just yet…
Let’s take a brief look at one of the time barring provisions found in the JBCC N/S Subcontract Edition 6.2 2018 (JBCC N/S Subcontract) and understand the contract management procedure that must be followed in order to make sure this never happens to you!!
We recently advised one of our clients who was busy with its subcontract works and was on time with its programme. They received a call that certain materials which had been ordered on time from an international supplier had been stolen from the harbour and despite calling everyone that it possibly could, in an attempt to secure replacement material – no one in the country had the material. As a result, they had to place a new order with an additional lead time of two months.
Before answering that question, let’s look at some of the entitlements and the circumstances giving rise to those entitlements.
Entitlement: Revision to the date of interim completion without an adjustment to the subcontract value – time but no money.
- Adverse weather conditions
- Inability to obtain materials and goods, where the subcontractor has taken reasonable steps to avoid or reduce delay
- Force Majeure
Entitlement: Revision to the date of interim completion with an adjustment to the subcontract value by the principal agent – time and money.
- Delayed access to the subcontract works
- Contractor’s instructions not occasioned by the subcontractor’s default
- Suspension of the subcontract works
Entitlement: Revision to the date of interim completion with adjustment to the subcontract value by the principal agent – time and money.
Any further circumstances causing a delay to interim completion, which is:
- beyond the reasonable control of the subcontractor;
- could not have reasonably been anticipated and;
- could not have reasonably provided for (i.e. avoided).
The principal agent must adjust the subcontract value where such delay is due to either the contractor, the employer or the principal agent and / or agents.
Note that not all the circumstances have been listed, please consult the relevant sections of the JBCC N/S Subcontract agreement.
Let us go back to our earlier question and again ask, what should our client do in the circumstances?
Critically, however, what steps must you take if you wish to claim for an entitlement?
- Take all reasonable steps to avoid or reduce such delay (mitigate your damages);
- Within 15 working days “of becoming aware or ought to have reasonably become aware of such delay“, give notice of your intention to request a revision of the date for interim completion, failing which, the subcontractor shall forfeit such claim. (This is the dreaded time bar provision.)
- Submit a fully substantiated claim for the revision to the interim completion date within 20 working days (or an allowed extended period) from the date when you can quantify the delay in terms of the subcontract programme. Contrary to popular belief, whilst this seems to be a time bar, elsewhere in the contract, time bars are given in unequivocal terms – ‘failing which the subcontractor shall forfeit such a claim’, and for this reason we do not consider this period to be a time barring provision.
Helpful Tip – If you are unable to submit within the 20 day period, because you cannot yet quantify or substantiate your claim, write to the contractor and record your reason for not submitting within the time period. This must be repeated until you can quantify or substantiate your claim.
Click on the buttons below to download template guidelines:
What must the contractor do in these circumstances?
Having submitted a fully substantiated claim the contractor must, within 25 working days:
- Either fully grant, grant a reduced figure or reject the claim for an extension of time
- In the event of the extension being granted (in part or full), the contractor must determine a revised date for interim completion
- Identify each and every event and the reference clause for each revision granted or amended
- Give reasons where a claim is either refused or reduced.
But what happens when the contractor sits on its hands and fails to act within the specified time periods?
- The claim, rather unfortunately, becomes deemed to be refused and you become entitled to serve a notice of disagreement.
- Where the disagreement is not resolved within the stipulated time period, you need to invoke the dispute resolution mechanisms being invoked.
The take home message?
Ensure that you comply with the time periods prescribed within the agreement, otherwise you may just find yourself in a situation where you cannot claim something that you are entitled to claim.