IT IS EASY to miss the requirement to serve notice in the specific manner set out in a contract. Yet it remains crucial and the courts continue to find against those serving a defective notice.
In the case of GPP Big Field LLP & Anor v Solar EPC Solutions SL (2018) the court considered a claim for damages and in doing so highlighted the consequences of failing to give notice in the prescribed way.
Prosalia UK Ltd was engaged by GPP to construct solar power generation plants across the UK. Prosalia fell into insolvency and the contracts were assigned to its guarantor, Solar EPC Solutions. GPP brought a claim against Solar for the delay in the power generation plants being commissioned in accordance with the timescales set out in the contracts.
Notice served correctly
There were in fact five contracts which had to be assigned and in relation to one of those contracts, Solar raised an argument that objections from local residents amounted to a “force majeure” event resulting in Prosalia being entitled to an extension of the time to commission the generation plant. One might say they were clutching at straws.
The contract specified that the party seeking to argue a force majeure event was required to give notice to the other party.
The court held that because the contract contained specific notice requirements, notice of a force majeure event had to comply with these. Unfortunately Prosalia’s notice had not complied.
Always make sure you are aware of the contract terms
It is important to check:
- Does your contract require notice to be given in a particular form? Make sure you follow it.
- Are there any specific time-scales to follow? If so, these are also key to a compliant notice.
- If none of the above, “reasonable” notice should be given. This can depend upon the length of your business relationship, the size of the contract investment to both parties and the importance of the contract to the other party’s business. Seek advice if unsure.
Ensure that everyone concerned with the contract and any project management are fully aware of the contract terms and refer back to them. Failing to comply could result in a claim for breach of contract or a failure to pursue a claim conditional upon the service of a valid notice.
If you have a dispute, contact Sarah Canning, Partner and Head of Dispute Resolution, on 01604 828282 or email sarah.canning@franklins-sols.co.uk
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