Like it or not, the contract constitutes the law between the parties that contract. It sets out the rights and obligations between the parties. If one party does not follow the terms in the contract, especially in situations involving the termination of the contract, changes to the scope, correction of deficiencies, or dispute resolution, that party may find it is unable to make a claim against the other party.
In a recent case, Urban Mechanical v. University of Western Ontario, 2018 ONSC 1888, a subcontractor failed to deliver a "notice of dispute" under the subcontract relating to a decision made by the contractor. The subcontract provided that the subcontractor was deemed to accept a decision of the general contractor and to have waived and released the general contractor from any claims in respect of that decision unless, within seven working days after receipt of the general contractor's decision, the subcontractor sent the contractor a notice of dispute in writing.
In this case, the general contractor required the mechanical subcontractor to change the type of pipes it intended to use in the mechanical system. The subcontractor felt it was a change in the scope of work and the general contractor believed it was within the owner's specifications. The subcontractor performed the work and submitted an invoice for extras to the general contractor. The general contractor by email rejected the invoice. Since the subcontractor failed to deliver a written notice of dispute within 7 days following that rejection, it was prohibited from claiming for the additional labour.
A contract will generally set out the time period within which notice should be given, the particulars to be set out in the notice, and the method of delivery and to whom. The importance of complying with any notice provisions in a contract cannot be over stressed as it could make an easy end to any claim, including legitimate claims, of a party to a contract.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
