Craig Martin – April 1, 2014
Time and time again, courts rule that contractors must follow notice requirements in order to submit a claim for additional time or compensation. This blog looks at yet another example of a contractor that failed to follow the notice requirements and lost its demand for additional pay.
This case, JEM Contracting v. Morrison-Maierle, involved a highway project in Montana. The contract provided:
Contractor shall notify the Owner and Engineer in writing about differing subsurface or physical conditions within 5 days of discovery and before disturbing the subsurface. . . . No claims for an adjustment in the contract price or contract times will be valid for differing subsurface or physical conditions if procedures of this paragraph are not followed.
On the first day on the job, JEM Contracting encountered subsurface conditions that differed from those in the bidding documents. JEM discussed the differing site conditions with the engineer’s onsite representative. JEM claims the engineer said that additional compensation would be paid because of the site condition. Eighteen days later, and after disturbing the area, JEM provide written notice of the differing site conditions to the county and requested additional compensation.
The engineer denied JEM’s claim, finding that the claim was not supported and was out of time. The contractor submitted the claim to the county, which also rejected the claim. JEM sued the county and engineer. The trial court found in favor of the engineer and county, ruling that JEM failed to timely submit its claim for additional compensation.
This case is yet another example of the importance of knowing and understanding the notice requirements of your contract.
Take Away: You need to review each contract for the notice provisions and follow them if you want your claim paid.