When is Actual Notice of Extra Work Not Considered Notice?
An upstate appellate court holds that even actual notice, conceded by the owner, does not necessarily satisfy the notice provisions of a construction contract and dismisses a contractor’s extra work claims.
Construction contracts are packed with notice requirements: notice of conditions causing delay; notice of extra work; notice for extensions of time; etc. As the notice provisions proliferate, and timing requirements shrink (notice by certified mail within 24 hours!), contractors struggle to stay in compliance lest their valid claims get dismissed on a technicality.
The pitfalls are many. But in a recent case, a contractor thought it was in good shape—the owner conceded that it had received notice that the contractor was performing extra work. The Appellate Division, Third Department nevertheless held that the contractor did not comply with the letter of the contract in furnishing notice of the extra work and its claim was dismissed, despite the owner’s concession.
In Ridley Electric Co. v. Dormitory Authority, the contractor contended that the direction by the Authority that it perform electrical work in ceiling spaces tighter than shown on the plans resulted in extra work for the contractor as well as additional cost. The contractor argued that the combination of the Authority ordering it to do the work, observing the performance of the work, and even offering to pay a portion of the extra cost, constituted actual notice to the Authority. Affidavits by employees of the Authority conceded they had actual notice. However, the contractor never “filed a written notice within 15 days after being ordered to perform the work” or submitted “documentation of the anticipated cost of the extra work within 30 days” as required by its contract. It did not make a formal claim until long after substantial completion.
The court held that “despite [the Authority’s] conceded knowledge of the ceiling space issue, actual notice does not suffice to excuse lack of compliance with a strict contractual notice requirement such as at issue here.” Nor could the Authority’s “willingness to compensate [contractor] for a limited amount of extra work be construed … to waive reliance upon the contract’s notice and reporting requirements.”
It’s a tough world out there.
Contact GDB Construction Law attorney Randy J. Heller, Esq. for more information.