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Did you notice that we changed Notice?

Did you notice that we changed Notice?

The importance of Notice in a contractual relationship cannot be overstated.


By Arlen Solochek, FAIA | December 11, 2018

Courtsey Pixabay

Since the AIA published the first edition of the General Conditions of the Contract in 1911, a provision for written notice has always been included. In the second edition, published in 1915, the defined term "Written Notice" was added:

“(f) Written notice shall be deemed to have been duly served if delivered in person to the individual or to a member of the firm or to an officer of the corporation for whom it is intended, or if delivered at or mailed to the last business address known to him who gives the notice.” See Article 1 of The Standard Documents of the American Institute of Architects”, Second Edition, 1915

This hundred-year-old definition contained nearly all of the Notice elements that are still present in A201™-2017 General Conditions for the Contract for Construction. To adapt to an ever-increasing reliance on digital forms of communications, and to clarify certain areas of confusion, the definition of Written Notice required adjustment in the updated 2017 edition.

 

The importance of Notice

Before we look at the changes to notice that AIA made in 2017, let’s discuss what notice is and why it’s important. Notice is a formal announcement to another party. Notice often is associated with a timing function, either starting a clock (where a contractor or owner must do something within “X” Days of the notice, such as in § 3.7.4 Concealed or Unknown Conditions) or stopping a clock by setting a time limit (where a notice must be given or received within “X” days of some occurrence, such as §2.5 Owner’s Right to Carry Out the Work). Absent specific requirements otherwise, notice may be achieved verbally or in writing. Because, however, verbal notice is unclear and undocumented, providing notice in writing is often preferable especially in a contractual setting.

To avoid the loss of rights under the contract, a party should strictly comply with the requirements of a required notice. In some circumstances, a party may be forgiven by the judge or arbitrator for failing to strictly comply with a contractual notice requirement but don’t bet on this rescue. Failure to strictly comply with a notice requirements more often than not results in the loss of right, action or recovery.

 

Key changes to the A201-2017

The AIA did not invent anything new in terms of notice, but rather it tried to eliminate and clarify areas of confusion and inconsistency.   In reviewing A201-2007, it became clear that the word notice was used in a number of variations - “give notice,” “written notice,” “notices,” “provide notice,” “notify,” “notify in writing.,” etc. Each use, however, was generally intended to accomplish the same thing.  Further, comments from document users indicated that the different variations created confusion.

In A201-2017, to avoid confusion, only the term “Notice” is used throughout the document and the definition of “Notice” was moved to Article 1 with other defined terms in the document. Additionally, the new definition modernizes the mode in which some notices may be given. Further, A201-2017 now distinguishes the nature of notice to be provided in general as opposed to in the case of Notice of Claims:

§ 1.6 Notice

§ 1.6.1 Except as otherwise provided in Section 1.6.2, where the Contract Documents require one party to notify or give notice to the other party, such notice shall be provided in writing to the designated representative of the party to whom the notice is addressed and shall be deemed to have been duly served if delivered in person, by mail, by courier, or by electronic transmission if a method for electronic transmission is set forth in the Agreement.

§ 1.6.2 Notice of Claims as provided in Section 15.1.3 shall be provided in writing and shall be deemed to have been duly served only if delivered to the designated representative of the party to whom the notice is addressed by certified or registered mail, or by courier providing proof of delivery.

Both types of Notice are required to be in writing, provided to a designated or authorized representative, and made in certain the allowable methods for sending the written notice.

One important change is that all required notices must be in writing. This makes good legal and practical sense to assure evidence of sending and receipt, as well as assuring that the required content of the notice has been met.   Another important change is to more accurately reflect contemporary business practice and allow notice to be achieved by electronic transmission (email is a common example) “…if a method for electronic transmission is set forth in the Agreement.” The convenience of electronically transmitted notices is not automatically available in the A201, but currently must be agreed upon through the AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit.

A201-2017 also distinguishes Notice of Claims from the more general instances of a required notice. The AIA felt that for Claims, which are disputes between the two parties, notice should require formal proof of receipt by the other party. Why? Receipt of a Notice of Claims starts a required string of other actions, often related to time limits. To eliminate debate about when the clock starts, verified receipt of the notice becomes the starting point. Second, both parties tend to fight formal claims the hardest and proof of both knowledge of a situation and receipt of a notice is critical. Even common day emails sometimes hit the spam file, or a regular letter gets lost. Many times, a legal written notice (“Hey, I really mean business here!”) does wonders in bringing awareness to another party, leading to a resolution. Additionally, notice of a construction claim allows the other party to: (1) consider the implications and potential liability; (2) determine whether the claimed item is an addition to the original contract; (3) organize documents related to the claim; and (4) amend the contract, if necessary, while facts are fresh.

AIA made another change in notice relating to the role of the Initial Decision Maker where a Claim arose after project completion. Because the IDM is typically no longer on the project after the project is completed, the AIA did not intend in the 2007 edition for the IDM be involved in Claims between the parties that arose after project completion, however, Section 15.1.2 suggested that the parties still had to provide notice of claims to the IDM. The 2017 language now clarifies that such notice to the IDM is not necessary. Notice for Claims arising after project completion can be made with Notice directly to the other party alone.

 

Take notice. Be noticed.  Give Notice.

The importance of Notice in a contractual relationship cannot be overstated. The failure to comply with notice requirements, appropriately so, can be quite punitive. Any misstep in meeting the written notice requirement can result in a forfeiture of rights under the contract. Accordingly, all AIA contract users should pay careful attention to the revisions in the A201 notice provisions so as to avoid running afoul to their requirements.

 

Arlen is the Associate Vice Chancellor for Capital Planning at Maricopa Community College District in Phoenix, Arizona.  He has served on the AIA Documents Committee for ten years and was chair of the Task Group that spent 3½ years updating the A201-2017.

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