Sub alleged that general could no longer make a claim against sub because it had not met the conditions of the contract as to notice. The subcontract stated that the contractor waived and released the sub from all claims except (a) those made in writing before the date of the final certificate for payment and still unsettled. This type of clause is similar to an owner waiving claims against a general pursuant to GC 12.2.3 of CCDC2. The general had given a very detailed letter to the sub within the appropriate time period noting that the sub had caused significant delays to the project, that the owner had assessed liquidated damages, and that the general was assessing the financial impact of the delays and intended to recover the costs from the sub. The arbitrator acknowledged that the letter met the criteria necessary for written notice (i.e. goes beyond mere grumblings, give some particulars as to the complaint, and is timely), but was merely an intention to make a claim rather than making a claim. The judge held that this distinction was improper and that the letter was sufficient to meet the conditions of the contract.
Note: This decision has been overturned. Our summary of the decision rendered by the Court of Appeal can be found HERE.
Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.