Pay attention to the notices clause

Notices clauses, those setting out how contracting parties must serve notices, and when they are deemed received, are often overlooked in the heat of negotiations. A recent case serves as a useful reminder to understand and comply with contractual notice requirements. Although GPP Big Field LLP & Anor v Solar EPC Solutions SL [2018] EWHC 2866 focussed on whether delay damages constituted a penalty, the judgment also highlighted the perils of failing to give notice in the prescribed format.

Prosalia UK Ltd was engaged by GPP under five contracts, to construct solar power generation plants across the UK. Prosalia became insolvent and the contracts were assigned to its parent company and guarantor, Solar EPC Solutions. GPP sought to bring a claim against Solar for delay damages because the solar power generation plants had not been commissioned in accordance with the timescales specified in the contracts.

In relation to one of the contracts, Solar raised the argument that protests by local residents amounted to a force majeure event and Prosalia had therefore been entitled to an extension of time to commission the generation plant. The relevant contract specified that the party seeking to argue that a force majeure event had occurred, was required to give notice of the force majeure event to the other party. The Court held that because the contract contained specific notice requirements, notice of the force majeure event had to comply with these. Prosalia’s notice of the force majeure event had not so complied; it had merely provided some information about the local community objecting to the new cable route.  

The GPP v Solar case is a valuable warning that contractual notices clauses will be interpreted strictly. Where a contract specifies certain notice requirements, all notices must be given in accordance with those requirements. It is imperative that contracting parties pay attention to any notices provisions, both at the point of drafting and negotiation, and at the point of giving notice. Failure to comply with them could result in a significant detriment - the non-compliant party may be precluded from bringing a claim for relief if the availability of that relief is conditional upon valid notice being given.

For more information on this article please contact Hannah Pettit and Andy Braithwaite from the Commercial Team.

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