Victoria's Security Of Payment Reforms: Unfair Time Bars In Construction Contracts

Construction contracts often require contractors to notify the principal (or another party) of events or claims, such as delays, latent conditions or variations, within a certain timeframe. Failure to give notice on time will, in many contracts, prevent (or 'bar') the contractor from subsequently making a claim in relation to that event.

Courts will enforce these contractual 'time bars' according to general contract law principles, which can result in parties (generally contractors) losing rights to significant claims, and incurring significant losses, only for missing a deadline. That a time bar that is very short or difficult to meet is generally not an excuse.

As part of wider reforms in the construction industry, which continues to struggle with cashflow and insolvencies, the Victorian Government is introducing a new power for decision makers in disputes to declare time bars in construction contracts 'unfair' and of no effect for particular claims. This