Notice Clauses

Notice clauses are an important element of a contract and should specify how and when notice must be served. They require parties to inform each other if a specific event has happened or is about to happen. In commercial agreements, it is common to demand notice:

• If a party decides to terminate the contractual relationship;
• To exercise a right under the contract;
• To amend payment or supply terms; or
• In the event of a breach of contract.

A failure to comply with the terms of a notice clause may mean that the notice is not valid which can cause unnecessary delays and sometimes be fatal to the course of action that the party giving notice wants to follow. This is why it is important for parties to be aware of their obligations under a notice clause and to ensure that they are fulfilled.