Key Contacts: Angelyn Rowan – Partner | Michael Cahill – Partner | Claire Wallace-Duffy – Senior Associate |
The use of conditions precedent in construction contracts is commonplace; however, the consequences of failing to comply with these can often be underappreciated.
A condition precedent is a clause within a contract that provides that certain rights and/or entitlements will be lost if and when specified conditions are not met. Notice requirements relating to construction claims are often presented in the form of a condition precedent. Therefore, a failure to comply with such notice provisions can be fatal to a claim.
Approach in Construction Contracts commonly used in Ireland
A number of the construction contracts commonly used in Ireland contain conditions precedent, including:
- Public Works Contracts: Contractor claims are subject to condition precedent notice provisions whereby the Employer will be released from all liability where the Contractor fails to give notice of its claim within the prescribed timelines (subclause 10.3).
- RIAI Construction Contracts (2025 Edition): The recently updated RIAI Construction Contracts now provide that a Contractor must give “details, notice, information, proposals and records” in accordance with prescribed timelines failing which it “shall not be entitled to an increase to the Contract Sum or extension of time” and the Employer is released from all liability (subclause 6.11).
- NEC4 Contract: One of the NEC4 ‘core clauses’ provides that where a Contractor does not give the Project Manager notice of a compensation event within 8 weeks of becoming aware of the event happening, “the Prices, the Completion Date or a Key Date are not changed” unless the event arises from an instruction, notification or certificate issued by the Project Manager or Supervisor (core clause 61.3).
- FIDIC Contracts (2017 Editions, 2022 Reprints): Notices of claims are to be given no later than 28 days after the claiming party “became aware, or should have become aware, of the event or circumstance” giving rise to the basis for the claim. Should a party fail to give such notice within the specified timeline, then any entitlement to additional payment or time shall fall away and the other party “shall be discharged from any liability in connection with the event or circumstance” (subclause 20.2, FIDIC 2017 EPC/Turnkey Contract (Silver Book)).
Approach of the Courts to Conditions Precedent
The Courts have generally been supportive of the use of conditions precedent, provided that the terms of same are clear and certain. The Courts have recognised that conditions precedent, such as notice provisions, serve a valuable purpose by ensuring that claims, and the circumstances of same, can be investigated while matters are current. Such clauses also afford a degree of control and certainty over time and costs on projects.
The UK case of Disclosure and Barring Service v Tata Consultancy Services Ltd [2025] EWCA Civ 380 concerned a contract between Disclosure and Barring Service (“DBS”) and Tata Consultancy Services (“Tata”) which required Tata to digitise and streamline DBS’ paper-based disclosure and barring checks processes. Difficulties arose due to delay and quality issues, which ultimately led to a claim by DBS for liquidated damages / delay payments.
The UK Technology and Construction Court (“TCC”) held that DBS’ right to claim delay payments under clause 6.2 of the parties’ contract was subject to conditions precedent set out within clause 6.1 – requiring DBS to issue a “Non-conformance Report” (“NCR”) to Tata where a deliverable failed to the “Acceptance Test Success Criteria” and/or where a milestone was not achieved due to Tata’s default. Since DBS had failed to serve an NCR in line with clause 6.1, the TCC held that a delay damages claim of £1.592 million (part of a wider counterclaim of over £100 million) could not succeed.
DBS sought to appeal the TCC’s decision and was granted permission to pursue one ground of appeal – whether clause 6.1 of the contract amounted to a condition precedent. DBS argued that the language within clause 6.1 was insufficiently clear to be a condition precedent.
The Court of Appeal upheld the TCC’s judgment and dismissed DBS’ appeal and in doing so reviewed and reiterated the principles underpinning conditions precedent. Coulson LJ reaffirmed the leading position on conditions precedent as outlined in Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep 109 which confirmed that whether a clause is a condition precedent or not depends on:
- the form of the clause itself;
- the relation of the clause to the contract as a whole; and
- general considerations of law.
Coulson LJ, in keeping with previous case law, stated that it was a futile exercise to articulate an “exhaustive checklist” of factors which define a condition precedent, however, he did identify the following general principles which can be taken from case law:
- Whether a condition precedent arises will depend on the precise words used, in their contractual context;
- A condition precedent must make a right, relief or remedy conditional upon a requirement that is itself specific and certain;
- Clear words must be used for a clause to be a condition precedent, however, the Court clarified that this does not mean that the clause must say “this is a condition precedent”;
- As well as satisfying the conditionality requirement, “it will usually be necessary for the link between the two steps to be expressed in the language of obligation (i.e. shall)”. While the use of such mandatory wording will not of itself be sufficient to establish a condition precedent, it is an important indicator, and discretionary language (such as “may”) is unlikely to support a condition precedent finding; and
- The first step of a condition precedent clause need not be expressed in a finite number of days or weeks – the Court noted that the use of wording such as “timely” or “within a reasonable time” have been found to be sufficient.
In his concurring judgment, Lewison LJ emphasised that almost any sentence beginning with the word “if” is conditional and that if a clause is structured in an “if-then” form then it is the “paradigm of conditionality”. The Court noted that all steps preceding the word “then” form part of the condition which must be satisfied before the consequences set out in the “then” part can be triggered.
While the UK Court of Appeal’s judgment provides helpful guidance as to the considerations to be borne in mind when drafting and/or interpreting conditions precedent clauses, the Court did caution as to the utility of relying on decided cases concerning different contracts with differing wording. The primary task of the Court is always to give meaning to the precise words used in context.
The Irish courts have adopted a similar approach to conditions precedent as the UK courts — by also requiring clear language and strict compliance in order for a condition precedent to be established.
The importance of complying with contractual notice provisions was highlighted in the recent case of Tenderbids Limited trading as Bastion v Electrical Waste Management Limited [2025] IEHC 139. Here the Irish High Court held that a failure to deliver a dispute notice in line with the contractual requirements, meant that a payment dispute “was never validly referred to adjudication” and that an adjudicator’s award of €1.53 million was null and void and could not be enforced. Our detailed analysis of this case can be accessed here.
Takeaway
As seen by the recent updates to the RIAI Construction Contracts, conditions precedent are increasingly found in standard form construction contracts in order to bring about the timely notification of claims and disputes. The inclusion of condition precedent wording is one of the typical amendments to the earlier versions of the RIAI Construction Contracts, which continue in use. Recent case law confirms that these clauses are very likely to be enforced by the Courts The failure to comply with such clauses can be fatal to claims and so employers, contractors and subcontractors should be aware of any notice obligations that are required to be complied with as a condition precedent from the outset of a project. To do so is not an overly contractual approach, but merely a necessary formality that protects a party’s contractual entitlements.
This article was written with the assistance of Paddy Mockler, Andrea Kells and Scott Carney.
