A Suggested Ban on Queens of Hearts Clauses

queenMany if not most construction contracts contain notice provisions, which are fine: contractor have to give reasonable notice of their claims. Others contain Queen of Hearts clauses: clauses which are designed to be practically impossible of compliance and hence to frustrate the underlying contractual scheme of payment for varied work, extension of time in defined circumstances, etc.

Recently, I have seen examples where

  • The contractor is required to give no less than 10 notices/claims  in respect of the same event, each expressed to be a condition precedent to payment;
  • The contractor is required to provide a full time impact analysis every time something happens which might – just might – cause a delay;
  • If the employer issues a variation order, varying the work, the contract has to promptly give notice in a prescribed form that the variation order varies the work. Again, this completely pointless notice is a condition precedent to payment for the varied work.

I have not yet seen a provision requiring claims to be submitted on unicorn vellum and served on Father Christmas, but the effect is much the same.

It is arguable, following Cavendish v El Makdessi, that the equitable doctrine of relief from forfeiture might be available to address these excesses, but a statutory ban on Queen of Hearts clauses might be preferable. Something, perhaps, along the following lines:

(1)   A provision in a Construction Contract which purports to make a right to claim or receive payment, or a right to claim or receive an extension of time, conditional upon the provision of any notice shall be of no effect if

(a)   Compliance with the requirements of the provision would not be reasonably possible or would be unreasonably onerous, or

(b)   The requirements of the provision are not reasonably justifiable by any legitimate commercial purpose

(2)   For the purpose, “notice” includes any notice, claim for payment, narrative or calculation as to actual or estimated time or money.

Such a statutory provision would, of course, call for judgement (and perhaps judgments) as to what is OK and what is not OK. But that sort of feature is hardly unusual – consider for example the Unfair Contract Terms Act in the UK and many of the provisions of the Australian Consumer Law. In practice, of course, courts, arbitrators and adjudicators bend over backwards in order to avoid giving effect to Queen of Hearts clauses, and a statutory test would at least provide a yardstick by which to measure what is acceptable.

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