International Construction Law Review
LOCKED BEHIND TIME BARS
Antoine Smiley
Senior Associate – Energy and Natural Resources
(Projects and Construction) at Reed Smith, London
asmiley@reedsmith.com
Raeesa Rawal
Associate – Energy and Natural Resources
(Projects and Construction) at Reed Smith, London
rrawal@reedsmith.com
Time bars have long been recognised for the commercial purpose they serve in the construction industry. Their enforceability, however, relies not on their valid purpose, but on the judiciary’s refusal to interfere with parties’ freedom of contract. As a result, even in situations where a time bar serves no purpose other than to provide a windfall gain to the principal, the law provides no general remedy for a contractor to avoid forfeiture of its claim. Given the judiciary’s reluctance to interfere, this paper advocates for a legislative scheme to strike a better balance in the law’s treatment of time bar provisions.
“No man is his brother’s keeper; the race is to the swift; let the devil take the hindmost.”1
For a long time now, whether by will or by force of precedence, common law courts have enforced contractual time bars. In doing so, unlike in the anomalous case of the doctrine of penalties, the judiciary has followed the classical contract theory,2 resisting any well-meaning paternalism that would redress unfairness, and instead opting to preserve the sanctity of contract and the parties’ utmost liberty of contracting. In the context of construction contracts, this means that a principal is free to rely on a very
* A paper based on that awarded the 2017 Brooking Prize by the Society of Construction Law Australia at the SoCLA National Conference in the Gold Coast, Australia on 28 July 2017.
1 A quote from Gilmore G, The Death of Contract, (Ohio State University Press, 1974) at 104, reflecting on the almost absent sense of social duty assumed by nineteenth century classical law theorists in America, who advocated for unrestricted freedom of contract, with interference being limited to only extraordinary circumstances in order to protect weak parties victimised by unscrupulous behaviour.
2 An oft-quoted statement of freedom of contract can be found in Printing & Numerical Registering Co v Sampson (1875) LR 19 Eq 462 at 465:
“It must not be forgotten that you are not to extend arbitrarily those rules which say that a given contract is void as being against public policy, because if there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when freely and voluntarily entered into shall be held sacred and shall be enforced by courts of justice. Therefore, you have this paramount public policy to consider – that you are not to lightly interfere with this freedom of contract.”
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