Notices are an important part of contract administration in construction projects. They are not simply administrative formalities – they are often the mechanism by which a party preserves their entitlement to additional time, payment or other contractual remedies. Failure to comply with notice requirements can have significant consequences including the loss of entitlement to claims and, in some cases, difficulties enforcing contractual rights.

Whilst the specific requirements vary between standard forms, particularly SBCC and NEC contracts, the underlying principle is the same: parties must notify key events promptly and in accordance with the contract.

Here are the key notices that the construction industry should pay attention to when progressing works under a construction contract.

Extension of Time (EOT) and Delay Notices

Extension of Time provisions deal with events that prevent or are likely to prevent the contractor from completing the works by the contractual completion date. Common examples include variations, late information, restricted access and extremely adverse weather.

Under SBCC contracts, contractors are generally required to notify the Employer, Architect or Contract Administrator when it becomes reasonably apparent that progress is being, or is likely to be, delayed. Early notification allows the cause and effect of the delay to be investigated and mitigation measures considered.

NEC contracts place even greater emphasis on proactive management through Early Warning Notices and Compensation Event procedures. Parties are expected to notify issues as soon as they become aware of them, with strict timescales often applying. Compensation events require to be notified within eight weeks of the party becoming aware of them, otherwise entitlement may be lost.

In either case, early notification is critical. Waiting until the impact is fully understood can create difficulties and may, in some circumstances, result in a loss of entitlement.

Payment Notices

Payment notices remain one of the most important notices in construction contracts and are closely linked to the statutory payment regime under the Housing Grants Construction and Regeneration Act, as amended (“the Construction Act”).

A valid payment notice should identify the sum considered due at the relevant due date as well as the basis upon which that sum has been calculated.

A payment notice must be issued no later than 5 days from the due date. The contract will specify the party responsible for issuing the notice. Depending on the contractual arrangement, this may be the Employer, Contract Administrator, Project Manager or another party.

Failure to issue a valid payment notice can have serious consequences. If the payer fails to serve a payment notice on time, the contractor’s payment application may become the default payment notice. Unless further action is taken, the payer may be required to pay the amount claimed regardless of any valuation dispute.

Given the strict approach adopted in adjudication and by the courts, payment notices must be issued on time and contain sufficient detail.

Pay Less Notices

A Pay Less Notice gives the paying party an opportunity to pay less than the amount stated in a payment notice.

To be effective, the notice must be issued within the required timescale prior to the final date for Payment, state the amount considered due as at the date of the notice and set out the basis of calculation.

Importantly, the party responsible for issuing the Payment Notice may not be the same party responsible for issuing the Pay Less Notice. The contract should be checked carefully to identify who is authorised to issue each notice.

Failure to serve a valid Pay Less Notice can be costly. Even where there is a genuine dispute regarding the value of the works, the paying party may still be obliged to pay the notified sum in full and then seek to recover any overpayment at a later stage.

Loss and Expense Notices

Loss and expense provisions provide a mechanism for contractors to recover additional costs arising from employer risk events, such as delayed instructions, disruption or changes to the works.

Under SBCC contracts, contractors are generally required to notify the event and provide details of its likely financial impact. Importantly, notice provisions may operate as a condition precedent to recovery. This means that failure to provide the required notice can result in the contractor losing its entitlement to recover loss and expense, irrespective of the merits of the claim.

Notices should identify the event relied upon, the likely impact on costs as well as any supporting information available at the time. Moreover, detailed records should be maintained to support the claim as it develops.

Under NEC contracts, additional cost recovery is generally dealt with through the compensation event process rather than traditional loss and expense provisions. However, the importance of prompt notification remains the same and the same strict eight-week timescale applies.

The Inner House, in the case of FES Ltd v HFD Construction Group Ltd [2024] CSIH 37, recently confirmed that compliance with the SBCC notice provisions for loss and expense claims is a condition precedent to recovery. Contractors should therefore ensure that notifications are issued as soon as the likely impact of a Relevant Matter becomes apparent.

Suspension and Termination Notices

Suspension and termination notices carry some of the greatest risks in construction contracts. Defective notices can expose the issuing party to significant liability.

The Construction Act gives contractors a statutory right to suspend performance for non-payment, provided the appropriate notice is served. The notice should clearly identify the grounds for suspension and comply with any contractual requirements.

Termination provisions are usually strict, and contracts often require a specific contractual ground for termination, service of a default notice, a period allowing the breach to be remedied and a further notice terminating the employment under contract if the breach is not corrected.

Parties should take particular care with timing, content and method of service. A notice served incorrectly may be ineffective and potentially give rise to allegations of wrongful termination. It is also important to check who is authorised to issue each notice. For example, a contract may require the Contract Administrator to issue the initial default notice, but the Employer to serve the subsequent notice terminating the contractor’s employment.

Key Takeaways

Both SBCC and NEC contracts rely heavily on notices, but they adopt different approaches. SBCC tends to be more reactive, with specific notices linked to particular contractual entitlements, such as extensions of time and loss and expense. NEC, by contrast, places greater emphasis on proactive project management through early warnings and compensation events.

Regardless of the contract form, notices should never be treated as a mere administrative exercise. Timely and compliant notices are often the key to protecting entitlement to additional time, payment and other contractual rights while reducing the scope for costly disputes.

If you have any questions about Notices, do come along and speak to our team at the Scottish Construction Summit on 22 October 2026.

MFMac’s Construction team provides legal advice throughout the lifecycle of a project, from inception to completion to post-completion disputes. This includes advising on compliance with notice provisions.