Notice requirements and time limits are pervasive in construction contracts. However, a party may be estopped from relying on contractual time limits if they have engaged in conduct that gives rise to an assumption that compliance with contractual notice requirements is not necessary, or if they direct additional work that will fall outside the contractual notice requirements and time limits.

The recent case of Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 2) [2021] NSWCA 93 considered whether a party could rely on estoppel in a construction contract. 

Valmont and Armani were parties to a construction contract in which Valmont was to provide construction and fit out works for a store at Sydney Airport. Valmont was tasked with installing joinery supplied by Armani, and Armani was going to engage a Chinese firm, Sun Bright, to supply that joinery. Sun Bright conceded that it could not meet the time stipulation, so Armani directed Valmont to supply the balance of the joinery, but Armani refused to pay for it because Valmont did not supply it within the time limit imposed by a clause of the Contract. 

Valmont pleaded that Armani should be estopped from relying on the clause. 

The Court of Appeal held that notice of an intended departure from an assumption as to a state of affairs must be given within a reasonable amount of time, and is not effective if it is given after the time at which the relevant party would have been required to give the requisite notice under the contract. 

Furthermore, the Court held that it would be unconscionable for Armani to rely in the contractual time limit, particularly as notice requirements were not strictly adhered to. A key takeaway from this case is that if a party believes that the other party may be under an incorrect assumption that compliance with certain contractual requirements are not necessary, then the party should negative that assumption as soon as possible.

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