Time Bar and Benefitting from One's Own Wrong - Perspectives from Common Law and Chinese Law
10 March 2011Projects (Engineering and Construction)
Picture a common scenario. A project is delayed. The Contract provides for the deduction of liquidated damages, which the Employer decides to impose. The Contractor argues that the Employer should grant an extension of time and should be liable for extra costs. In reply, the Employer relies on the Contract which required the Contractor to give notice within a specific period, failing which the Contractor would be deprived of its entitlement to extra time and costs. Given that the Contractor had failed to give the requisite notice, the Employer states that the Contractor's claim is "time barred". However, this may mean that the Employer profits as a result of its own breach of the Contract.
This article compares the judicial attitude in Common Law jurisdictions as well as in the PRC regarding the above issue. Practical tips will be given at the end of this article.