Lessons Learned #38: Keep Your Options Open

Most people are aware that when making plans for an event or preparing for a trip, there are a variety of options that require choices to be made within specific time periods, or the options expire. The expiration of some options may affect the outcome in ways that are significant, even drastic.

For instance, if you plan to travel to a popular destination for a special event and would like to arrive there two weeks from now, you have the option of flying, or driving, among others. However, if you wait too long to make travel arrangements, you may find that some of your options have been restricted, or eliminated, due to lack of availability (no space remaining on flights, sold out hotels, or only very expensive choices remaining). Where you thought you had an option to fly or drive, you are now limited to driving. In addition, you may end up having to stay far from the venue for your event, which could result in additional complications for you.

In the example above, there were options available to you, that, through lack of a timely decision, or through your failure to act, the resulting outcome was substantially different from your expectations. The bottom line in these situations is that you need to be aware of the options you have, the rules for exercising them, and take action prior to their expiration if you wish to have a chance to participate in the benefit from that option.

The same can be said about the options available to you when you are performing your work under a contract. You may not think about it in this way, but imagine your contract is an evolving document which can change in size and shape. Each time that certain conditions arise during construction, you may have the option to modify that flexible document to account for the new condition. However, you can easily lose the option to make that change through your failure to take timely action, or by taking an improper action. You may be wondering what is the key to keeping your options open under a contract? The answer is found in one word: “NOTICE”.

Notice can be defined as making someone aware of a fact or a thing. In everyday practice, this could be done simply by telling someone about that fact or thing – in other words, through ordinary conversation (a common form of communication). However, the term “notice” is usually defined in a contract to mean a very specific type of communication. Contracts will typically define:

1. how the notice is to be communicated (usually in writing),
2. to whom the notice must be given,
3. how the notice must be delivered (e.g. certified mail, or hand delivery), and most importantly,
4. when the notice must be delivered.

The failure to provide “proper notice” as defined in a contract could take away your option to modify the contract to account for a condition which would otherwise give you the ability to make a change to compensate you for additional costs and time associated with the condition.

Providing proper, timely notice is not difficult, and need not take a lot of time. However, you need to be informed about the specific requirements for the notice from the language in your contract. Contracts can vary greatly in their requirements, and you should be aware that there may even be different requirements for giving notice of different conditions within the same contract.

Remember, to keep your options open you must provide proper notice in accordance with your contract. The failure to provide notice is one of the most common issues in dispute when attempting to recover additional costs and time on construction projects.

Learn more about notice in my book Document to Reduce Risk, where I call notice “the most important rule” of the contract. You will also find numerous examples for preparing your notice when dealing with various project conditions in the sample letters included in Appendix B of the book. You can obtain a print or e-book copy through my website. The e-book version will allow you to cut and paste the sample letters you need for your notices.

Missed any prior issues? Get copies from the “Lessons Learned” tab on my website. Until next time, Paco Farach.

“There is no promised road leading to definite results. What is important is how to keep open as many options as possible.” – Makoto Kobayashi

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