CONTRACTOR NOT ENTITLED TO AN EXTENSION OF TIME AS A RESULT OF FAILURE TO COMPLY WITH AGREED PROCEDURE

City Inn Ltd v Shepherd Construction Ltd (unreported, 20 May 2003)

In City Inn Ltd v Shepherd Construction Ltd (unreported, 20 May 2003), the Inner House of the Court of Session held that contractors were not entitled to an extension of time as a result of their failure to comply with the procedure laid down in the contract for making an application for an extension of time where the contract contained a clause which stated that, if the contractor failed to comply with the procedure, it would not be entitled to an extension of time. The court rejected the submission that this clause was invalid as a penalty clause. It held that the clause was valid and enforceable and their conclusion in this respect underlines the need for contractors to take steps to ensure that they comply with any procedures laid down in the contract when applying for an extension of time.