Time-Bar Clause Not Enforceable under the Civil Code

Sustainability of "Time-Bar" Clauses under Civil Law

Time-bar clauses are permanent fixture of common-law standard contracts and, even up to this writing, are subject of continued debates by common-law construction scholars on the issue of enforceability. It appears that various common-law Courts have varied views on time-bar clauses relative to condition precedents under FIDIC and NEC3 standard contracts especially those touching on conditions precedent for the grant of extension of time (see further discussions on this issue under Section 5, infra, of this Chapter).

Insofar as paragraph (1) of Clause 40 of Qatar's General Conditions of Contract, this writer is of the considered view that "time-barring" the contractor's claim for extra costs after the Engineer unilaterally issues notice suspending the works will generally be held inequitable, if not illegal, for the following reasons:

a. Article 171 of the Civil Code states in clear and unequivocal language that "contract has the force of law between contracting parties. It can be revoked or altered only by mutual consent or for reasons provided for by law".

Any order issued by the engineer suspending the works no doubt constitutes a unilateral alteration or temporary revocation of the contract which, this writer submits, is proscribed by Article 171 of the Code. Where, upon unilateral alteration of the contract, the contractor present his claim for extra cost (thus an implied acceptance or ratification of the engineer's unilateral action), equity dictates that the employer should pay the contractor irrespective of the period when the claim was served in writing.

b. These extra costs benefit the Employer and it would be inequitable to deny payment to the contractor for the simple expediency of lack of written notice served within a limited period fixed by the employer in contract which is merely adhered to by the contractor, especially when the project is too large to evaluate the cost effects of suspension within short notice. Notice that suspension here is ordered by the engineer and the employer cannot doubly benefit from the act of his representative by both suspending the works and refusing payment of extra cost.

c. Extra costs are money claims of the contractor. The Civil Code regulates certain actions to be instituted within fixed prescriptive periods, and such period cannot be modified, altered or dispensed with by mere agreement of the parties.

In other words, the contractor will always have the right to claim against the employer for extra cost beyond the period fixed in the agreement but before the expiration of the prescriptive period fixed by law. Pertinent provision of law is hereby reproduced herein as follows:

"Actions arising from obligations prescribe in fifteen years except for cases for which the law prescribes a different period such as the following articles". (Article 403, New Qatar Civil Code)

Based on the foregoing, only an ill-advised engineer or employer will refuse the claim of the contractor, and the latter may have a claim not only for the extra cost but for other damages allowable under the law as well.

(The foregoing is an excerpt of the Book entitled: Contracting Guide under the New Civil Code of Qatar written by this author)