This article explores the tension between the common law prevention principle and contractual notice provisions in FIDIC standard forms. While the prevention principle traditionally bars employers from enforcing obligations where their own actions cause delay, modern contracts require strict compliance with notice and conditions precedent for extension of time claims. Recent case law demonstrates a decisive trend towards enforcing notice regimes, even for employer-caused delays, raising questions about fairness and contractual autonomy.

Introduction

The prevention principle is a doctrine in English law, grounded in the maxim that no party should benefit from its own wrongdoing.

In construction law, this principle historically operated to prevent employers from levying liquidated damages for delays they caused. The principle traces its lineage to Holme v Guppy [1838], where the court held that an employer could not enforce liquidated damages for delays it had itself occasioned. Subsequent cases, such as Peak Construction v McKinney Foundations [1970]^[1], reinforced the doctrine.

The rationale is rooted in fairness and causation: contractual obligations cannot be enforced where the obligée has obstructed their fulfilment. In construction law, this translates into a prohibition on levying liquidated damages where employer-induced delays render timely completion impossible. However, the principle’s operation is contingent upon the contractual framework. Where the contract lacks an operative extension of time mechanism, employer-caused delay renders the stipulated completion date unenforceable, placing time ‘at large’. The contractor’s obligation then becomes one of completion within a ‘reasonable time’, and liquidated damages provisions collapse.

Notice Provisions as Conditions Precedent

FIDIC forms (1999 and 2017/2022 editions) seek to neutralise the risk of time becoming at large through comprehensive extension of time provisions (e.g., Sub-Clause 8.4 in 1999; Sub-Clause 8.5 in 2017/2022). These clauses impose stringent notice requirements under Sub-Clause 20.  Such provisions serve two purposes:

• Commercial rationale: Early notice enables investigation, mitigation, and cost control.
• Claims discipline: Strict compliance ensures predictability and prevents retrospective claims.

These provisions often function as conditions precedent, meaning that failure to comply extinguishes the contractor’s entitlement to an extension of time, even where the delay is attributable to the employer.

Where notice is a condition precedent, non-compliance bars extension of time claims. This creates a paradox: the employer may recover liquidated damages for delays it caused, seemingly contravening the prevention principle.

Judicial Treatment

English Law: Contractual Autonomy Prevails

English courts have consistently upheld notice provisions. In Multiplex v Honeywell [2007]^[2], Jackson J warned that allowing contractors to disregard notice requirements would enable them to ‘place time at large at their option’, undermining contractual certainty.

The Court of Appeal in North Midland v Cyden Homes [2018]^[3] reinforced this position, holding that the prevention principle is not a rule of public policy but an implied term, which parties may exclude or modify by express agreement. Consequently, failure to comply with notice provisions, even for employer-caused delays, bars extension of time entitlement and preserves liquidated damages.  The court stated:

‘A building contract is a detailed allocation of risk and reward. If the parties do not stipulate that a particular act of prevention triggers an entitlement to an extension of time, then there will be no implied term to assist the employer and the application of the prevention principle would mean that, on the happening of that event, time was set at large. But it is a completely different thing if the parties negotiate and agree an express provision which states that, on the happening of a particular type of prevention (on this hypothesis, one that causes a concurrent delay), the risk and responsibility rests with the contractor’.

Australian Divergence: Gaymark’s Interventionist Approach

In stark contrast, Gaymark Investments v Walter Construction [1999]^[4] applied the prevention principle to override strict notice provisions, setting time at large and nullifying liquidated damages. This approach prioritises substantive fairness but has been criticised for incentivising non-compliance and destabilising contractual frameworks. It remains influential in some jurisdictions.

DIFC

The DIFC Court of Appeal in Panther Real Estate v Modern Executive Systems Contracting LLC [2022]^[5] rejected arguments based on Gaymark, affirming that notice provisions serve a legitimate commercial purpose and will be enforced.

Latest Developments

Recent UK Supreme Court dicta (albeit not a construction case) reinforce the principle that contract law allows parties to allocate risk, even where this may enable a party to profit from its own breach. In King Crude Carriers SA and others v Ridgebury November LLC and others [2025] ^[6], the court stated:

‘[78] … There are many contractual circumstances in which a party may [take advantage of its own wrong]. This is most obviously illustrated by the principle that damages for breach of contract are to compensate the claimant and not to punish the defendant and, subject to rare exceptions, damages or an account of profits are not awarded to strip profits made by the defendant’s breach. Contract law permits efficient breach and the defendant may therefore profit from its wrong’.

Examples of efficient breach^[7] in construction contracts might include:

• delay where liquidated damages are capped;
• providing a cheaper design that falls short of the full specification, anticipating rectification will be less expensive; or
• using lower-grade material than specified, with damages assessed on a diminution in value rather than reinstatement cost.

Summary of the Case Law

The enforcement of notice provisions reflects a broader trend towards prioritising certainty over equity. While this enhances predictability, it raises concerns: should procedural defaults negate substantive entitlements where the employer is at fault? English law answers affirmatively, emphasising freedom of contract. Australian law, conversely, favours fairness, though at the cost of commercial clarity.

Practical Implications for FIDIC Users

• Treat notice provisions as strict conditions precedent; failure to comply is fatal to extension of time claims.
• Implement robust claims management systems to ensure timely notices.
• Consider bespoke drafting to clarify risk allocation for concurrent delays and employer prevention.
• Train project teams on procedural compliance, as courts will enforce notice regimes even against equitable arguments.

FIDIC 2017/2022

It is worth noting that under FIDIC 2017/2022, Sub-Clause 20.2.5 grants the engineer discretion to waive the time-bar for late notice of claim in certain circumstances. Whilst this provision does not expressly address employer-caused delay, its purpose is to prevent unfair outcomes and may, in practice, be invoked to avoid inequality. For example, if the employer’s conduct (such as withholding information or causing delay) contributed to the contractor missing the time limit, that could justify waiving the time-bar^[8].

Conclusion

The prevention principle does not override clear notice provisions under FIDIC forms. Courts increasingly view these clauses as integral to risk allocation, enforcing them even where employer-caused delays occur. For contractors, procedural discipline is not optional, it is the linchpin of preserving entitlements.

I would be happy to answer any questions you may have regarding these issues. Please feel free to contact me at victoria.tyson@howardkennedy.com.

 

[1] 1 BLR 111.

[2] EWHC 447 (TCC).

[3] EWCA Civ 1744.

[4] NTSC 143.

[5] DIFC CA 016.

[6] UKSC 39.

[7] Where breach is cheaper than performance, because damages are compensatory and not punitive.

[8] An employer may find it challenging to assert lack of prior knowledge of an event or circumstance that resulted from its own conduct