Contractual deadline for claims of the construction contractor – FIDIC clause 20.1

Publication / 15.01.2024

The problem of the scope of admissibility and the consequences of reserving contractual deadlines for the assertion of property claims raises numerous controversies. In Polish contractual practice for the implementation of infrastructure investments, the FIDIC contract template is widely used, an element of which is a clause reserving precisely contractual final time limit in the strict sense (FIDIC clause 20.1).

The autonomy of the parties’ will, as a rule, includes the authority to set contractual deadlines, with the proviso that, with respect to a specific provision reserving such a deadline, it should be examined whether it does not violate law, the properties (nature) of the legal relationship in question and the principles of social interaction or does not lead to the circumvention of law (Article 58 § 2 of the Civil Code).

It has been recognized in case law that both the FIDIC general conditions and the special conditions used in the conclusion of a contract by way of the award of a public contract constitute a model contract within the meaning of Article 384 of the Civil Code.

The most important parts of the clause 20.1 in question are as follows: “If the Contractor considers itself entitled to an extension of the Completion Time, or to an additional payment, under any clause of these Conditions or on any other basis related to the Contract, it shall notify the Engineer, describing the event or circumstance giving rise to such claim. The notification shall be given as soon as practicable, but no later than 28 days from the date on which the Contractor became aware, or should have become aware, of the event or circumstance in question. If the Contractor does not submit a claim within such 28-day period, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Ordering Party shall be relieved of all liability for the claim. […] If the Contractor fails to comply with this or any other clause relating to the claim, any entitlement to an extension of the Time for Completion or additional payment shall be limited to the extent that such failure prevented or prejudiced the due investigation of the claim.”

Statements of foreign literature and jurisprudence indicate that the function of the clause under review is not to limit the investor’s liability to the contractor in connection with the performance of the contract. The functions of this clause are viewed similarly in Polish jurisprudence.

The evaluation of the validity and legal qualification of FIDIC clause 20.1 was the subject of the Supreme Court’s decision contained, among others, in the judgment of March 23, 2017, ref. no. V CSK 449/16. The Supreme Court qualified the aforementioned provision as establishing a contractual time limit, considering it, in principle, permissible under freedom of contract (Article 3531 of the Civil Code).