In construction law, particularly under public procurement regimes such as the Ethiopian Public Procurement Agency (PPA) General Conditions of Contract, the entitlement to an Extension of Time (EOT) represents a fundamental mechanism for risk allocation and contractual fairness. It enables contractors to adjust their contractual completion timelines in response to delays not attributable to their fault. However, the enforceability of such entitlements is frequently conditioned upon strict procedural compliance, including the submission of timely notices. While procedural discipline is essential for certainty and auditability—especially in publicly funded projects—an overly rigid application of these procedural rules may undermine the broader legal doctrines of good faith, estoppel, and the equitable interpretation of contract terms.
A recent dispute arising from a high-rise private building project in Addis Ababa illustrates the tension between procedural formalism and substantive justice. In this case, although the contractor faced material delays caused by the employer’s failure to obtain timely building permits and by the issuance of defective design drawings, the contractor’s EOT claim was denied. The basis for the denial was not the absence of causation or impact, but the lack of a formally titled “notice of intention to claim” pursuant to Sub-Clause 73.4 of the PPA General Conditions. The engineer, despite being aware of the delay events and actively engaging in mitigating them, rejected the claim solely due to the contractor’s noncompliance with the formal notice provision.
This outcome challenges the fundamental purpose of notice provisions in contract law. The raison d’être of a notice requirement is to ensure that the counterparty is made aware of a potential claim in a timely manner so that mitigation or resolution can be undertaken early. In many legal systems, this purpose is fulfilled not merely by the formality of notice but by its substance—i.e., whether the party received clear, timely, and adequate information to address the problem. This doctrine is well established in common law jurisdictions under the concept of “actual knowledge” and in civil law systems under the broader principle of good faith (bona fides). The functional value of a notice requirement is therefore not in the rigid compliance with titling or formatting, but in the effectiveness of communication.
From a contractual interpretation perspective, clauses such as Sub-Clause 73.4 cannot be read in isolation. A coherent and purposive reading must consider its relationship with Sub-Clause 73.3, which permits the engineer to grant EOTs retrospectively, and with Sub-Clause 77, which obliges contractors to issue early warnings of delay risks. These clauses, taken together, suggest a flexible, integrated regime designed not to punish procedural missteps but to promote transparency, mitigation, and equitable project outcomes.
The contractor in this case had issued early warnings consistent with Sub-Clause 77 and the engineer had acknowledged the employer-related delays, engaged in mitigation, and held contemporaneous records of the delay events. This conduct established a common factual and contractual understanding that an EOT was warranted.
Furthermore, the rejection of the EOT claim based on formal defects contradicts the operation of non-waiver clauses under the PPA General Conditions, such as Clauses 6.5 and 29.4. These clauses stipulate that the failure to enforce a contractual right or to comply with a procedural condition precedent does not amount to a waiver unless such waiver is made expressly in writing. In this context, the engineer’s active engagement in resolving the delay, while never expressly waiving the formal notice requirement, created a reliance-based estoppel, which should have precluded the engineer from subsequently invoking procedural noncompliance as a bar to the contractor’s entitlement.
This case also raises serious concerns about the suitability of applying PPA-based contract forms to private sector projects. The PPA General Conditions are primarily designed to uphold principles of public accountability, auditability, and transparency. These are essential objectives in public procurement but are often misaligned with the commercial realities of private sector construction, where flexibility, risk-sharing, and efficient dispute resolution are paramount. The use of public-sector contract forms in private engagements can lead to legal misfits, procedural bottlenecks, and unjust outcomes—where otherwise valid claims are denied due to hyper-technical requirements with no bearing on the merits.
The legal doctrine of proportionality, increasingly influential in administrative and contractual adjudication, also militates against the denial of substantive rights based solely on procedural omissions. Where a contractor acts in good faith, communicates promptly, and the engineer has actual knowledge of the events giving rise to the claim, the outright rejection of an EOT entitlement solely on the basis of missing a formality may be viewed as disproportionate and contrary to equitable principles.
From the perspective of international contract practice, standard forms such as FIDIC and NEC have evolved to address this tension. They provide more balanced mechanisms for claim notification, allowing for retroactive approvals, discretionary flexibility, and the recognition of informal communications where appropriate. These forms place greater emphasis on the intent and conduct of the parties rather than rigid adherence to form.
In light of the foregoing analysis, it is imperative for project stakeholders—engineers, contractors, and policymakers alike—to recalibrate their approach to notice provisions in construction contracts governed by PPA conditions. Engineers should utilize their discretionary authority under Sub-Clause 73.3 to grant EOTs where actual communication and collaborative efforts have occurred. Contractors, in turn, should continue to issue timely early warnings and supplement them with formal notices where feasible, not merely to satisfy procedural thresholds but to maintain robust evidentiary records. For future projects, it is strongly recommended that PPA conditions be either avoided in private engagements or amended through Special Conditions to better reflect the practical dynamics of commercial construction.
Finally, the legal and contractual system must resist the drift toward mechanical formalism. The essence of contract administration lies not in policing paperwork, but in managing risk, preserving relationships, and facilitating successful project delivery. Substantive justice—grounded in good faith, mutual cooperation, and fair dealing—must remain the guiding light in the interpretation and application of procedural requirements. Only by embracing this balanced approach can stakeholders uphold the true intent of construction contracts: to allocate risks fairly and to deliver projects efficiently, equitably, and in good faith.
Editor’s Note: Mekonnen Tsegaw holds a BSc in Civil Engineering, an MSc in Geotechnical (Civil) Engineering, and an LLB in Law, combining technical expertise with legal acumen to address complex challenges in engineering and construction law—Associate Member of Nemad Consulting Architects and Engineers Plc.
BY MEKONNEN TSEGAW (ENGR.)
THE ETHIOPIAN HERALD TUESDAY 17 JUNE 2025
