Is a time bar clause in a contract enforceable?

"My company concluded a contract with a supply company to supply us with imported tiles. Given their reasonable price we bought a large shipment of the tiles. About 9 months later we discovered that a large number of the tiles were broken. We approached the supply company to replace the tiles, but they refused stating that our contract states that we had to notify them of any defects or damage in the tiles within 6 months of delivery. Surely they can’t rely on such a clause when they in fact delivered broken tiles?”

In general our law on prescription governs the period within which claims expire. That said, our law of contract does allow parties broad freedom to contract regarding various aspects of their relationship, including specific timeframes for actions to be performed by parties.

It has accordingly developed over time that contracts often contain so called time bar clauses which impose a time period within which a party must give notice to the other regarding disputes or dissatisfaction, failing which the right to claim relief lapses. Such a time bar clause in effect replaces the periods specified by our law on prescription and that would normally apply to such a claim. The inclusion of such a clause is primarily intended to provide certainty in specific circumstances, although these types of clauses can also hold onerous consequences for a party.

Our courts acknowledge that time bar clauses are enforceable, provided the notice period is clear and reasonable under the circumstances. The courts may also look carefully at the wording of the clause to determine whether the clause excludes both delictual as well as contractual claims. It may be that the wording of the clause is such that not all claims are excluded by the specific wording.

In your case it does appear that as you failed to provide the required notice to the supplier, the time bar clause will apply. The period also does not appear to be unreasonable. However, whether all your remedies have been excluded can only be determined on a closer reading of the specific contract and clause. We would accordingly advise that you consult an attorney to assist you in reviewing the contract and advise you on the merits of your case.

April 5, 2017
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