˂  Back

A QUICK GUIDE ON “NOTICE PROVISION” IN A CONTRACT

Introduction

The “notice provision” tends to be overlooked by the parties entering into agreements as these clauses often seen as a standard boilerplate clause, presumed to have minimal significance or impact. However, the notice provision/clause found in the miscellaneous clauses at the end of the contracts or sometimes appears as a standalone section, deserves more attention.

The intention of this article is to encourage a careful examination of this clause/provision each time it surfaces in a contract.

.

Purpose of a “Notice Provision”

Unlike many other terms in an agreement, the notices provision is rarely subject to negotiation and it is not crafted to benefit one party over the other. Instead, its purpose is to minimise potential disputes by defining the criteria or requirements for giving a valid contractual notice.

A “Notice Clause” usually outlines the necessary details on how and to whom notices must be delivered for the contract to be legally binding. These clauses are essential in specifying notice periods for various scenarios, such as term renewals, exercising a right under the contract, event of default, termination, etc.

hese clauses ensure that one party gives fair warning to the other when exercising their legal rights under the contract. Essentially, the notice provisions establish the methods and recipients for communication, ensuring that critical matters are brought to the attention of the involved parties in accordance with the terms of the contract.

 

Things to note when reviewing the “Notice Provision”

When reviewing the notice provision, the key elements to focus on are, as follows:

Examples of “Notice Provisions”

Below are some examples of “notice provisions/clauses” extracted from different types of agreements. While these examples may not encompass the entire spectrum of notice clauses encountered, they serve to demonstrate the diversity of these provisions across different contracts.

.

Sample Notice Clause No.1

(a)    All notices, demands or other communications required to be given or made in connection with this Agreement shall be in writing and shall be sufficiently given or made if –

(i)     delivered by hand;

(ii)    sent by pre-paid registered post; or

(iii)   sent by email (provided that there has been successful transmission),

 addressed to the person authorised to receive the notice as set out in Schedule 1 or at such address or email address as may be notified in writing by one Party to the other Party from time to time.

 .

(b)   Any such notice, demand or other communication shall be deemed to have been duly served if it is (i) delivered by hand or sent by pre-paid registered post, at the time of delivery; or (ii) if made by email transmission, at the time of email transmission (provided that there is no non-delivery notice received by the sender), provided that if the time of delivery or transmission falls beyond 6.00 pm on a Business Day, such notice, demand or other communication shall be deemed to have been duly served at 9.00 am the next Business Day.

 .

Sample Notice Clause No.2

1.1  Any notice to be given under this Agreement shall be in writing and either be delivered personally or sent by registered post or, by courier or email.

 .

1.2  Unless earlier notified to the other Party of any other address for service, the address for service of each Party shall be as follows:

 

(a) ABC  Sdn Bhd

No. 123, Wembley Street, 60000 Kuala Lumpur 

Email address: ABC@email.com

Attention to: Contract Manager

(b) XYZ Sdn Bhd

No. 888, Lorong Kenari, 47000 Petaling Jaya, Selangor

Tel No.: 03-8888888

Email address: XYZ@email.com

Attention to: Legal Manager

1.3  A notice shall be deemed to have been served:

  • (a) If delivered personally, at the time of delivery;
  • (b) If posted by way of registered post, three (3) Business Days after posting; or
  • (c) If made by email transmission, at the time of email transmission (provided that there is no non-delivery notice received by the sender)
  •  

1.4  A party may change its address, email address for notices by giving written notice to the other party.

.

Sample Clause No. 3

NOTICES

  1. a) Any notice to be given by either party to the other in connection with this Agreement shall be in writing and may be given personally or sent by fax or by prepaid registered post to the other party at the address contained in this Agreement.
  2.  
  3. b) Any notice sent by facsimile shall, in the case of a facsimile sent before 5.00 pm on a Business Day, be deemed served on receipt of a successful transmission notice and, in the case of a facsimile sent after 5.00 pm on a Business Day, at 10 am on the next following Business Day. If delivered by hand, any notice shall be deemed to have been served at the time and date of delivery. Any notice served by registered post shall be deemed served 5 Business Days after posting. In proving the service of any notice it will be sufficient to prove, in the case of a letter, that such letter was properly stamped, addressed and placed in the post and, in the case a facsimile, that such a facsimile was duly dispatched to a current fax number of the addressee. Notice given under this Agreement shall not be validly served if sent by email.
  4.  

Conclusion

Failing to adhere to the requirements of a notice clause in the contract can lead to significant consequences.

Hence, it is crucial for the parties involved in the contract to ensure that they meet all the contractual requirements/obligations when issuing the notice under the contract. Further, this process becomes straightforward when the notice clause is drafted in a clear and concise manner.


This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

About the author

Lynn Foo
Partner
Construction & Energy Unit
Harold & Lam Partnership
lynn.foo@hlplawyers.com


More of our articles that you should read:

Exploring the Legal Implications of AI as Inventors: UK Patent Law Perspective

STAMP DUTY FOR FOREIGN CURRENCY LOAN

Failure to Plead the Relevant Contractual Clause in Adjudication Proceedings (CIPAA 2012) is Fatal

Protecting Yourself: A Legal Perspective on Online Scams

Our Services