Short contractual time limits loom large, warns North

North of England Club has noted that a trend for shortening contractual time limits to notify claims in charterparties and other contracts was making compliance increasingly difficult.

The Club observed that there was nothing new in specifying within a commercial agreement that all claims must be notified to the other party, or proceedings begun, within a set period of time. However, the current trend was for parties to agree very short time limits – often only a few days – which were in practice impossible to comply with.

Judges and arbitrators typically upheld clearly worded time bar clauses, even if they were very onerous, upon the justification of a commercial need to settle claims quickly. North said that there might, however, be arguments available to challenge short time limits.

The Club therefore has produced an article that looks at the situations where time bars would be enforced and the potential arguments to escape their consequences. It covers a number of legal cases in detail, assessing their implications.

“The best advice though is to only agree to workable time limits which are fair to both parties.”