notices clause

Notices clauses are incorporated into commercial contracts to establish a known and agreed means of communicating notices issued under the contract, to ensure that the contractual notice comes to the attention of the relevant representative of the contracting party.

Provisions of a Notices Clause

A notices clause may designate:

1. the mode of delivery of communications, such as by hand, first class pre-paid post, facsimile, or courier;
2. The address or details required to transmit the communication , such as the registered office of the party, the facsimile number;
3. when the communication is deemed to be received by reference to the mode of delivery, if delivered by hand, upon delivery; by first class prepaid post, at 10.00 am on the second business day after posting; by fax, instantaneously  provided it is received before 4.00 am on a business day in London;
4. parties to whom copies of the communication must be sent, along with the details required;
5. the language which must be used in the notice, where there is an international dimension to the contract.

Email addresses are not often used for notices clauses, due to the difficulty to proving receipt in the event that a dispute arises. When a notice is sent the recipient in accordance with the terms of the clause, the party should receive actual notice of the matter communicated; if the notice does not come to the attention of the party, the recipient will have constructive notice of the matters set out in it.

Type of Notices

The types of contractual notices sent in accordance with a notices clause include notices to:

1. provide notice to terminate a contract;
2. exercise an option;
3. call upon a defaulting party to remedy a breach of contract which is remediable;
4. requiring the party to perform an obligation; and
5. exercising rights under the contract;
6. Updating a register of secured interests, where transmission of a security interest has taken place;
7. make a demand for payment of interest;
8. call for the delivery of documents required to be delivered
9. suspend performance of the contract in accordance with an entitlement to do so.

Notices such as notice of termination, demands to remedy breaches and any other event requiring formal notice are likely to be ineffective if they are not sent in accordance with the terms of the contract. In one of the worse cases, acting on a contractual event without issuing notice in the prescribed method may result in a repudiatory breach of contract or contractual warranty and expose an otherwise innocent party to a claim for damages or an injunction to restrain further breaches of the contract, causing unwanted and unnecessary delay and expense.
A simple form of a notices clause might read:
“Any notice given in writing under this agreement marked to the attention of the directors and:

1. sent to party at its then registered office by first class prepaid post, or
2. by facsimile to the Company at [number] and to the Supplier at [number].”