The Importance of Serving Proper Notice in Commercial Contracts

November 19, 2025

In the fast-paced world of business, timing and precision are everything, especially when it comes to contractual obligations. One of the most overlooked yet critical aspects of contract management is the proper service of notice. Whether terminating an agreement, notifying a change in control, or warning a party of a potential delay, the way notice is served can be fundamental to the validity of the notice and its enforceability.

In commercial contracts, “notice” refers to the formal communication of a party’s intention to exercise a contractual right. Most agreements specify how notice must be served (e.g., by post or by email), when it becomes effective, and to whom it must be addressed. These provisions are not mere formalities but are binding legal requirements. Failure to comply can render the notice invalid, exposing a business to ongoing obligations, financial liabilities, or litigation. For businesses navigating complex agreements, understanding the nuances of notice provisions isn’t just good practice; it’s essential risk management.

The Consequences of Defective Notice

The consequences of defective notice in commercial contracts can be severe. Common risks include:

1. Invalid Termination

If notice is not served in accordance with the contract, the termination may be deemed invalid, leaving your business bound to an agreement it intended to exit. Moreover, if the termination is invalid and you have ceased performing your obligations under the mistaken belief that it was valid, you could be liable for a material breach of the agreement.

2. Loss of Rights

Many commercial contracts include time-sensitive rights, such as break clauses or renewal options. If notice is not served correctly or on time, these rights may be lost entirely. For example, a customer may lose the opportunity to exercise a break clause if the notice is served too late or addressed to the wrong individual.

3. Litigation Risk

Improper notice can trigger disputes over contract validity, wrongful termination, or breach of contract. If the other party challenges the notice, your business may face costly litigation, damages claims and reputational harm.

4. Reputational Harm

In high-value or long-term commercial relationships, procedural missteps can damage trust and credibility. A poorly handled notice may signal disorganisation or bad faith, potentially jeopardising future deals or partnerships.

5. Costly Error

Even seemingly minor deviations from notice requirements can invalidate the notice. In the case of Mannai Investments, the court famously remarked that if the clause had said that notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the party wanted to terminate. It is clear in this case that courts may enforce the agreed terms strictly, even if the intention behind the notice is obvious.

Serving Proper Notice: Things to Remember and Pitfalls to Avoid

When receiving or serving notice under a commercial contract, always check the notice clause in the contract, including the following:

  • How notice must be delivered (e.g. by post, email, courier, or hand delivery). When serving notice under a commercial contract, it is important to make sure that notice is delivered using the correct method and sent to the correct address. It is never safe to assume that a particular common method, such as email, will be accepted. Additionally, it is wise to retain evidence of the notice being served in case of a future dispute.
  • When it is deemed effective (e.g. upon receipt, or after a set number of days). When serving notice under commercial contracts, you should ensure that it will be deemed received within the required timeframe. Notice is not always effective immediately upon posting, emailing or leaving it reception; it may only take effect several days later, which could be too late. If you are the one receiving notice, it could be sensible to make a note of when any notice would be deemed received, as well as when you have physically received it, as this may provide you with a few extra days at the end of a notice period.
  • To whom it must be addressed (e.g. a named individual, company secretary, or registered office). Notice clauses often set out addresses for notices but also allow the parties to change those addresses during the contract. Therefore, it is crucial to not only check the notices clause itself but whether you have been notified of any changes.
  • When using carriers, always instruct them to leave the notice at the correct address and take photos showing it was delivered, even if they’re told the recipient has moved. This is important because if the recipient hasn’t informed you of their change of address, the notice may still be considered valid when left at the previous address.
How We Can Help

At Herrington Carmichael, our Commercial team help clients navigate the complexities of commercial notice provisions with precision and confidence. Our services include:

  • Contract review: to identify, clarify, or draft notice requirements;
  • Notice drafting: ensuring compliance with form, timing, and delivery; and
  • Strategic advice: on timing, risk mitigation, and commercial impact.

Whether you’re terminating a supply agreement, exiting via a break clause, or enforcing a contractual right, we ensure your notice is not just served, but served right.

Get in touch today to discuss how we can help you and your business.

Cesare McArdle
Partner, Commercial & Construction
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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