Notification of error: Overview, definition, and example
What is notification of error?
Notification of error is when one party formally alerts the other about a mistake or issue—usually in a document, transaction, invoice, or service. It’s a way to say, “Hey, something’s not right here,” and trigger a process to correct it.
This type of clause is common in contracts, especially those involving payments, reporting, or data processing. It often includes a time limit for raising the issue and explains what happens once the error is reported.
Why is notification of error important?
Mistakes happen in business—wrong numbers, missing data, or misapplied charges. A notification of error clause creates a clear process for identifying and fixing those mistakes quickly and fairly.
It helps protect both sides. The party who made the error gets a chance to correct it, and the other party doesn’t get stuck with something that’s clearly wrong. Having a formal notification process also prevents misunderstandings from turning into legal disputes.
Without it, one party might claim they didn’t know about the error—or that it’s too late to fix it. This clause keeps things transparent and accountable.
Understanding notification of error through an example
Let’s say you run a small marketing agency and receive a payment from a client that’s $2,000 short. Your contract includes a notification of error clause that gives you 30 days to report billing issues.
You email the client within a week, pointing out the missing amount and attaching your invoice. Because you followed the notification process and timeline, the client reviews it, realizes the mistake, and sends the balance. Problem solved—no drama, no legal back-and-forth.
But if you’d waited too long to speak up, the client could argue that you missed your window to claim the missing funds.
An example of a notification of error clause
Here’s how a notification of error clause might appear in a contract:
“The Receiving Party shall notify the Providing Party in writing of any error, omission, or discrepancy in any invoice, report, or deliverable within thirty (30) days of receipt. Failure to provide such notice within the stated period shall be deemed acceptance of the item as accurate and complete.”
Conclusion
Notification of error is a simple but powerful way to keep business relationships smooth and transparent. It gives both parties a clear path to fix problems without unnecessary conflict or confusion.
Whether you’re handling money, services, or reports, having a process for flagging and correcting mistakes helps avoid costly misunderstandings—and shows that your business handles issues fairly and professionally.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.