The typical Changes clause in a construction contract requires all changed or extra work to be authorized in advance by written, executed contract modifications. Sometimes the parties to the agreement follow this requirement consistently. Sometimes they ignore it. Sometimes they follow it intermittently.
In a recent case, a contractor asked a subcontractor to accelerate its work to make up time lost due to no fault of the sub. The subcontractor expressed concern about the overtime labor costs it would incur. The contractor allegedly agreed to pay the overtime, but there was no written change order to that effect. When the subcontractor attempted to collect, it was out of luck. It was difficult for the sub to argue that the written change order requirement had been waived, as there had been other written changes to the contract, some involving overtime compensation.
What procedures does your organization implement to assure consistent compliance with written change order requirements, and to avoid informal oral directives and “understandings” in the field?
In the upcoming issues of Construction Claims Advisor . . . case summaries and articles covering:
- Oral Agreement to Pay for Acceleration Ruled Unenforceable
- Lienor Trumps Construction Lender Despite Limited Lien Interest
- Protest of Competitor’s Prequalification Was Too Late