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What happens when change orders are not in writing?

| Nov 25, 2013 | Construction Law |

Many construction contracts provide that change orders (additions or subtractions to the original construction scope) must be in writing. While it is clearly recommended that a contractor or subcontractor obtain change orders which are signed by the owner, what happens if changes aren’t in writing? Can the contractor or sub-contractor still obtain payment? Can the owner still obtain a credit? While the answers to these questions aren’t as simple as yes or no, it is possible for both to occur. The Court will consider a number of issues when determining whether the change order is enforceable.

Here are a few examples of what the Court will consider before making is decision:

  • Did the parties discuss the change?
  • Did the parties agree to the change?
  • Did the owner know that additional work was being performed; materials upgraded etc. and not object?
  • Did the owner request or demand additional work upgraded materials, etc?
  • Was the change absolutely necessary to meet code requirements?
  • Was a “lowball” bid submitted by the contractor or subcontractor omitting obviously necessary scope?

Depending on the answers to these questions, payment may be obtained for a change order, even if strong contract language exists that says change orders must be in writing.

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