What happens when change orders are not in writing?
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.