Contract Changes
Construction contracts are unique
because owner can make unilateral
changes to contract (with consideration)
Contract Changes
 Changes in scope require change orders
 Changes in time require delay or acceleration
claims
 Most claims are handled in change orders
 Change orders must be in writing and
confirmed
 Contractor entitled to OHP
Contract Changes
 Document the changes in scope or time
 Estimate costs
 Estimate time
 Submit request for change order per contract
 Get approval (dual or three-way signature)
 Handouts of standard forms
Contract Changes
 Field changes are used when there is no time for
prior approval
 Explain and document (notification clause)
 Architect issues change directive, then contractor
submits claim (court or arbitrator)
 Constructive change for extra work caused by
defective plans and specs or owner
misrepresentation (MSP airport)
 Contractor not responsible for synthesis and
coordination of plans and specs
Contract Changes
 Scope changes are different than constructive
changes- owner adds work
 If scope change becomes excessive, original
contract can be voided
 Contractor entitled to payment after new contract is
agreed to
 Each party must give consideration (prevents
holdings tactics
Contract Changes
 “evidence of writing” required for certain
transactions
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Sale of goods over $500 (UCC)
Scope of work exceeds one year
Involves purchase, lease or mortgage of property
Promises to pay debt of another
Agency contracts
Scope exceeds life of the entity
Agreements on consideration of marriage
Contract Changes
 Owners entitled to change the contract
 Suppliers entitled to consideration, but “preexisting duty” takes precedence
 Promissory estoppel
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Party has given reason to believe payment is due
Other party relied on that promise in conduct
Other party performs work and incurs costs
Contract Changes
 Waiver- any party can agree to relinquish a
right or ignore contract clauses
 Delays
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Inexcusable- contractor pays costs
Excusable- each party absorbs costscontract delays are usually spelled out in contract
 Law delays are granted by court or statute
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Compensatory- owner pays contractor for
additional costs
Contract Changes
 Acceleration claims
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Speed up construction
Increase rate of work
Refusal to grant extension is same as acceleration
claim
Liquidated damages and no damages for delay
clauses are very difficult to enforce (exculpatory)
Notice and documentation are critical
Delays within schedule float are not qualified
(conveying system at MSP airport)