| Changes in the work or claims for
changes in the work are where we see the greatest
volume of problems. As a practical matter, problems
and changed circumstances which were not foreseen
at the time the parties signed the contract will
arise during every construction project. A changes
clause provides the vehicle by which, without
breaching the original contract, changes can be
ordered to add work, correct errors in the specifications,
or improve the quality of materials or methods
of construction.
In an ideal setting the parties
will abide by their original agreement and all
changes will be incorporated smoothly into the
basic contract work. Contractors should be compensated
fully and fairly for the changes, and the time
allowed in the construction schedule adjusted
accordingly. Unfortunately, many projects fail
to meet this ideal model. Since changes are bound
to occur, the wise contractor will be prepared
and will be armed with the necessary legal tools
to handle these inevitable situations.
In all construction disputes the
express written provisions of the contract provide
the key to the rights and liabilities of the parties.
Accordingly, with respect to changes, these written
provisions usually will dictate which party has
the basic authority to alter the method, price
or schedule of the work. It is critical that the
contractor make certain that the person issuing
a change order has authority under the contract
to do so and that the method specified in the
contract is followed carefully. While courts are
often liberal in interpreting the factual circumstances
of a particular case in order to allow compensation,
the prudent contractor always will follow the
written procedural requirements of the contract
and rely on "what is fair" only as a fall-back
argument.
Florida courts will generally enforce
written provisions restricting the authority to
order changes. At times the parties' course of
dealings may authorize changes even where the
actions conflict with the written provisions in
the contract.
Oral change orders present a particularly
difficult problem. Assuming the proper party has
authorized the change, most construction contracts
require the contractor to obtain written authority
to proceed with extra work assuming additional
compensation is expected. Unwary contractors occasionally
lose money by performing additional work which
the change is orally requested under assurances
that the contractor would be compensated. When
the contract states that change orders must be
in writing a contractor should not perform any
additional work until presented with a properly
signed written order. Generally, if the language
is clear, concise and unambiguous, this "written
change" requirement will be enforceable under
Florida law.
Despite the general rule that courts
will enforce contracts requiring written change
orders, some courts find the general rule unfair.
Accordingly, certain unique situations will enable
contractors to recover costs for work performed
under an oral change order.
The courts address such situations
by using several different legal theories to find
that an owner has waived his right to insist that
change orders appear in writing. As with the "authority"
issue referenced earlier, courts will rely on
the prior course of dealings between the parties
when deciding whether an owner has waived the
written change order requirement. In one case,
the court held that because the owner orally ordered
the work to be done, and voluntarily paid for
six of the additional work items, the parties
had waived the contract provisions requiring written
change orders.
Despite these "waiver" situations,
contractors should always request change orders
in writing when the contract so requires. As a
practical matter a short letter or memorandum
usually will satisfy the written change order
requirements.
Notice of changes is another problem
area. Most change provisions also require that
the contractor provide written notice of its claim
within a specified period of time. Florida courts
usually uphold such notice requirements. This
condition precedent, however, may be waived by
the parties during the course of performance of
the contract.
Changes are a problem area for everyone
involved in the construction industry. Proper
notice, written authorization and documentation
of costs are the critical elements of any change
order.
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