Dealing With Change

By Gerard W. Ittig | May 15, 2012




You’re reading an outdated article. Please go to the recent issues to find up-to-date content.

There is a saying in the law that missing facts cause most litigation. In construction contract disputes, this expression can be refined to missing documents.

In a way, an argument that your requests for extra money should be denied for lack of written notice is inane. After all, the owner ordered the work to be performed, and it got the benefit of its direction. So why should your recovery depend on you telling the owner what it already knows?

The starting point for an analysis of this question is the contract itself. When a dispute over changes shows up in court, the judge must turn to the contract language to decide first what the parties agreed to. Only in rare circumstances can a contractor claim it was coerced into signing, so it is assumed both sides decided, mutually, that whatever documentation or notice requirements contained in the agreement were acceptable.

With this starting point in mind, many courts will not listen attentively to your contention that there were compelling reasons why you did not send a notice. Instead, the court will look, for example, to the changes clause, determine what it was you agreed to do and hear evidence on whether you fulfilled your obligations. If you did not, you lose your claims.

One point to keep in mind in this context is that there is no universal “changes clause.” There are standard clauses in American Institute of Architects (AIA) documents and other widely used forms, but even they are subject to modification by the parties. Each one will have wording that is slightly or largely different from another. One cannot make assumptions about their requirements. Review the language of each new contract you sign.

For this discussion, I picked a changes clause from a major industrial owner: “Buyer shall have the right at any time to require alterations in, additions to and deductions from the Work (“Change”).

“The seller shall not proceed with the Change until Authorized in writing by the Buyer’s representative by a Contract Change Order.

“If the Buyer issues a Bulletin or Field Order describing a Change, the Seller shall submit a written quotation within 14 calendar days. The quotation shall be itemized in sufficient detail to facilitate checking by the Buyer.

“If the Seller shall contend that direction from the Buyer will result in an increased cost of the Work, the Seller shall notify the Buyer’s representative within 4 days of the receipt of such direction.

“It is a condition precedent to the consideration of any claim by the Seller that the provisions of this article be strictly observed.”

Take a few moments to reread this clause, and then answer the following questions:

1. What do you do if the owner changes the sequence of the work?
2. What do you do if owner-supplied equipment is late?
3. What do you do if the owner orally instructs you to proceed with a change without a written order?
4. Generally, are you prepared for the four-day notice option?

Also, ask yourself why the owner wants these procedures and, second, whether they actually benefit you.

Why the owner wants notice/how that benefits the contractor
From a purely practical view, an owner wants to have a clear procedure to bar claims. Whatever notice period is required to be met, the owner would like to think that, after that period has expired, so have any claims that have not been made.
Another owner argument is that, had it known the cost/time impact of the change was significant, it may have decided not to order the changed work or to make a different change.

Owners that are large corporations want to ensure decision-makers are notified of potential increases in costs or extended time for completion. An efficient way of addressing their concern is to require the contractor to send notification in writing to the appropriate owner’s representative.

Where the changes clause requires the contractor to submit details, it is a method of establishing reliable contemporary records if there is a dispute.

These considerations also are good for the contractor. They require you to maintain current, accurate records; can help avoid confusion as to what directions you were or were not given; and ensure your decision-makers are aware of events affecting job costs.

What kind of notice?
Using the sample changes clause above, there are three different procedures for a change. First, the buyer can “require” change (orally or in writing), in which event you should not proceed without a written change order. Apparently, no “notice” from you is needed.

Second, if the buyer issues a bulletin or field order, you have 14 days to submit a written quote, which must be itemized.

Third, if there is a “direction” from the buyer (possibly oral) that you think has a cost impact, you have four days to “notify” (in writing?) the buyer. There is no express requirement that this notice contain an itemized breakdown.
The clause says nothing about field conditions affecting the work, such as delays or lack of coordination.

The question now becomes: Do you really want to have your project manager or foreman analyze each circumstance to decide whether a written 14-day notice, a written four-day notice or a verbal notice should be used? Wouldn’t it be safer to send notices, in writing, with at least some detail every four days throughout the job? Wouldn’t it also make sense to have an internal meeting each week to check for changes?

What happens without notice?
The previously quoted clause uses the term “condition precedent.” In legal terms, this kind of condition must be satisfied. It is a barrier to a claim. Other types of changes clauses state that you have “waived” your claims or that your claims will not be considered. The courts give all of these clauses serious attention.

Where the notice period is missed but a late notice is sent, there is a strong possibility that your claim is not waived so long as the notice is sent with reasonable promptness. But it is a good idea to give your cost estimate (and time estimate) when you send the notice letter.

Note that the “notice” does not have to be by letter. Most changes clauses do not specify the format to be used. A speed memo, an email or a handwritten note may be adequate. An entry in weekly meeting minutes, although typed, may not be sufficient.

To cover the requirements of the changes clause, you may want to consider having a change order form of your own, with instructions to your supervisor to fill it out regularly. There is no penalty for submitting a change request that turns out to be premature or unnecessary.

ITTIG, of Ittig & Ittig, P.C., in Washington, D.C., specializes in construction law. He can be contacted at 202.387.5508, [email protected] and

About The Author

ITTIG, of Ittig & Ittig, P.C., in Washington, D.C., specializes in construction law. He can be contacted at 202.387.5508, [email protected] and





featured Video


New from Lutron: Lumaris tape light

Want an easier way to do tunable white tape light?


Related Articles