Of the many problems that contractors must struggle with, probably none are adownsmore common than change orders and extra work. Most construction contracts require a written authorization for change orders and extra work. Courts generally hold that a contractor who fails to obtain a written change order will not be paid for that work.
In the recent case of Charles T. Driscoll Masonry Reconstruction Company v. County of Ulster, the appellate court addressed a claim for work performed where there were no written change orders.
Charles T. Driscoll Masonry Reconstruction Company was awarded a contract by the County of Ulster for the completion of specified work, including window installation, sealant replacement, and External Foam Insulation System (“EFIS”) repair and painting. The contract specifically called for written change orders authorizing the work. Shortly after Driscoll began the work, the County complained of a lack of uniformity in the application of the sealant over the EFIS control joints. After several meetings to address this and other issues, it was verbally agreed that the contractor would perform a sample application using a different sealant and technique to accomplish the aesthetic qualities desired by the County. Though the County accepted the new sealant, it again complained about the manner in which the sealant was being applied by Driscoll. After the contractor twice recaulked the building in an attempt to alleviate the County’s concerns, the County informed Driscoll that it was terminating the contract.
Upon failing to receive payment for the amount claimed due, the contractor commenced an action seeking payment under the parties’ contract. Following a trial, the court found that the County breached the contract by wrongfully terminating Driscoll. The court also held that the contractor completed 80% of the work required under the contract, which was valued at $67,716.00, and that Driscoll was owed $34,860.00 for additional work performed at the County’s request.
The County appealed, arguing that the contract’s specific requirement for the use of written change orders precluded the award of damages beyond the contract price and any written change order work. The contractor argued that the County waived the requirement of a written change order by verbally agreeing that the recaulking should be performed.
The appellate court ruled in favor of the County. The court held that although clauses requiring a written change order can be waived by the parties, the clause was not waived in this instance. To waive the clause, the court stated that the conduct of the parties must demonstrate an indisputable mutual departure from the written agreement, that the changes were clearly requested by the County, and completed by the contractor. Here, the court stated that Driscoll was simply repeating work contemplated by the contract in an effort to satisfy the County’s complaints with the quality of the contractor’s work. The court was unwilling to find waiver where there was no evidence that the County intended to compensate Driscoll for the extra work performed, even though there was a need for the work.
The court also relied heavily on the fact that during the same time period, the contractor obtained at least two written change orders authorizing additional masonry and joint repair. According to the court, the written change orders demonstrated a continued intent by the parties to require that contract changes be in writing.
When the contract requires changes and extras to be in writing, courts generally hold that a contractor who fails to obtain a written change order will not be paid for that work. The prudent contractor should obtain a written order in the form specified by the contract prior to performing the changes or extra work. As shown in this case, the failure to do so can result in a contractor’s failure to recover for the changes and extra work performed.