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No Written Change Orders

Authored by attorney Kevin Rust

Most construction contracts have provisions that bar any payment for work outside the scope of the contract unless there is a written change order.  All contractual provisions, at least in North Carolina, may be waived.  Thus, even if your contract provides that no additional work will be paid without a written change order, a party can still waive that provision by their conduct.  This is true even if there is an additional provision that says no waiver is permitted absent a second written contract. 

A case I was involved with several years ago had just this exact type of contract – that is, one that prohibited extra work and stated that no provision may be waived (absent a written waiver).  My client was the subcontractor, and according to him, he and his crew had performed over $100,000 in extra work done at the request of the general contractor.  Unfortunately for my client, none of the additional work was accompanied by a written change order. 

The defendant’s counsel moved for summary judgment (which would have thrown our case out if he won), arguing that the contract explicitly stated that written change orders were required in order for any extra work to get paid, and that none existed.  Opposing counsel was right about that.  What he did not know though, was that we had found a “smoking gun” email in which the general contractor sent my client an email telling him to do certain extra work or he would be kicked off the project.  That one email was sufficient evidence (along with my client’s statements) that the contractual provisions had been waived, and that oral change orders were now acceptable based upon the parties’ “course of performance.” 

Having said all of that, you may not be lucky enough to have the type of email that we had in this case.  (And it took us dozens of hours to mine through thousands of emails). So what should you do? Document, document, document.  You must, if at all possible, recite what is being required of you in a letter or email back to the general contractor (or whomever is directing the work).  If you do not do so, or are unable to do so, it may be best to reevaluate your position on the project and contact legal counsel as soon as possible.  If you don’t, you may end up in a situation where you are out of money with no real hopes of getting paid for the work that you have done.  Courts do not look favorably upon claims that require a writing, and none exist.  As such, the best salutation is to deal with the problem immediately.  Or as I was told by a mentor of mine many times: Bad news has to travel fast. 

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