9.2 Changing the Contract

• Library: Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

9.2 CHANGING THE CONTRACT

9.201 Common Reasons for Changes. While changes to a contract may be unusual in other contexts, they are an expected part of construction contracts. The owner or contractor may discover design flaws or unexpected conditions, or the owner may decide to use different materials. Any number of factors may indicate a need to change the original contract, and there are many mechanisms, both formal and informal, that permit such changes.

9.202 Amendments. A construction contract can be modified like any other contract. The parties must agree to the modification, and no modification can occur until there is a "meeting of the minds" in which the parties fully agree on the terms of the amendment. ²² Often the original agreement has specific requirements for amendment. For example, the contract may require that the modification be in writing and be signed by an officer. The parties should comply with such requirements, but in some circumstances an amendment may occur despite a failure to fully comply with express requirements. ²³

9.203 Change Orders. Most construction contracts permit an owner to unilaterally change the project. The mechanism for changing the requirements of a contract is often a "change order." ²⁴ The right to issue a change order, and any terms and conditions for such changes, is established in the original contract. The AIA, EJCDC, and AGC provide forms for change orders. Any change order should, at a minimum, detail the changes made, any adjustment to time for completing the project, and any change to compensation. It should also affirm the remainder of the contract and require the consent of the owner, contractor, and any surety.

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9.204 Additional Work. The owner may request the contractor to perform additional work on the project. Generally, additional work means work outside the scope of the original contract and exceeding the limits of any change orders. The owner and the contractor may enter into a supplemental agreement to perform the extra work and the terms of compensation for the additional work.

In Cardinal Development Co. v. Stanley Construction Co., ²⁵ the contractor sought additional funds because the developer had requested more work and had promised to pay for that work. The developer sought to limit the contractor to its original fixed price contract. The Virginia Supreme Court found in favor of the contractor, despite the lack of any express agreement to modify the original contract. The court ruled that the parties "intended to modify the terms of their contract and that Cardinal agreed to pay for the additional work that Stanley Construction had performed." ²⁶

9.205 Waiver. A contract may be changed when one party...