112 Extra Work

• Jurisdiction: Arizona

(a) Authorization

Extra work involving extra compensation may be orally authorized, even if the written contract provides exactly the opposite. A defense is that the authorizing party lacks the necessary authority, as with architects and state employees.

It is quite common for an owner or an owner’s representative to want more work done during the course of the job than that contemplated in the written contract between the parties. The reckoning comes when the contractor, having performed this extra work, demands more compensation than that provided for in a fixed price contract. Or, in a cost-plus contract, the costs might significantly exceed the contractor’s initial estimate, on which the owner relied.

In general, extra work involving extra compensation may be orally authorized, even if the written contract between the parties provides exactly the opposite, unless the authorizing party lacks the necessary authority. In Sitkin v. Smith, 35 Ariz. 226, 276 P. 521 (1929), the contractor agreed to build a home for the owner. The owner was charged more than the contract amount, and the contractor justified this on the basis of oral changes in the work to be done, which were agreed upon during construction. The contract provided:

(Should the owner at any time during the progress of the work request any alterations, or additions to or deviations or omissions from the work included in the specifications, such request shall be acceded to by the contractor and the same shall in no way affect or make void the contract. No such alterations, additions, deviations or omissions which affect the price or the time for completion as agreed upon shall be done, however, without a written order from the owner.)

Id. at 229.

Such provisions are common in building contracts and generally benefit the owner. The owner, in this case, did not rely on the provisions and admitted giving oral orders for changes. The court held that an owner who makes an oral request waives the provision of the contract requiring changes to be in writing. If the owner wishes to enforce that provision of the contract, it must do so at the time of the change.

The opposite result may be reached if the person requesting the extra work lacks authorization. In Massachusetts Bonding & Ins. Co. v. Lentz, 40 Ariz. 46, 9 P.2d 408 (1932), compensation was sought for extra work orally authorized by the architect, who was supervising the work for the owner. The contract provided that extra work would not be compensated unless it was approved in writing by the owner or the architect. If it was approved by the architect, then such writing would have to specify that the owner had authorized...