Chapter 11.3 LIMITATIONS ON THE OWNER'S RIGHT TO ORDER CHANGES

• Jurisdiction: Washington

§ 11.3 LIMITATIONS ON THE OWNER'S RIGHT TO ORDER CHANGES

There are limitations on the power of the owner to order changes. The person or persons ordering the change must have the requisite authority to issue the change order and the changes clause, which usually limits such orders to those "within the general scope of the contract," must encompass the proposed change. In public contracts, the use of the clause is further limited as a result of competitive bidding. McHugh v. City of Tacoma, 76 Wash. 127, 140, 135 P. 1011 (1913).

[Page 11-3]

(1) Authority to issue change orders

The contract documents generally delineate the authority to issue change orders. AIA201 General Conditions §7.1.2 requires that the owner, contractor, and architect all execute a change order. In U.S. government contracts, the contracting officer may unilaterally order a contract change. Also, under WSDOT contracts, the "contracting agency" may at any time change the work; presumably this includes the WSDOT project engineer.

It is essential, from the contractor's perspective, to make sure that the person issuing the change order has the requisite authority under the contract to do so. West v. Jarvi, 44 Wn.2d 241, 245, 266 P.2d 1040 (1954). Courts have enforced provisions restricting authority to order changes. Appeal of AAAA Enters., Inc., ASBCA No. 28555, 85-1 BCA (CCH) ¶17828 (Nov. 30, 1984) (contractor could not recover for installation of bolts as directed by the site inspector; only the contracting officer could authorize the change).

Determination of an agency relationship is not controlled by the manner in which the parties contractually described their relationship. It can also be implied from the parties' actions. As stated in Rho Co. v. Dept. of Revenue, 113 Wn.2d 561, 782 P.2d 986 (1989):

An agency relationship, of course, may arise without an express understanding between the principal and the agent that it be created. It does not depend upon an express undertaking between them that the relationship exists. If, under the circumstances, the parties by their conduct have created an agency in fact, then it exists in law.

In this regard, agency is a legal concept that depends on the manifest conduct of the parties; it "does not depend upon the intent of the parties to create it[.]" ... [A]gency can be implied, if the facts so warrant, not only if the contracts are silent as to agency, but even if the parties execute contracts expressly disavowing the creation of an agency relationship.

Id. at 570 (citations omitted). When the contract is silent, an architect and its subconsultants are not general agents of his or her employer and have no implied authority to make a new contract or alter an existing one for the employer. Absher Constr. Co. v. Kent Sch. Dist., 77 Wn. App. 137, 143...