Change orders in construction contracts

Contractors in Colorado may be familiar with the need to adjust a construction contract. The change may arise because the owner wants to go a different way with a design or building element. Or, it may be because of external factors that affect the timetable for completing the work, among other issues.

The American Bar Association notes that construction projects are dynamic and complex, and it is virtually impossible to anticipate and address every variable in the original contract.

Changes in the work clause

One way to address unanticipated changes is to include a clause in the contract that allows for revising the scope of the contractor’s work. The owner and contractor agree to a “changes in the work” clause that defines the process for addressing changes.

Construction change directive

The owner may have the option to change the work even without the contractor’s express agreement through a construction change directive. If the two parties do not agree to the scope, time and price of the changes, the architect will determine them. These changes often do not favor the contractor, but failing to perform the work in a CCD constitutes a breach of contract.

Cardinal change doctrine

Fortunately for contractors, the owner does not have unlimited reach when it comes to the scope of work changes. The cardinal change doctrine prevents owners from making changes to the scope of work that alters the fundamentals of the original agreement so much that forcing the contractor to complete them would constitute a breach of contract by the owner.

The ABA notes that the drawings and specifications sections of the construction contract generally describe the scope of work.