Well, it depends. Client questions and case law abound with questions about change orders and whether they really need to be in writing. Although Nebraska courts have not dealt with the issue in a while, courts around the country have recently addressed this question and it always comes down to the specific facts involved. But, if your contract requires a change order in writing, you would be well advised to ask for the change in writing and receive written approval of that change order.
Recently, the United States District Court in Kansas found that even when a contract calls for written change orders, comments or conduct of the owner can modify that requirement. The court ultimately found that the parties’ course of dealings, and the owner’s verbal approval of change orders, may have waived the written change order requirement.
In that case, the contract required that all change orders must be submitted in writing to the owner and the owner would not be responsible for payment on the change order unless it approved the change order in writing. Of course, the contractor did some extra work and submitted a change order. The owner refused, claiming that the change order was not approved in writing. The contractor argued that the owner often times orally approved change orders and could not now hide behind a strict construction of the written change order language.
Ultimately, the court found that the matter must go to trial because the owner had not consistently required that change orders be in writing. So, it was up to the jury to decide whether the owner had waived the written change order requirement.
Obviously, the owner and contractor were frustrated with the court’s ruling. But, if the parties do not consistently abide by the terms of the contract, the court may find that the terms had been waived.
What’s your policy on change orders? Does it take into account the contract language? Perhaps it should. If you have questions about your change order practices, give me a call.