Do you ever find yourself negotiating with the general for changes to the work? Even though you are discussing these changes with the very person or entity requesting the changes, you may still have to provide written notice of the changes if the changes increase the contract price.
A recent case out of Virginia involves this very situation. In that case, the subcontract obligated the subcontractor to provide written notice within fifteen days of becoming aware of a changed condition that could affect the contract price. The subcontractor worked with the general and settled on an alternative flooring system. But, the subcontractor did not provide formal notice of any increased costs associated with that change.
The subcontractor demanded the increased costs associated with the changes. The general responded that the subcontractor did not provide written notice of the increased costs, as required by the contract. The subcontractor countered that because the general had actual notice of the change, and in fact directed the change, formal notice was not required.
The parties could not resolve their differences and the subcontractor filed suit. The court ruled in favor of the contractor, finding that the contract barred any claims for an increase in the contract price unless notice was provided within the prescribed time period.
This may seem like an unfair result, given the general contractor’s involvement in the change. But, the contract did state that formal notice must be provided for any cost increase. The better course would have been for the subcontractor to submit notice of the cost increase as set forth in the contract and avoid the litigation entirely. Of course, this presumes the subcontractor knew what the notice requirements were. Do you know what your notice obligations are?
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