EXCEPTIONS TO THE WRITTEN CHANGE ORDER REQUIREMENT

By: Randall Gilbert, Esq. ♦

♦ Randall L. Gilbert, was born in Miami, Florida, has argued to the Supreme Court of Florida and the District Courts of Appeal, Recipient of the National Institute of Trial Advocacy Award, 2003. Florida Certified Master Plumbing Contractor’s license, 1993; Member of Attorneys’ Title Fund, Vice Chairman of the Broward County Construction Lawyer's Association, 2005-2006; Broward County Bar Association; Licensed Florida Real Estate Agent, 2005; Admitted to Florida Bar, 1999, Practices in U.S. District Court, Southern and Northern Districts of Florida, 2000. Education: University of Florida (B.A., 1996); Nova Southeastern University, Shepard Broad Law Center (J.D., 1999). Practice Areas: Construction Litigation; Commercial Litigation; Contracts; Corporate; Appeals, and Real Property. Email: Randall L. Gilbert

 Firm Profile: The Firm counsels the construction industry primarily dealing with all sizes of State and Federal litigation and arbitration. Typical claims include licensure, construction liens and bonds, Non-payment, DBPR complaints, bidding, delays, defects, contract preparation and negotiation. 

QUESTION

UNDER WHAT CIRCUMSTANCES IS RECEIPT OF A "WRITTEN" CHANGE ORDER NOT A CONDITION PRECEDENT TO A CONTRACTOR RECEIVING COMPENSATIONS FOR ADDITIONAL OR EXTRA WORK PERFORMED BY THE CONTRACTOR WHEN THE WRITTEN CONTRACT PROVIDES THAT THE CHANGE ORDER MUST BE IN WRITING?

BRIEF ANSWER

1. Waiver of liability for the extras,

2. Owner defaults compelling Contractor to perform additional work,

3. The work is mandated or necessitated by the Health Department,

4. The extra materials were necessitated through the act or omission of the owner or his agent in preparing erroneous plans and specifications.

5. Extras made out of necessity in order to conform to the contract and specifications

6. Extra work done in addition a construction contract when there is no condition that extras be in writing, e.g. an oral construction contract.

LEGAL ANALYSIS

Where a written change order had not been executed by the parties, and although the contract provided that any changes or extras should be agreed to and in writing, the court held this requirement waived, when the owner did not dispute the liability for the extra but merely the price. E.g. Forest Construction Inc. V. Farell-Chjeek Steel Co., Fla. Diversified Properties Division, (Fla. 2nd DCA 1986) (Owner waived contract requirement that change order for extras be in writing where Owner accepted 130 tons of asphalt at $180 per ton and then a second installment of 381.15 tons, objecting only to the price of the second installment); Broderick v. Overhead Door Co. of Fort Lauderdale, Inc., 117 So. 2d 240 (Fla. 2d DCA 1959); Pan American Engineering Co., Inc. v. Poncho's Construction Co., 387 So. 2d 1052 (Fla. 5th DCA 1980) see also, Charlotte H. & N. R. o. v. Burwell, 56, Fla. 217, 48 So. 213 (1908) (waiver may be shown by subsequent course of dealings between the parties).

In a case involving a subcontractor and supplier against the prime and owner of the construction project, the Fourth District carved out Three exceptions to the strict writing requirement that extra work be authorized in writing. See, Acquisition Corp. of America v. American Cast Iron Pipe Co., 543 So. 2d 878 (Fla. 4th DCA 1989).

First, despite the subs failure to conform to the strict writing conditions of the contract, additional compensation and extra expenses were awarded “where a default by the owner or its agent compels the contractor to perform additional work in order to conform the contract plans.” Id. at 880. The court found that because the general contractor had improperly prepared the construction site, the extra work caused by the improper site preparation was recoverable, even absent written authorization. Id. "Such [extra] work is not an alteration or addition to the contract which is required to be in writing as contemplated by the terms of the contract." Id; see also, City of Miami v. Nat Harrison Associates, Inc., 313 so. 2d 99, 100 (Fla. 3rd DCA 1975) cert. Denied, 330 So. 2d 15 (Fla. 1976) (concluding that extras work performed by contractor was not addition or alteration of the plans, because the City/owner failed to furnish the contractor with the required engineering and survey data called for in the contract, thus the "repairs, replacements and extra work which were performed by the contractor primarily were made out of necessity in order to conform to the contract and specifications").

Second, recovery for "extras," despite the written authorization, has also been fashioned by the courts where the other extra charges and extras were mandated or necessitated by the Health Department. See Acquisition Corp. of America, 543 at 881; Diana Stores Corp. v. M. & M. Electric Co., 108 So. 2d 486 (Fla. 3d DCA 1959); William Zeigler & Son v. Chicago Northwestern Development Co., 71 Ill.App.3d 276, 27 Ill.Dec. 383, 389 N.E. 2d 195 (1979); see also Annotation Effect of Stipulation, In private Building or Construction Contract, that Alterations or Extras Must be Ordered in Writing, 2 A.L.R.3d 620, at 643 (1965).

Third, although the contract limited the subcontractor to providing labor and materials only in accordance with the quantities and materials listed on the plans the court still allowed recovery for extra materials expended. See, Acquisition Corp. of America, 543 So. 2d at 879. After terminating the job, the sub realized that the “summary of quantities” in the contract underestimated the amount of materials by almost two tons of extra fittings. Because the sub bid the job and formed the contract based upon the plans and specifications, which were in error, and even though the contract was for a stipulated amount/quantity, “the subcontractor may still recover for these extra materials necessitated through the act or omission of the owner or his agent in preparing the erroneous summary of quantities.” Id. at 881; 13 Am.Jur.2d Building and Construction Contracts § 19 (1964); cf. City of Miami v. Nat Harrison Associates, Inc., 313 So. 2d 99 (Fla. 3d DCA 1975).

However, the court in Acquisition Corp. denied recovery for extras where prior to construction commencing, the sub failed to make claim for the extra work in writing, and the contract required the same be in writing, despite there being several increases in material and labor required under revised plans. Id. at 880. see also, Southern Roadbuilders, Inc. v. Lee County, 495 So. 2d 189 (Fla. 2d DCA 1986), rev. denied, 504 So. 2d 768 (Fla. 1987).

Finally, in an oral cost-plus contract entered into between a contractor and owner for the repair and remodeling of a residential house, and which the owners requested changes from the original plans requiring extra costs, Florida's Supreme Court stated that, “when parties enter into an agreement or contract for construction work and during the progress thereof alterations or changes are requested in the form of extras and otherwise, then the law implies an obligation to pay the reasonable costs thereof in addition to the stipulated sum named by the parties in the original agreement.” See De Lotto v. Fennell et ux., 56 So. 2d 518, 520 (Fla. 1952). Therefore, the price of extras should be computed at reasonable rates, and “[w]here not otherwise agreed upon, a plaintiff should submit proof as to the reasonable value of labor and services, including supervision, and materials actually furnished a defendant.” Broderick v. Overhead Door Company of Fort Lauderdale, Inc., 117 So. 2d 240, 243 (Fla. 2nd DCA 1959) In summary, it thus seems that when there is no condition that extras be in writing, then the courts will treat the extras as a modification to the original contract and compute the price at a reasonable value.

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