Requirement for Change Orders in Writing

Generally, all orders for change or extra work in an existing construction contract must be in writing and signed by the property owner and architect, or other designated party.  The purpose of this strict writing requirement is to prevent the property owner from being taken advantage of and being required to pay unexpected costs or unjustified claims for additional compensation not previously agreed to.  Failure to put provisions for extra work into the contract can be fatal to a claim for additional compensation, as was the case in De Foe Corp. v. City of New York, 95 A.D.2d 793, 463 N.Y.S.2d 508 (2d Dept. 1983), where a contractor performing the installation of city water mains failed to comply with a contract requirement that, in performing extra work for which there had been no agreement as to price or in performing disputed work, he must submit daily records concerning material and labor involved, waived any request for compensation for such extra work.

Like other contractual provisions, however, the writing requirement may be waived by the contracting parties, assuming they have the authority to do so.  A party can waive a writing requirement inserted for its own protection, and may do so by oral order, acquiescence, or by conduct.

Probably the simplest way to waive the writing requirement, but also the most difficult way to ensure compensation for extra work is a change order created by oral agreement.  The court may find that the property owner accepted the extra work done, was benefitted by it and should therefore compensate the contractor for said work.  However, it is best to avoid oral agreements and confirm all oral discussions in writing to avoid a contractor not getting paid for agreed upon extra work or an owner being forced to pay extra for work he did not want done.

Another way a contractor can complete extra work without executing a written change order and assume he is going to be compensated for it is in light of the property owner’s acquiescence.  Although wise to put any changes in writing to avoid future contention, if a property owner does not object to the cost of extra work done, and pays for the work without objection, there is a good chance a later challenge to this work will be dismissed.

Lastly, the parties’ conduct alone may be enough to establish a waiver of a writing requirement for additional work.  For example, in Joseph F. Egan, Inc. v. City of New York, 17 N.Y.2d 902, 68 N.Y.S.2d 301 (1966), the testimony established that work was usually done before the issuance of change orders and that such work was either disputed work from the beginning, meaning if not immediately disputed, the work was presumed to be accepted.   In light of this course of conduct, the court found that the parties intended for the extra work to be done and compensated for.

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