CONTRACT CHANGES

During the construction phase, it may become nec-essary to amend the original contract documents with addition, alteration, or deletion as a result of:

● Unforeseen or unexpected events

● New requirements

● New circumstances invalidating parts of the contract documents

The AIA General Conditions provide for changes to be made, but care should be taken to identify the nature of the change sought, and deal with it in the appropriate manner. Changes may fall into the following categories:

● A modification

● A cardinal change

● A constructive change

● A change

● A minor change

● Other forms of change Modifications

At any time during the contract period, the owner and contractor may mutually agree to change the intent or substance of the contract between them. As the contract is a voluntary agreement between the parties, any joint acquiescence as to its content is acceptable, but great care should be taken in the modification of documents and the revised provi-sions for payment, work definition, etc.

Cardinal Changes

If the owner demands a change in the contract documents which goes beyond the intent of the

original contract, this may be construed as a major change or, to use the federal procurement expression, a “cardinal change.” Such a change may give the contractor sufficient justification to stop work and to claim damages for the owner’s breach of contract. In privately funded projects, the contractor may wish to renegotiate payment for a new contract, whereas in publicly sponsored work, it may be necessary to re-advertise the project.

Constructive Changes

“Constructive changes” are referred to in federal procurement projects, and occur when the con-tractor is asked to undertake work:

a. which is different from that required by the contract;

b. which speeds up the project;

c. which requires added expenditures as a result of incorrect specifications.

If forced to make a constructive change, the contractor may require the contract sum to be adjusted accordingly.

Changes

If the AIA contract is used, as long as changes required by the owner are within the general scope of the contract, the contractor will be required to undertake the work, with or without the latter’s consent. The contract time and the contract sum may be adjusted to compensate for the extra work. Payment for changed require-ments could be:

● By mutual agreement on a lump sum

● By unit prices (either agreed upon, or previ-ously stated in the contract documents)

● By an agreed cost of the work plus a fixed or percentage fee

● By determination of the architect Ordering a Change

In the event that time is of the essence and there is absence of agreement on the terms of a Change Order, prior to requiring a change, it is often advisable to establish the final cost of the work involved. AIA Document G709, Proposal Request, may be sent to the contractor to ask for an account of the increased cost and/or time that will be necessary. If the owner decides to continue with the changed requirements, the architect will prepare and sign a Change Order (see page 95) and send it to the owner for signing before pass-ing it on to the contractor.

Under the AIA General Conditions, the Change Order (AIA Document G701) is the only

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AIA Document G711: Architect’s Field Report

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AIA Document G710: Architect’s Supplemental Instructions

acceptable means by which the contract time or the contract sum may be altered. When signing the Change Order, the contractor indicates agreement with the proposed changes and becomes entitled to any justifiable extra payment (see page 89).

In the event that time is of the essence in the contract, and to prevent delay due to the adminis-trative procedures involved, the process may be expedited by use of a Construction Change Directive (A201, Article 7.3). This is not a Change Order, but an authorization to the con-tractor to proceed with the work prior to the issuance of the Change Order.

Minor Changes

When alterations to the contract documents are considered necessary, but are sufficiently small as not to change the contract time or the contract sum, the architect is empowered to order such alterations which are referred to as “minor changes” (AIA Document A201, Article 7.4.1).

Both the owner and the contractor will be bound by such written orders which are usually issued on AIA Document G710, Architect’s Supplemental Instructions (see page 91).

Other Forms of Change

Due to the unpredictable and complex nature of many building projects, certain changes are some-times necessary to provide for specific contingen-cies which include:

● Emergencies (AIA Document A201, Article 4.3.5)

● Concealed conditions (AIA Document A201, Article 4.3.4)

● Escalation and fluctuation of pricing Emergencies

If the safety of persons or property is threatened in any way, the contractor may act at his or her discretion to prevent loss or injury. The architect may then determine the effects of the emergency on the project, and reflect them in a subsequent change order regarding contract time and con-tract sum.

Concealed Conditions

Because of the unpredictable nature of subsurface conditions, some contracts provide remedies to equitably adjust the contract sum and time if con-ditions prove to be materially different from those anticipated. The AIA General Conditions contain such provision, requiring that claims in respect of concealed conditions by either party be made within twenty-one days of their discovery.

Escalation and Fluctuation

Inflation and price escalation may make the esti-mation of a stipulated sum price difficult, possi-bly causing the contractor to overbid to protect against financial loss by erosion of profit. It is pos-sible to add to any contract a fluctuations clause which provides an agreed method of calculation in the event of sudden price variations.