THE LAW AND CIVIL ENGINEERING – AUGUST 2020 NEWSLETTER
Excessive Changes Can Result in Abandonment of the Contract
by Eugene Bass
A subcontractor on a pulp and paper mill project filed suit against the general contractor for the claimed balance due for the work. The legal theories for the suit included breach of contract and reasonable value of the work.
The original subcontract was for about 3.0 million dollars. The extras totaled approximately 1.6 million dollars and there were nearly 2000 special invoices and billings for the extras.
The subcontractor contended that the job was completely redesigned after the contract was entered. A supplier of materials to the job said that he had never seen anything comparable to the changes ordered on the project; that the project was the most poorly engineered and designed that he had ever seen; and that this poor engineering resulted in enormous changes and was contrary to normal and reasonable construction practices when the owner requests a lump sum contract.
There was evidence at the trial that it was inconceivable that anyone could expect a contractor to anticipate the many changes that were made in the drawings. The final drawings differed markedly from the bid drawings substantially increasing the cost of the work.
Because of the vast number of changes to the work there was an issue at the trial as to whether the original contract had been abandoned by the parties.
Where a contract is deemed to have been abandoned by the parties, the original contract price no longer governs the work. After an abandonment, the subcontractor would be entitled to receive all it’s costs, overhead, and profit and it would not be necessary to prove all the individual changes arising from each asserted breach of the original agreement.
This article is intended only to provide general information regarding legal issues. It is not to be relied upon for legal advice. Contact your attorney for advice and guidance on general and specific legal issues.