Construction Contracts - Backcharges
This is a classic scenario that either a General Contractor or Subcontractor is routinely faced with when a governing body, such as a Municipality, changes the design plans which may increase the project costs to the General and/or Subcontractor. In this matter, the Plaintiff-Subcontractor failed to carefully document its increased costs and to issue a Change Order to Defendant-General Contractor prior to performing the work. As a result, the Plaintiff-Subcontractor was not awarded the additional $32,000.00 which it sought upon completion of the Project. As such, all General or Subcontractor(s) should be forewarned to carefully document any Change Orders in prosecuting contract work so that they may be properly compensated for it by either the Owner or the General Contractor. In the absence of an approved, signed Change Order, it is likely that the General/Subcontractor would be held to the original plans and specifications even though a Governing Body may have made changes to the original design and/or plans. The practical application of this case is that documentation of any changes and/or revisions is essential to preserving your rights to obtain increased compensation.
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