In my last blog, I provided an overview of change orders. These important forms document any modifications in the construction project’s original scope of work. Also, change orders fall into one of two main categories:
- Changes with a cost impact
- Changes with no cost impact
Whether an additional expense results from a change order or not, it’s critical that you fill out this paperwork for each alteration. That way, you’ll have a detailed record of every deviation in the job from start to finish.
Requirements For Recovery For A Change Order “Extra”
Now that I’ve outlined these two categories, let’s take a closer look at changes that come with a cost, also known as “extras.” These extras are any modifications in the project that increase the contractor’s bottom line. For this reason, he’s entitled to extra payment.
However, Illinois courts have recently defined the requirements that a contractor must satisfy in order to recover for this type of construction cost. The courts have also been clear about the evidence necessary to confirm that the contractor has satisfied these requirements.
Specific Requirements of an Extra
All of the following five (5) requirements must be satisfied to create a valid extra:
- The extra work was outside of the scope of the contract documents;
- The extra item was ordered by the property owner;
- The owner agreed (by either words or conduct) to pay extra compensation for the extra work;
- The extra work was not furnished by the contractor as a voluntary act; and
- The extra work was not rendered necessary by the fault of the contractor.
Burden of Proof
A contractor who seeks recovery for an extra has the burden of proving the existence of all five (5) of the mandates for this cost increase. Also, the proof must be in the form of clear and convincing evidence. It’s important to note that a general conversation with the owner is not a valid substitute for any one or more of the requirements.
No Presumption of A Right To an Extra
No presumption exists that a contractor is entitled to be paid for an extra on an automatic basis. Instead, the contractor must make his claim for this extra clear, certain and before furnishing the item and/or the additional work.
One Final Note
The construction paperwork is a critical safeguard and should always be examined carefully. So before you sign any agreements, it’s always in your best interest to have an attorney look over the documents and advise you on the most appropriate route to take.
Next time, I’ll explain why it’s so crucial to get approval for any extras prior to performing the work.