JETCO Construction Inc. v. EA Engineering, Science & Technology, Inc.
In a recent Appellate Division case, the Appellant Division discussed the interplay between direct contract interpretation as compared to work performed by a Subcontractor without a written Change Order. As has occurred many times in the past, the Court once again ruled in favor of strict contract construction instead of allowing arguments of equity to carry the day for the Subcontractor. In this matter, the Subcontractor failed to obtain a Change Order for site conditions which it believed differed from those pursuant to the original plans and specifications and performed work without receiving authorization pursuant to a written Change Order, and thereafter, attempted to bill for the increased costs. This claim was denied by the General Contractor, and thereafter, the Subcontractor sued for these increased costs. In ruling in favor of the General Contractor, the Court stated that the Contract must be strictly construed and if a written Change Order is required than no work must be paid unless this process is followed. The practical application of this case is that either a General Contractor or Subcontractor should follow the Contract carefully and obtain prior approval for any additional work instead of relying upon a clause in the Contract which may authorize said work without a Change Order. In other words, it is best to document rather than to guess.
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