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In Arizona, are we able to adjust the overall contract price when a change order is added?

ArizonaMechanics Lien

The initial contract with our customer included millwork and stone. Weeks later, the customer decided they wanted to add installation, which accounts for close to $150,000.00. Rather than amending the contract, the customer treated the installation as a change order. In this situation, can we include the installation/change order in the original contract price for the job or will we need to treat them as 2 separate jobs for documentation purposes?

2 replies

Oct 20, 2021
This is not a matter of Arizona law. It is purely a question of your contract terms and risk management. So review the contract to change orders and amendments to determine the process to follow. If the contract is not clear then it is best to do a formal amendment or a separate contract. This is too substantial of a change to do this improperly. The best advice is to have a construction attorney review your contract and draft the amendment or change order.
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Oct 20, 2021
If your contract permits change orders, then you should be fine. However, if you have provided a preliminary 20 day notice for the original contract amount and if this change order increases the contract amount more than 30% above the original amount stated in your preliminary 20 day notice, you should amend your 20 day notice to ensure that your collection rights are still protected. As my colleague suggested, you should have a construction attorney review your contract and draft the amendment or change order.
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