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Is it ever a good tactic for a Contractor to refuse to execute a change until there is resolution for payment?

CaliforniaChange Orders

Is it ever a good tactic for a Contractor to refuse to execute a change (stop work on change) until there is resolution to payment for the work? Along the same thought process, is there a contractual clause that should be avoided or a clause that should be added to protect the Contractor in this situation?

1 reply

May 27, 2020
 

Sometimes. If you have an abusive owner or a set of design documents that are so poor that you feel like you’re financing the project through change orders that are not foreseeable or at a  volume that was not foreseeable, then you may want to take that step. However you really need to look at the contract to see what it requires you to do if the owner directs the change. Now there’s a distinction between a change being required because of a design change or something like that an owner directive for a change. The burden to show that there was a change is generally on the contractor of a required change or the subject of a change order. However, a change directive from the owner already resolves the question of entitlement for the change. The only thing left to do at that point is figure out how much it costs. So under the standard AIA form, you may not be able to stop work on a change if it is issued pursuant to a construction change directive. So it really, again, it really depends on what the contract says, but absent any direction on this particular item there is no obligation to perform change work just by common law.

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