Residential Construction, Breach of Contract by GC and deductive constructive change orders by Customer

1 month ago

Customer and GC signed contract November 2018, with work expected to start February 2019. Customer contacted GC via email multiple times to get project started and never received a date. July 2019 customer told GC contract was going to be terminated for default. GC asked for meeting and customer agreed. At the meeting customer issued Constructive change order by removing many line items from original contract because customer had to contract others to get essential work done when there was no response from GC. Subsequently to July 2019 meeting and promise to complete job by October 19, 2019, GC has missed 4 promised deadlines for completion, has provided sub-standard work that has been noted and recorded by locality inspectors. GC unilaterally increased price of contract and now demands that customer pay the increased contract price. Can the GC legally do this?

Senior Legal Associate Levelset

A general contractor typically cannot unilaterally increase the contract price. Rather, alterations to the contract should typically be made in writing and agreed to by both parties, and change orders resulting in an increased contract price should be made in writing and explicitly agreed to by the owner.

If there’s a change in the price of materials, cost of subcontractors, or if there’s some other factor that affects the price of performing the work, and if the contract allows for the price to fluctuate based on the relevant factor, then it’s possible for a contractor to raise the price without any input from the owner. But, where the contract states a specific price without anything else to allow for the price to increase, and where an owner doesn’t agree to the increased price, a contractor generally can’t raise the price on their own.

For a little more insight into how best to battle a contractor on price, or on what legal claims may be available for your specific situation, it may be helpful to reach out to one of the Expert Center’s Virginia Payment Experts. They’re all well versed in Virginia construction disputes and can provide some valuable insight.

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