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Southeast HVAC News Guest Column

Get All Documents and Agreements Signed Prior to Doing Any Work

by Stuart S. Zisholtz, Esq.
In the past I wrote various articles about how you must get your agreements signed before you do any work. This included the contract, any change orders, purchase orders, etc. I also instructed everyone to review the terms of the contract so that they are clear and unambiguous. It is imperative that you understand the terms and conditions of the agreement as clearly as you understand your bid. 


Recently, a decision was rendered by the Appellate Division, Second Department, which could have lasting effects on the construction industry in New York. In the public sector, a change order will not be paid unless there is a written and authorized change order executed by the parties. 

In the private sector, however, a change order is valid, even if it is oral and the contract directs written C.O. 's, as long as it was authorized and the work performed was outside of the scope of the contract. The rationale for this rule is that the parties may waive any portion of the contract and as long as the work performed is outside of the scope of the contract, the owner should be obligated to pay for it.

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Recently, however, the Court found in a private sector project that where a contract executed between the parties expressly precludes oral extras or change orders not documented in writing and the owner disputes the extras or change orders, the claim may be dismissed. This is the first time that I have come across a decision which dismissed oral change orders where the contract directed that they be in writing. Ramifications of this decision could be severe. 

Most contractors are told in the field to do certain work which is outside of the scope of the contract and the paperwork will follow later on. Many times the paperwork does not follow and you are forced to invoice the change order without having a signed change order. According to this decision, you perform the work at your own peril. While it may cause your job to be performed at a slower pace, it appears that the Courts are now directing that you receive a signed written change order pursuant to the terms of the agreement before you commence with your work. Never let your lien time run out!! 

For a free copy of a pamphlet pertaining to mechanic's liens and payment bond claims, kindly contact me or the Association.



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