Legal Aspects of Oral Change Orders

Abstract

This paper describes the legal aspects of oral change orders or directives. It provides basic criteria for an owner, contract administrator, or contractor to determine if an oral directive is valid, entitling the contractor to additional compensation. The criteria are based on common law rules extracted from a review of more than 70 appellate court cases. The rules provide that for an oral directive to be valid, there must be no statutes requiring a written change, the owner must have knowledge of the work, and he must know that the contractor is expecting compensation for the additional work. A promise to pay cannot be rescinded. Other aspects discussed include proper or apparent authority and waiver. The case law review revealed substantial consistency in the application of these rules, and no discernible differences were found between the public and private sectors. The rules are arranged in an easy‐to‐follow flowchart, and numerous case citations are included. Recommended practices are also included.