Sometimes during a construction project, unforeseen changes can come up, for any of a number of reasons. In most situations, when the scale of the project doesn’t diverge too much from the initial contract, these can often be accommodated via change orders.
However, sometimes the entire scope of the project changes so dramatically that the cardinal change doctrine, which legally limits the amount a plan can be altered, should be invoked.
What Is the Cardinal Change Doctrine?
A “cardinal change” is something that so fundamentally changes the scope of the contract that it doesn’t fall under normal change order clauses or protocols. The “cardinal change doctrine” protects contractors from contractual obligations that are too far out of scope versus what was initially agreed upon.
Simply put, this doctrine limits a development owner’s ability to radically alter the scope of a project partway through. In some cases, these changes can constitute a material breach of contract, freeing the contractor from these overwhelming obligations.
What Constitutes a Cardinal Change?
There is no specific definition of a cardinal change. Cardinal changes can be made up of one massive change, or a large quantity of smaller changes that, when combined, drastically alter the scope of a contract.
Cardinal changes may significantly increase the amount of work that has to be performed; they may make major changes to the type of work initially agreed upon in the original contract; and they may increase the cost of work for the contractor greatly past the initial estimation. Any and all of these are grounds to bring out the cardinal change doctrine.
What To Do if a Customer Requests Major Changes
If a customer requests major changes that could possibly fall under the cardinal change doctrine, there are a few steps the contractor should take before resorting to more drastic measures.
Discuss the situation with the customer.
Under normal circumstances, and with a reasonable customer, this should be the first step. Show them as much of your position as you’re comfortable with. Explain the extra costs of this change, and why it doesn’t fit into the initially agreed-upon plan. They may not fully be aware of how much extra work they’re really asking for.
It’s easy to overestimate how much information the general public has on the costs incurred by contractors. What may be a huge deal in reality, may not even cross their mind as a problem.
See if you can reach a middle ground.
If they’re dead set on the changes as-is, see if you can still work something out. So long as you can still fit the new work into your schedule, perhaps a new contract is in order. If they’re willing to compensate you properly for the additional project, then it is often best to go with their wishes. Change orders that account for the additional costs incurred by the builder should suffice.
Accept or reject the requested changes.
If properly paid and accounted for, accepting the changes is usually the easiest course of action.
However, you may also be within your rights to reject the changes if they constitute cardinal changes, and the contract can’t reasonably be altered to accommodate it.
Though this situation can be very frustrating, avoid walking off the job outright if this is the case. This can create a liability for you. However, if the customer terminates the contract after rejecting a change request, then it becomes becomes a cardinal change. Here, they’re likely to be the ones in breach of contract.
Consult an attorney.
If you have any doubts at all whether a client request constitutes a cardinal change, contact an attorney. Courts prefer the letter of the contract before anything else, and having someone well-versed in these matters can help you feel confident in your decision and let you know what your options are.
The Cardinal Change Doctrine Protects You from Unreasonable Client Demands
First and foremost the most important thing you can do is make sure every proposed change, rejected or accepted, is well documented in case things escalate to the legal process. It can be the difference between an open and shut case of cardinal change, or a lengthy battle in court.
Changes inevitably occur in many projects, ranging from delays to additional material costs which can very quickly eat into your bottom line. It’s difficult to keep track of all this on your own, especially on complicated projects with a disagreement between you and the owner.
Another option is to let software take care of this for you.
This is why we created Trak Changes. It helps make sure that any change orders are executed and documented clearly. No need to worry about a missing signature or accidentally forgetting a piece of paperwork anymore – Trak Changes keeps it all together in one intuitive interface.
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