What is a Cardinal Change in a Construction Contract?
Changes to a construction contract are a part of doing business in most cases. Therefore, parties to a construction contract almost always have the right to make change orders. However, there are often limitations to the changes that can be requested and made. Parties to a construction contract should be familiar with what a permitted change is, and what an impermissible “cardinal change” is.
Construction contracts should contain what is often called a “contract changes” provision where the parties outline the types of permitted contract changes. These changes are usually limited by the general scope of work provided for in the construction contract.
A cardinal change, on the other hand, is a change that falls outside of the permitted changes detailed in the contract. It is a deviation so far outside the scope of work that it frustrates the very purpose of the contract and invalidates the terms of the original contract. If a property owner makes a cardinal change order, a contractor could have a basis for damages in a construction contract.
For example, imagine a construction contract in which an owner enters into an agreement with a contractor for the construction of a pool. The original plans for call for a snow cone stand next to the pool. If the owner requests that the pool be removed from the contract, this would violate the purpose of the original contract. This cardinal change order would frustrate the purpose of the contract so much that it could invalidate the contract.
On the other hand, if the owner requests that the construction of the pool continues, only without the snow cone stand, the original purpose in constructing a pool would not be violated, and that would be a permissible change. Here, if the contractor refuses to continue work because he is upset the snow cone stand is being taken out of the plans, the contractor could be held liable for breach of contract. Whether or not the snow cone stand change order would constitute a cardinal change would depend on the unique circumstances surrounding the agreement between the parties.
If you have questions about construction contract claims, consult an experienced attorney. Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business, real estate, construction and property claims. Contact us at (310) 277-7747 to see how we can help you with your business, real estate or construction law needs.