Quick Construction Contract Tips: Failure to Properly Document May Waive Extra Work Claims

One of the most important things for contractors to remember is that they must document their delay claims and change order claims and, perhaps more importantly, they must read their contracts.  It seems simple, but for the majority of contractors, especially those who don't have in-house counsel, readying a contract is not always a given. 

One example of a contractor that didn't thoroughly read his contract before performing the work is found in the First Department case of F. Garofolo Elec. Co. v. New York University, 300 A.D.2d 186, 754, N.Y.S.2d 227 (1st Dept. 2002).  In F. Garofolo, the contract specifically required that written extra work statements, countersigned by the construction manager, be produced for each day for which extra work was allegedly performed.  The contract was specific that the extra work order must list the name of each worker, the number of hours worked, the nature and description of the work, and the nature and quantity of materials used.  The Court found that this contractual requirement was precondition to payment and, because the contractor didn't provide the required documentation, the owner was granted summary judgment dismissing the claims.  This was clearly a contract that was well written from the owner's perspective and while not over burdensome on the contractor, it likely did not read the contract and understand the requirements for extra work orders. 

As always, it is strongly recommended that all contractors have their attorney review every contract before signing.  While the review of any attorney is generally better than proceeding without an attorney reviewing, when possible the contractor should attempt to find an attorney familiar with the construction industry so that he or she will: 1) understand the terms of the contract and the interplay of those terms in the field; and 2) will know what conditions are likely to come up and will make sure that the proper provisions are in the contract to protect your rights as much as possible. 

Vincent T. Pallaci is a construction attorney that practices law across the State of New York.  He can be reached at (631) 752-7100 or vtp@nyconstructionlaw.com