Change Orders in New Jersey Construction Contracts: What Is Enforceable?

© 2024 Ibrahim Ahmed Law Group, P.C. All rights reserved. Original content — unauthorized reproduction prohibited.

Change orders are among the most contested issues in construction litigation. A contractor performs additional work at the owner's direction — but the parties never signed a written change order. The owner refuses to pay. The contractor files a lien. Litigation follows.

Understanding the rules governing change orders in New Jersey can prevent these disputes before they start.

What Is a Change Order?

A change order is a written modification to a construction contract that authorizes a change in the scope of work, adjusts the contract price, or extends the completion schedule. Most standard construction contracts — including AIA forms commonly used in New Jersey — require changes to be authorized in writing before work begins.

The Written Change Order Requirement

Most New Jersey construction contracts contain a "no oral modification" clause requiring all changes to be in writing and signed by both parties. Courts generally enforce these clauses. If a contractor performs additional work without a signed change order, they may have difficulty recovering payment under the contract.

However, there are important exceptions.

When Courts Will Enforce Oral Change Orders

New Jersey courts have recognized several theories under which a contractor may recover for additional work performed without a signed change order:

1. Quantum Meruit (Unjust Enrichment)

Even without a valid contract modification, a contractor may recover the reasonable value of additional work under quantum meruit if: (a) the owner requested or directed the work; (b) the contractor performed the work with a reasonable expectation of payment; and (c) the owner accepted and benefited from the work. The key is that the owner cannot accept the benefit of additional work and then refuse to pay for it.

2. Course of Dealing

If the parties have a history of performing and paying for additional work without signed change orders, a court may find that they have modified the written change order requirement through their course of dealing. This is a fact-specific inquiry.

3. Waiver

An owner who repeatedly approves and pays for additional work without requiring written change orders may be found to have waived the written change order requirement.

Practical Guidance for Contractors

• Always request a written change order before proceeding with additional work. If the owner refuses to sign, send a written notice (email is sufficient) stating: "We are proceeding with [description of work] as directed by [owner/owner's representative] on [date]. The additional cost is $[amount]. Please confirm your authorization."
• Document everything. Photographs, daily logs, and contemporaneous emails are critical evidence in change order disputes.
• Do not rely on verbal assurances. "I'll take care of you" is not a change order.

Practical Guidance for Property Owners

• Never direct additional work without a signed change order. Even casual instructions ("while you're here, can you also...") can create binding obligations.
• Require your contractor to submit change order requests in writing before proceeding.
• Do not accept completed work if you dispute the change order — acceptance of the benefit of the work strengthens the contractor's quantum meruit claim.

The Bottom Line

Change order disputes are preventable. A well-drafted construction contract with clear change order procedures, followed consistently by both parties, eliminates most of the ambiguity that leads to litigation. If a dispute has already arisen, the specific facts — who directed the work, what was said, what was done — will determine the outcome.

This article is for general informational purposes only and does not constitute legal advice. Contact Ibrahim Ahmed Law Group, P.C. for guidance specific to your situation.