Contractor May Recover Cumulative Impact Damages from Multiple Changes
Kegler Brown Construction Newsletter May 1, 2000
Many change order forms, including those utilized by most public authorities, provide that all direct and indirect costs associated with the change are extinguished by signing the change order. Many contractors believe it is inequitable and impractical to expect a contractor to understand the full impact of the change or "ripple effect" without knowing what changes will follow. Some contractors will attempt to limit the language in such change orders by adding "reservation of rights" language excluding the cumulative impact of multiple change orders.
A recent Veteran's Administration Court of Appeals decision held that such change orders did not extinguish the contractor's right to claim for "indirect" or "cumulative impact" damages in that a cumulative impact is a separate constructive change to the contract that would survive general release language in the individual change orders. Centex Beteson Construction Co., Inc., VABCA - 4613.