In the reality of working on a construction project, from time to time a contractor may proceed with additional work without following the change order procedure outlined in the parties’ agreement. This often happens where the trade contractor contracts directly with an owner/developer who is not involved in the day to day operations. Where a construction manager is involved, it may fall on the construction manager to fulfill those day to day responsibilities such as directing additional work, signing off on additional work and reviewing payment requisitions. An issue that often arises is if the construction manager directs and signs off on change orders but the contract requires the owner/developer’s signature, is the trade contractor simply out of luck and is not entitled to payment for the additional work?

It may depend on what the contractor was told and the representations made by the construction manager on the project. Where the construction manager and/or owner/developer represented that the construction manager had authority to direct and approve additional work and the contractor reasonably believed that the construction manager was authorized to take these actions, there may be an apparent authority argument which would allow the contractor to pursue payment for change orders agreed to and executed by the construction manager even though the contractor deviated from the contract. While this analysis is fact sensitive, this may be a potential avenue for a contractor to argue it is entitled to payment for additional work approved on the project.