Can a Pennsylvania Contractor Sue for Unpaid Change Orders?

Construction projects rarely proceed exactly as originally planned. A property owner may request additional work, plans may change, or unexpected conditions may require a contractor to perform work beyond the original scope. When that happens, a change order can modify the contractor’s obligations and the amount the owner must pay. But what happens when a contractor completes the additional work and the owner refuses to pay?

In Pennsylvania, a contractor may have legal options to pursue payment for an unpaid change order. However, the strength of the claim can depend heavily on the construction contract, the change order procedure, and the evidence showing that the additional work was authorized.

What Is a Construction Change Order?

A change order generally modifies the original construction agreement by adding, removing, or changing work. It may address additional materials, labor, project requirements, costs, or completion time.

The original contract is particularly important because it often establishes exactly how changes must be requested and approved. Some construction contracts require written change orders signed by specific parties before additional work begins. Other agreements may contain different procedures for handling changes.

Pennsylvania courts have recognized that parties can modify a written contract through subsequent agreements or conduct in certain circumstances. However, contractors should not assume that performing additional work automatically guarantees payment. The specific language of the contract and the facts surrounding the change are critical.

Can a Contractor Sue for an Unpaid Change Order in Pennsylvania?

Yes. If a valid change order became part of the parties’ agreement and the contractor performed the additional work, the contractor may have a breach of contract claim when the owner fails to pay.

For private construction projects, Pennsylvania’s Contractor and Subcontractor Payment Act, commonly known as CASPA, may also provide important protections. Under 73 P.S. § 501 et seq., owners generally must pay contractors according to the construction contract. When the contract does not establish payment terms, the statute provides rules governing progress and final payments. The law also provides for interest in certain circumstances when payments are not timely made.

Whether CASPA applies to a particular unpaid change order can depend on the circumstances and the underlying contract. Contractors should therefore evaluate the entire payment dispute rather than assuming every unpaid amount is automatically covered.

Why Written Documentation Matters

Documentation can make a significant difference when a contractor seeks payment for additional work. Contractors should retain copies of the original contract, approved change orders, requests for additional work, project correspondence, invoices, photographs, daily logs, estimates, and records showing who authorized the work.

This is especially important when an owner disputes whether the additional work was actually approved. Pennsylvania case law has emphasized the importance of following contractual procedures for change orders, particularly in public construction contracts. Public contracts can impose especially strict requirements concerning written authorization, and failing to follow those requirements can jeopardize a contractor’s ability to recover additional compensation.

What Should a Contractor Do When a Change Order Is Not Paid?

A contractor facing an unpaid change order should first review the contract and determine whether all required notice and approval procedures were followed. The contractor should also document the work performed and the amount owed and determine whether the dispute may be subject to CASPA, a payment bond, arbitration, or litigation.

Construction disputes can become more complicated when an owner claims that the additional work was unauthorized or included within the original contract price. Getting legal advice before the dispute escalates can help a contractor understand available remedies and preserve important claims.

Talk to a Pennsylvania Construction Lawyer

An unpaid change order can represent a substantial amount of money and can affect a contractor’s cash flow and ability to complete a project. Beckley & Madden, LLC represents contractors and other participants in construction disputes throughout Harrisburg and Central Pennsylvania. If you are dealing with an unpaid change order or another construction payment dispute, contact Beckley & Madden, LLC to discuss your situation and learn about your legal options.