Commercial contracts require many things in order to achieve their maximum potential successful usefulness. One component to this maximization is making sure that you understand exactly what your commercial contract does, and does not, require of you. What are the situations in which your agreement requires a written modification? What are the situations in which you can proceed without a written modification? Being wrong about the answers to these questions can cost you thousands or even millions of dollars. In other words, it is essential to be right, which is one of many reasons why it is imperative to have knowledgeable Florida business counsel representing your interests.
As an example, consider this case from here in Miami-Dade County. A Miami painting business signed on to serve as a subcontractor that would provide painting and waterproofing services on a public building project in the Overtown neighborhood of Miami. Problems emerged when the building owner, Miami-Dade County, decided that it wanted the waterproofing work done in a particular manner not previously contemplated by the contractor or subcontractor. Meeting this added demand was more time-intensive and, therefore, more costly.
The subcontractor sent the contractor a change order for $95,100 for the extra work that was required. The contractor sent it to the county, but the county rejected it. The project architect expressly refused to approve the change order, contending that the more time-intensive work demand was “within the scope of the construction documents,” which would mean that the county was not required to pay the demanded extra sum.
The subcontractor then sued the contractor’s surety. The case went to trial and the jury ruled for the subcontractor and awarded it $91,900.
The surety appealed, but the subcontractor again emerged successful. The surety made the argument that the subcontractor was only entitled to be paid if it and the contractor had created and executed a modification to the original agreement, which the two sides undisputedly had not done. The appeals court rejected that argument, concluding that this interpretation was not actually what the contract demanded. The subcontractor was entitled to proceed even in the absence of a written modification.
This point of contention between this contractor and subcontractor is something that highlights the importance of understanding exactly what your commercial contract does, and does not, demand of you. With different contract language, the subcontractor might have been obliged to execute a modification before completing, and demanding payment for, the extra work. What this subcontractor understood, however, was that its agreement, as written, did not require a written contract modification, but only required a written document, signed by the contractor, directing the subcontractor to perform the extra work. Armed with that documentation, the subcontractor understood that it was entitled to go forward with work and to do what was necessary to obtain payment for the totality of the work it did.
For advice and representation that you can rely upon in relation to your commercial contract issues, consult the experienced South Florida business and commercial attorneys at Stok Kon + Braverman. Our knowledgeable team has what it takes to help you protect your interests.
Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can best help you.
More blog posts:
Piercing the Corporate Veil in Florida to Obtain the Damages Owed to You Under a Breach of Contract Judgment, Florida Business Lawyers Blog, Oct. 29, 2018
Subcontractor Loses Contract Interpretation Argument But Wins Recovery on Unpaid Invoice in Florida Mansion Renovation Dispute, Florida Business Lawyers Blog, Aug. 18, 2017