Oral Modifications to Construction Contracts, Florida Construction Law
Many written contracts between contractors and owners contain provisions to the effect of “all modifications to this contract must be made in writing.” And when litigation invariably arises from non-payment for modifications that are performed without being reduced to a written change order, or other writing, a defendant will likely first attempt to dismiss a lawsuit seeking payment for such modifications based on the written contract’s “no oral modification” provision. These attempts at dismissal will likely fail.
The situation described above occurs more often than one might think. When Owners and Contractors are on good terms during the course of performance of the Project, it is common for changes to be requested, and generally such requests are not in writing. One common argument, is that the changes are not modifications to the existing contract work but “extras,” or additional work not modifications to an already existing scope of work, thereby avoiding the “no oral modification” provision of the Contract.
In any event, even if the modification is not for extras, Courts are not that callous, and will enforce oral modifications despite a no oral modification clause if it would be equitable to do so. This is especially the case when the Owner accepted the work, watched its performance, and sat back and tacitly approved of the same.
See Florida 4th DCA case on point with relevant portions reproduced below.
J. LYNN CONSTRUCTION, INC., a Florida corporation, Appellant,
The FAIRWAYS AT BOCA GOLF & TENNIS CONDOMINIUM ASSOCIATION, INC., a Florida not for profit corporation, Appellee.
Nos. 4D06-3437, 4D06-3997. July 5, 2007. Rehearing Denied Sept. 10, 2007.
Written contracts can be modified by sub- sequent oral agreement of the parties even though the written contract purports to prohibit such modification.
Written contracts can be modified by sub- sequent oral agreement of the parties even though the written contract purports to prohibit such modification. Fid. and Deposit Co. of Md. v. Tom Murphy Constr. Co., 674 F.2d 880, 884 (11th Cir.1982); Pan Am. Eng’g Co., Inc. v. Poncho’s Constr. Co., 387 So.2d 1052, 1053 (Fla. 5th DCA 1980). In King Partitions & Drywall, Inc., v. Don- ner Enterprises, Inc., 464 So.2d 715, 716 (Fla. 4th DCA 1985) (quoting Prof’l Ins. Corp. v. Cahill, 90 So.2d 916, 918 (Fla.1956)), this court held:
[a] written contract may be altered or modified by an oral agreement if the letter has been accepted and acted upon by the parties in such manner as would work a fraud on either party to refuse to enforce it An oral modification under these circumstances is permissible even though there was in the written contract a provision prohibiting its alteration except in writing.
Id. at 716 (citations omitted).
The trial court’s reliance on the parol evidence rule in precluding evidence of waiver, estoppel and reliance, thereby finding the contract otherwise clear and unambiguous, is misplaced. “The parol evidence rule applies to verbal agreements between the parties to a written contract which are made before or at the time of execution of the contract. It does not apply to the admission of subsequent oral agreements that alter, modify, or change the former existing agreement between the parties.” Pavolini v. Williams, 915 So.2d 251, 254 (Fla. 5th DCA 2005).