Things Left Unsaid – Determining Price Adjustment resulting from Scope Changes

It's common for the parties to a construction contract to focus on the price of the work to be performed. Less attention is often given to the method of calculating changes to the price for alterations to the scope of work. Uncertainty in this area can lead to a major headache for a contractor trying to get paid, which all too often can lead to a trip (or two) to the Court house. So how can you avoid costly litigation and ensure you are paid for your work? We focus on the recent Alberta case of Architectural Millwork & Door Installations Inc v Provincial Store Fixtures Ltd, 2017 ABQB 390 to provide some helpful tips.

Architectural Millwork & Door Installations Inc v Provincial Store Fixtures Ltd, involved a $19 million stipulated-price contract for the performance of tenant improvements in The Bow tower in downtown Calgary. The owner issued three Change Directives significantly reducing the contractor's scope of work, and the parties found themselves disagreeing