Oral or Written Change Orders

Parties to a contract should always document change orders in writing. Contracts sometimes require that they be in writing. Courts have considered the effect of an oral modification of a contract with differing results. One argument asserts that written notice is not required if there is actual notice of the circumstances giving rise to the dispute. See Medical Clinic Bd. v. Smelley, 408 So.2d 1203 (Ala. 1981) (written notice can be waived if there is actual notice); see, also Commercial Contractors, Inc. v. U.S. Fidelity & Guaranty Co., 524 F.2d 944, 952, (5th Cir. 1975) (applying Alabama law) (finding that a written executory construction contract may be modified by a subsequent oral agreement, despite a provision in the contract that all modifications be in writing); but see Chemical Construction Corp. v. Continental Engineering Ltd., 407 F.2d 989 (5th Cir. 1969) (refusing to allow an equitable adjustment of a contractor’s price when the contractor did not follow the exact provisions of the changes clause).