Slinde Nelson
Email Our Firm

Creating Substitute Construction Contracts

Earlier this week we shed some light on the consequences of cancelling construction contracts. As we noted, things can change in an instant in the construction business, causing us to reconsider the contracts we signed. Fortunately, those changes don't always necessarily lead to contract cancellation.

In certain circumstances, a contract substitute can replace an existing contract in order to account for circumstances we maybe didn't previously consider.

Of course, you can't just force a substitute contract on another party. Everyone must agree the substitute is meant to replace the existing contract. It seems simple, but the law often requires more than just a handshake agreement.

An Oregon Court of Appeals case from last year addressed this very issue. In Rucker v. Rucker, a plaintiff demanded payment based on a first contract, while the defendant insisted a substitute contract changed the payment amount. The Court held that a substitute contract is formed if the intent to substitute the new contract for the existing contract is "clearly shown."

Though the Court didn't set a hard and fast rule for when intent is clearly shown, it noted the parties in that case memorialized their new agreement in writing, as well as their intentions to abide by the new agreement. Additionally, the new contract had terms that rejected claims arising from the prior contract. 

Although the court's ruling applies beyond the construction context, you can imagine how important it is to an industry that operates mostly by handshake agreements. You should always consult a construction law attorney to help you evaluate the effectiveness of your construction contracts, especially when their terms change.

No Comments

Leave a comment
Comment Information

111 Southwest 5th Avenue Suite 1940
Portland, OR 97204

Toll Free: 866-280-7562
Fax: 503-417-4250
Map & Directions

Contact Us to Discover What We Can Do for You

Contact us online using the form below or call us at 866-280-7562 to see how we can put our skills and experience to work for you.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy