Understanding Contractual Obligations
Contract documents and precedence
The exam tests whether you can find the obligation before you argue about it. Contract documents usually include the agreement, general and supplementary conditions, drawings, specifications, addenda, schedule, and written modifications. The contract states an order of precedence; when documents conflict, follow that order and issue an RFI rather than choosing the cheapest interpretation. Scope includes work reasonably inferable from the documents, not only what is drawn. Substitution requests, or-equal products, and mockups require written approval. Flow-down clauses bind the installer to obligations in the owner-contractor agreement, including notice, insurance, and warranty terms.
Notice, changes, and payment
Read notice periods for delays, differing site conditions, and claims. A field directive or email from a superintendent may be a constructive change, but it is not a signed change order. Send written notice within the stated period, price the work before proceeding when possible, and if directed to proceed, state in writing that you are doing so under protest and reserve rights. Payment clauses matter: pay-when-paid and pay-if-paid are not the same. Retainage, lien rights, and final payment conditions should be known before mobilization.
Worked example
A superintendent orally directs 800 sf of extra lobby tile. The contract says changes require a written modification signed by the owner, and notice within seven days. The installer sends an email the same day confirming the direction, stating the work is outside scope, and reserving the right to price it. The installer proceeds, keeps a daily time-and-material ticket signed by the superintendent, and submits a priced change order on day five. The email is not a signed modification, but it creates contemporaneous notice. Entitlement then depends on the change clause, the owner's direction, and whether the work was truly outside the contract. Without the notice and ticket, the same work could become unpaid betterment.
Traps that cost marks
- Relying on a verbal promise to pay later.
- Missing a notice deadline because the office waited for final payment.
- Ignoring addenda issued before bid.
- Assuming pay-if-paid language means the same as pay-when-paid.
- Starting extra work without a written price or reservation.
- Failing to flow down insurance and warranty duties to subcrews.