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What is the Cardinal Change rule?

The Cardinal Change rule is a provision that sometimes comes into play when contractors are working with government agencies on a project or development. When you work with private individuals and agencies, the contracts you create are supposed to provide protection and structure for everyone involved, but there are often numerous avenues by which you can make alterations to those agreements, especially when everyone is on board with the changes. Government contract structures are much more rigid.

When contracting with government entities, rules and regulations are even more stringent than when contracting with private agencies. It's not enough that everyone involved agrees that a change in scope or definition needs to be made. If the original contract spells something out, then you can't go against what is spelled out until you go through a formal change process.

The formal change process lets you make very specific, precision changes to certain areas of the contract without impacting others. This is important when dealing with government contracts, because there are often long chains of events that could occur with contract changes, and you don't want to kick off a lot of work and changes if they aren't necessary.

A problem arises, however, when scope is changing so much that the contractor needs greater protection than the change system can provide. This is especially true with the customer you are working with is a government agency, which may have some power to leverage over you. The Cardinal Change doctrine comes into play in such a situation, providing the contractor with some protection.

If the contractor can show that a change being requested is a profound and fundamental difference from the original contract, he or she might be able to nullify or significantly alter the original agreement. The burden of that proof does rest on the contractor, though, which is a good reason to work with an experienced construction law professional when you first create or agree to a contract and anytime you feel that the contract is being overstepped by others.

Source: FindLaw, "The Cardinal Change Rule: Is There Any Way To Get Out From Under A Changed Contract?," accessed March 03, 2017

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