Change-order disputes are among the most common and costly issues in construction litigation. Contractors and subcontractors often seek additional compensation because work changed, expanded, or became more difficult than originally anticipated. Owners and general contractors, by contrast, often rely on contractual notice and change-order procedures to argue that additional payment is not owed unless those procedures were followed.
Change-order disputes often turn on a simple but critical question: did the party seeking additional compensation comply with the contract’s notice and approval procedures? A recent ruling in Kinetic Sys., Inc. v. IPS-Integrated Project Servs., LLC, No. 20-CV-1125-SM, 2024 WL 449845,(D.N.H. Feb. 6, 2024), provides a strong example of a court enforcing detailed change-order requirements in a sophisticated commercial construction dispute. However, as highlighted in a later decision in RJH Builders, LLC v. Thistle, No. 2024-0530, 2026 WL 1552105, (N.H. June 2, 2026), parties can waive change order requirements through inconsistent conduct.
The Kinetic Systems Decision
Kinetic Systems arose from a commercial construction project of a manufacturing facility in Portsmouth, New Hampshire. Defendant Integrated Project Services (“IPS”) served as the general contractor and hired Kinetic Systems as a subcontractor to perform mechanical and process-systems work. The parties’ relationship was governed by a lump-sum subcontracts containing detailed provisions for changes in work, adjustments to price and time, progress payments, releases, and dispute resolution.
During the project, Kinetic Systems sought nearly $14 million in additional compensation for alleged extra work. Several of the disputed claims were tied to change proposals submitted after the work had already been performed. The terms of the subcontract required Kinetic Systems to submit written change proposals before performing changed work. The subcontracts further provided that the failure to comply with the timing requirements waived Kinetic Systems’ right to additional compensation or time. IPS rejected several of Kinetic Systems’ proposals, in whole or in part, as untimely.
Why the Court Enforced the Change-Order Requirements
Kinetic Systems argued that IPS waived the timing requirements by directing work, pushing the schedule, negotiating disputed claims, and paying some amounts after the work was completed. The court rejected those arguments, finding that the parties generally followed the process laid out in the subcontract, which demonstrated that the parties understood and used the agreed-upon procedures when they chose to seek adjustments to the contract.
The court also distinguished between waiver and the parties’ contractual dispute resolution process where change orders were submitted and rejected as untimely, but later negations resulted in payment. IPS’s later negotiations over disputed change proposals did not show that it had abandoned or waived the contract’s timing requirements. Rather, the negotiations were consistent with the subcontracts’ dispute-resolution procedures.
Ultimately, the court enforced the contract as written, because IPS had not acted as though the change-order process was optional. It rejected untimely claims, relied on the contract language, and treated later negotiations as part of the contractual dispute resolution process, not as a waiver of the notice requirements.
A Different Result: RJH Builders, LLC v. Thistle
The New Hampshire Supreme Court reached a different conclusion in RJH Builders, LLC because both sides repeatedly disregarded the change-order process during the project. There, a residential construction contract required written change orders, but the homeowners repeatedly requested extra work informally, the contractor performed that work without signed change orders, and the homeowners paid at least one invoice for undocumented extras. That mutual course of conduct supported waiver, even though the contract contained written waiver protections.
Practical Takeaways
Kinetic Systems reinforces that courts will enforce detailed change-order and claim-notice provisions when the parties act consistently with the contract. The decision is especially important for sophisticated commercial projects, where courts are more likely to hold parties to negotiated procedures for pricing, notice, authorization, and dispute resolution. RJH Builders does not undermine that principle. It shows the opposite side of the same rule: parties who repeatedly proceed outside the contract may lose the right to later enforce the contract’s formal change-order requirements.
The lesson is straightforward. Contract language matters, but project conduct matters as well. Parties preserve change-order rights by following the contract in real time, not by invoking it only after a payment dispute arises. As such contractors and owners seeking to avoid a finding that the carefully crafted change order provisions in their contracts have been waived should focus on avoiding the following:
- Negotiating disputed claims without reserving contractual defenses.
- Repeatedly ignoring the contract’s change-order process during performance.
- Waiting until litigation to insist on strict compliance.
Charles M. Wallen is a litigation and construction attorney who focuses on construction-related disputes, insurance coverage matters, and contract enforcement, helping clients navigate complex challenges with a practical, strategic approach. He can be reached at [email protected].
Bernstein Shur’s Construction Group helps developers, contractors, and construction professionals manage risk and keep projects on track at every stage of the project lifecycle. The group provides sophisticated legal solutions spanning contract negotiation, project administration, dispute avoidance, and litigation, drawing on deep experience in the construction industry.