Changes in Trenchless Construction Contracts and the Protection Afforded to Subcontractors under Contract Law

Changes are common in construction projects and are primarily due to design changes or owner-directed changes. On average, 35% of projects experience at least one major change during construction. Changes can occur at any stage of the construction process, can be caused by a range of factors, and can have far reaching implications on project cost and schedule. Since most trenchless companies generally operate as subcontractors on construction projects, it is important to understand how these changes impact subcontract performance. Through an extensive review of literature and some court cases in the U.S., this paper analyzes some of the risks and protections afforded to trenchless subcontractors under contract law. A significant finding is that the prime contractor is not required by law to subcontract with the listed subcontractor if the work to be subcontracted has been changed substantially or deleted by a change order. Another finding is that a subcontractor can use the third-party beneficiary theory to recover damages from the owner even in the absence of contractual privity. Finally, subcontractors must be wary of exculpatory clauses in the contract that may undercut their efforts to recover damages. It is expedient and imperative for trenchless subcontractors to be aware of these legal provisions and how they can leverage them to protect their companies from loss.