Reference no: EM133347546

"We Are Developers, LLC" purchased a 33-acre lot and hired "We Are Architects, PA" to design a $ 150MM private construction project for luxury apartments. After a private bidding process, "We Are Builders, Inc." was selected as the General Contractor. The project is carried out in 3 phases, the construction of the first phase began while the architects continued to design the 2nd and 3rd phases. The contract specifies that modified orders must be authorized in writing by the owner before being implemented.

Every Monday morning, representatives and decision-makers from all the parties involved in the project conduct a project meeting. In this meeting, all project problems and matters are discussed and project status reports are made.

After the project began, the Contractor received a change order submitted by the architect to change the façade of the apartments, resulting in a $ 5MM increase in project cost. The Contractor made the necessary changes. When the Contractor submitted the invoices for the services rendered, the owner refused to pay for the additional costs and argued that the Contractor had not complied with the change order clause in the construction contract.

1. Is the owner's assessment correct? Explain.

2. What legal principle the Contractor may present to sustain his claim of the validity of his work?

3. After analyzing the contract and the facts, what your recommendation to the owner would be?