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The rigidity of the contract bidding system begs the question as to what happens when there are changes that are so excessive or extensive in scope as to fundamentally alter the contract to the point that the normal change-order system will not serve to properly protect the contractor. Who bears the brunt of fundamental and unforeseen changes that profoundly change the underlying contractual obligations of the contractor? How does the contractor protect itself from significant owner overreaching in these situations? How does the contractor prevent itself from being bound to an obligation that it never undertook in the first place?

The Cardinal Change doctrine, founded in government contract law, has evolved in response to this situation. The rule permits the contractor to disregard the provisions of the contract where there has been a change or series of changes so profound to change the very nature of the contract. It essentially establishes a limit to an otherwise unlimited ability of the owner to direct a contractor to perform additional work.

Since the late 1930's, the law has developed significantly in this area, allowing government contractors to circumvent the often slavish formalism of government contract clauses where the nature of the contractual undertaking has been fundamentally changed. The doctrine's expansion makes it a powerful weapon against harsh contract clauses that would otherwise permit the owner to force the contractor to decide between breach and performance.

The contractor should be forewarned, however, that the remedy of the Cardinal Change Doctrine is not given freely. The contractor bears the heavy burden in demonstrating that the change was a fundamental and profound change. As with any (and almost every) construction contract, there are disputes as to the scope of work and changes that really have no significant effect on the outcome of the contractual obligations of the parties. These type of disputes are easily remedied by contractual provisions devoted to such problems and are not within the purview of the doctrine. Instead, the Cardinal Change doctrine applies only to those contracts that have been so fundamentally changed that the present undertakings of the contractor bear no likeness to those as originally undertaken.

In sum, the Cardinal Change Rule provides contractors limited protection against the owner.s excessive changes. The contractor, however, must be aware that invoking its protections is a risky, and at best, requires a case-by-case analysis affording little predictive value as to outcome. Obviously, before invoking its protections, the contractor must carefully weigh its options and review its contract with counsel to determine whether the doctrine may apply.