Excessive Changes to Contract Can Justify Abandonment Claim Even if Contract is Completed; Abandonment Damages May Be Calculated According to Total Cost

C. Norman Peterson Co. v. Container Corp. of Am., 172 Cal. App. 3d 628 (1985)

In this case, Container Corporation of America appealed from a trial court judgment in favor of contractor C. Norman Peterson Company (“CNP”).  CCA had hired CNP to perform work to modernize a paper mill.  During the performance of the contract, numerous errors and changes to plan resulted in significant delays and extra costs.  CNP sued for the extra costs associated with the project, claiming the extra costs were caused by CCA’s excessive changes to the plan.  CCA argued that both parties were aware at the time the contract was formed that the plan would require significant revisions.  The trial court found for CNP, holding that CCA’s excessive changes after the project was commenced constituted breach of contract and abandonment.  CNP was allowed to recover its total costs expended and lost profit. CCA appealed.

The court of appeals affirmed the judgment, finding that there was substantial evidence that the change orders and extra work imposed by CCA were of such a magnitude as to change the scope of the work originally contemplated under the contract.  The court of appeal held that the imposition of excessive changes to a construction contract could support a finding of abandonment even if the contract was completed, and that an award based upon total cost was appropriate because the excessive changes prevented the CNP from keeping accurate cost records.