The answer to this question is usually found within the parties’ contract. [Side note: always have a contract, those handshake or verbal agreements are usually more likely to end up in a dispute – do not learn this the hard way]. Within
As a contractor, you must be prepared for such contingencies arising and you must have a process for submitting change orders. An agreed upon change order is usually the only way that a contractor can seek additional compensation. This generally requires that the contractor provide notice to the owner upon discovering the unforeseen circumstance. These contingencies must also be something that was unexpected and not initially bid or anticipated by the contractor. Contracts require an element of good faith, and thus, a contractor cannot conjure up frivolous “unforeseen” circumstances. Any such dishonest act by the contractor may invoke a claim for a Consumer Protection Act violation (RCW 19.86).
Given the foregoing, it is clearly understandable why bidding a project is not an easy process for contractors. Building projects can take months if not years to complete. During such time, costs of labor and materials fluctuate. Weather is inconsistent. Subcontractors and material suppliers are not always on the same page with one another. Building fads change… and hence owners change their minds. Yet, all the while the general contractor must be fully prepared, upfront and in advance, for all such fluctuations and contingencies when bidding on a project. Thus, it is important for a contractor and an owner to have a game plan for these contingencies within their contract.