Two subcontractors sued general contractor Brown & Root for unpaid scope changes on the Dulles Toll Road Extension project. Brown & Root had signed a secret side letter acknowledging that design changes would happen, but hid this from lenders and subcontractors while keeping the prime contract as fixed-price. The court ruled against the subcontractors, finding that Brown & Root cannot recover for changes it concealed and that the fixed-price contract terms control—not hidden side agreements.
Never rely on verbal promises or side letters from your general contractor about scope changes. Get all changes documented in writing and approved by the project owner and lender.
If your GC tries to hide anticipated changes from lenders or the owner, that's a red flag. You could lose payment rights if the arrangement unravels, even if the work was done.
Demand that change orders flow down from the prime contract to your subcontract. A GC cannot use a secret side letter to override your fixed-price terms and then deny you payment.