Contractors May Need to Formally “Invoice” All Costs to Protect Interest Rates
In any construction project, when changes, modifications, alterations, or deviations are ordered, the risk for delays and extra costs is high. Contractors obligated to implement and supply those changes are vulnerable, incurring costs that may not be paid timely or even paid at all. As a result, contractors often include “extra cost” and “interest rate” provisions in their contract to cover ordered changes and untimely paid invoices. However, despite performing the extra work—and despite late payment, a contractor may not be entitled to a contracted interest rate if the contractor does not properly submit a formal “invoice.”
In the recent unpublished opinion Cascade Concrete Industries, Inc. v. Central Washington Asphalt, Inc., et al. (Case No. 40429-3-III), dated December 23, 2025, the Division Three Washington State Court of Appeals reminds all contractors how important it is to know and follow every word of your written contract—especially when changes are ordered and payments are late.
Cascade Concrete Industries, Inc. v. Central Washington Asphalt, Inc., et al. involves a major highway contract where Central Washington Asphalt, Inc (“CWA”) hired Cascade Concrete Industries, Inc. (“Cascade”) to supply sound barrier walls. The contract between CWA and Cascade required CWA to pay Cascade for extra costs associated with alterations/deviations to the wall. If CWA failed to timely pay an invoice, a 1.5 percent monthly (or 18 percent annual) interest charge would be applied.
CWA repeatedly directed Cascade to deviate from its standard method of making the sound barrier walls, and the president of Cascade informed CWA’s president of operations that, as a result of the deviations, CWA would be responsible for additional costs. The issue of additional costs was not resolved, and Cascade sued CWA. While construction on the project and litigation were ongoing, Cascade submitted a 78-page document to CWA with pages titled “INITIAL BID,” “BID PRICE,” and “OVERRUNS.” A comprehensive billing statement for the additional costs Cascade claimed was prepared after the project completion.
At trial, the jury found in favor of Cascade, but the trial court declined to award Cascade any prejudgment interest and limited postjudgment interest to the statutory rate of 12 percent (instead of the contracted 18 percent rate) because the trial court found that Cascade did not “invoice” CWA sufficient to trigger the contract’s interest rate provision.
The Division Three Washington Court of Appeals examined the issue of whether the contract requirement that a 1.5 percent interest charge would be applied to “invoices” CWA failed to timely pay was triggered by the costs submitted to CWA through Cascade’s Initial Bid, Bid Price, Overrun Statements, estimates, and preliminary final costs used to submit a claim.
The Court of Appeals focused on the contract’s use of the word “invoice” in the contract. The contract did not provide a definition for the word “invoice”; therefore, the Court of Appeals turned to Webster’s Dictionary and agreed with the trial court’s finding that invoice, in this matter, was a “document showing what you must pay.”
Neither the trial court, nor the Court of Appeals, were convinced that estimate, bid prices, initial bids, overrun statements, or preliminary final cost statements rose to the level of a “document showing what you must pay.”
As a result, the Court of Appeals affirmed the trial court and found that Cascade was not entitled to prejudgment interest and was not entitled to the 18% percent postjudgment rate because Cascade never submitted an “invoice” to CWA.
Many contractors sitting in Cascade’s position will likely view this outcome as simply wrong and a classic case of ‘form over substance.’ In reality, contractors like Cascade go above and beyond to get the job done and rarely slow a project down to review the details of the contract and consult their attorneys with regard to definition of every word. Regardless, this unpublished opinion highlights foundational principles of contract law—i.e., when two parties reduce their agreement to writing, courts will generally uphold those agreed terms.
Put another way, when it comes to written contracts, the details matter—each word can matter. For contractors (general contractors, subcontractors, suppliers, etc.), the key takeaway from this unpublished opinion is to know what your contract says and requires, and to follow the contract terms carefully—especially in the moments when changes, modifications, alterations, or deviations occur, or when a payment is late.
Our lawyers draft, advise, litigate and negotiate construction contracts for project owners, general contractors, and subcontractors at every level. please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100 for any assistance drafting a contract, understanding what your contract says, or enforcing your rights under a contract.