Change Order Best Practices
Change orders, when handled improperly, will increase project profitability, reduce the likelihood of construction disputes, and protect the reputation of your business. When disputes do arise, it’s often because of a miscommunication between parties. This can be avoided by taking simple steps to ensure the obligations of both the client and business are clearly communicated.
With that said, our construction dispute attorneys in Jacksonville have outlined some best practices when handling change orders during the course of a project.
1. Double Check your Contract
The first step to effectively dealing with change orders is to review the agreed upon scope of work found within the signed contract. Determine if the changes are, indeed, outside of what you or your business is contractually obligated to complete. If work requested is outside of the scope of work, next, check the contract for a change-order clause. Are there agreed upon terms for how changes to the project should be handled? This step is important because, if a clause is present, it will provide steps for the appropriate way to handle invoicing and payments, adjustments to project timelines, and guidelines for how changes will be executed.
2. Discuss Price Before Completing Work
Our Jacksonville construction dispute attorneys can not stress enough the importance of discussing costs associated with change orders before completing work. This is especially true when changes may appear to be “minor.” A client may assume you will make the requested change at no cost because their is a misunderstanding about the work involved with the request. The best way to avoid potential cost disputes is through open communication to ensure all parties are on the same page.
3. Always Get Change Orders in Writing
While verbal agreements may have some weight in construction disputes, it is essentially your word against the other person’s, and if you and the contracted party have a misunderstanding about the work being completed or the cost associated with the work, you may end up footing the bill. Always put change orders in an addendum that outlines the changes outside of the initial scope, material cost, payments, time, changes to the timeframe, and any other pertinent details. Provide this to your client and do not initiate work until a signed copy is received from an authorized party. If you do the work first and then create the contract and expect payments, the possibility of a dispute will increase significantly.
4. Streamline Change Order Process
Change orders are inevitable, so to avoid disputes, it is always best practice to have a standard change order process in place for your business. Streamlining this process will not only help to avoid disputes, it will also help keep your project on track, as well as allow your business to operate more efficiently. Because change orders are often a point of contingency during a project and commonly a contributing factor to many litigation cases, we recommend working with a construction litigation lawyer in Jacksonville to ensure you are fully protecting the legal best interest of your company.
To schedule a consultation with an experienced attorney from Cotney Construction Law, please call us today at 904.425.5030 or submit our consultation request form.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.