Reasons Why a Change Order May Be Necessary Part 2
Change orders are often at the root of disputes during projects, this is why it’s important to have a change order process in place. A streamlined process will allow you to operate the project more efficiently. The process should be standard and straightforward to avoid disputes. This concludes are two-part series. Head over to part one to learn more.
The Best Way to Handle Change Orders
Avoiding change orders is all about being proactive. The best way to deal with them and reduce their likelihood is before you begin the project.
Always Review Your Contract
Review the scope of work found within the signed contract to determine if the changes are inside or outside the scope of work. Next review your change order clause. The clause will outline the steps to take to issue, administer, and approve the change order.
Get Change Orders in Writing
Most contracts make it clear that change orders should be put in writing; however, that is not always followed. When it comes to construction, it’s wise to get everything in writing, period. Identify who’s authorized to make changes and who can bind a contracting party. When drafting a change order include the date, a description of the work to be performed, the price, the estimated time it will take to complete the work, and exceptions or objections as to what is being resolved by the change order or extra. Getting a change order in writing with everyone’s signatures will eliminate confusion.
Discuss Pricing Before Starting the Work
No matter how big or small the changes, our Miami construction attorneys recommend that you know and discuss the costs of the changes that need to be completed. Within the change order clause, contracts typically provide several different methods for pricing change orders including a unit price, lump sum price, and cost plus fee.
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.