Strategies for Avoiding Change Order Problems
In today’s construction industry environment, you can’t take anything for granted. More than ever, construction contractors need to uphold a high standard of quality and integrity to ensure they eliminate unnecessary disputes. When contractors fail to perform work without following established change order procedures, disputes are bound to happen. Following are strategies to help contractors avoid change order problems.
Our Jacksonville construction lawyers have seen many disputes happen because of an ill-defined scope of work. To cover yourself, before starting any additional work, communicate the change to the party responsible for performing it and make it clear that a change order is required before work begins. The party doing the work needs to know if it is within or beyond the scope of the contract.
Choose the Right Agreement
Avoid open-ended change orders. It’s important to decide on a fixed sum agreement or a time and materials agreement. With fix sum, the owner and contractor will know the agreed upon sum before performing the work. This will eliminate any surprises with costs. However, with a time and materials agreement, contractors charge for work and materials as they go. Unfortunately, the contractor would risk incurring more costs should the change cost more than otherwise quoted.
To avoid any confusion, be sure that change orders are as detailed as possible. Every change order should identify the additional work being requested, including drawings, revised costs, scheduling updates, and revised costs. This should all be reviewed, understood, and signed by each party.
Many times contractors will do the extra work without getting the proper approval with the intentions of doing so later. Typically the excuse is a lack of time or placing too much faith in the other party. They resort to a verbal agreement which leads to discrepancies later. You do not want to take that chance. To eliminate any chance of confusion or dispute, get it all in writing upfront and document and photograph your work at different stages.
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.