Change Order Considerations
During the course of a construction project, the property owner or other contracting party may request for work, services, or materials that fall outside the scope of the original contract. Often, contractors will use change orders to document the alteration or addition to the original contract. If properly handled, change orders can help increase profitability, reduce the likelihood of disputes, and protect your business’ reputation.
Unfortunately, change orders are not always properly handled. For this reason, our Orlando construction law attorneys have outlined a few considerations that contractors should take into account when drafting a change order.
Check Twice for Errors
To ensure that you are properly protected, it is important to check the change order for errors. The first thing you’ll want to check for is if the requested item falls outside of the original scope of work. If it does, does the original contract include a provision for change orders? If so, it is important to follow the guidelines that are provided in the provision. Regardless of whether or not there is a Change Order provision present in the original contract, it is recommended to contact a construction law attorney in Orlando to ensure your change order protects your best interests. You’ll also want to double check that all calculations are correct and any information that is relevant to the request is included in the change order.
Establish an Agreed Upon Amount for Pricing
Another key consideration is pricing. Our Orlando construction law attorneys cannot stress enough the importance of discussing, agreeing to, and documenting the costs of the requested items before initiating work. Regardless of how minor the changes may appear, it is important that the costs associated with any change that falls outside of the original scope of work is agreed to by all contracting parties. Otherwise, you may find yourself doing work for free.
Document All Agreements in Writing
Like all things related to construction law, always get it in writing. It is imperative that your change orders outline the requests that fall outside of the initial scope of work, material and labor costs, payment schedules, timeframes, and any other pertinent details. It is equally as important to make sure that the change order is accepted and signed by an authorized party prior to the initiation of work.
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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.