Change orders, inevitable in the lifecycle of a construction project, can create a significant challenge, even when the owner and contractor share mutual agreement on the scope, price, and time impact associated with the change. The difficulty amplifies when disagreements emerge, especially during the progression of the project. Such disputes may include the owner’s belief that the scope of work under discussion was included in the existing contract’s price, and the contractor’s counterclaim that it hadn’t anticipated that scope – a scenario often seen in the construction industry.
Disputed change orders can cause extended delays, inflict additional costs, and pose potential legal risks to all parties involved. It’s crucial for companies to have a sound plan in place to manage and resolve disputed change orders effectively, to keep the project on track and minimize exposure to legal disputes.
An essential strategy is to ensure clear communication and understanding between owners and contractors before the project begins. All parties need to agree on the scope of work up front to avoid potential discrepancies in the future. Regular meetings to discuss project progress and potential changes can help avoid misunderstandings or disagreements. Moreover, being proactive and addressing discrepancies at their onset can pave the way for smoother resolution.
Documentation plays a critical role as well – ensure all agreements, conversations, and deviations from the contract are well-documented and saved. Such documentation will not only provide a clear roadmap for the project, but will also serve as critical evidence in case any legal disputes arise.
Finally, it is always prudent to involve legal professionals as early as possible in the process, particularly for larger projects where potential disputed changes could have substantial financial ramifications. Legal insight can help pre-emptively address these issues, protect rights and interests, and steer the project away from costly legal tangents.
Ahead of potential issues, preparation and strategic handling of disputed change orders can help avert substantial time delays, cost overruns, and potential legal complications. For more detailed guidance, refer to the article “Don’t Let Disputed Change Orders Derail Your Construction Project” by Stoel Rives on JD Supra.