If you’re in the construction business, you know one thing for sure: The plans for any building or remodel are bound to change from time to time.
Documenting and controlling the change orders you get is essential if you want to avoid litigation down the line, whether the change is caused by a customer’s whims, problems with a contractor, substitution of materials, supply chain issues or something even bigger – like a major change to the design plans.
How do you document a change order?
No matter what the cause, you want everybody involved in the change order to be on the same page. Your amended agreement should include detailed data, including:
- Whether the change order was done by mutual consent or comes as a construction change directive (CCD) from the project’s owner
- A brief explanation of why the change order was requested or directed
- A clear description of what is to be changed in comparison to the original agreement
- A summary of the total costs associated with the changes, including any changes to the costs involving materials and subcontractors
- A statement that indicates how the changes will likely expect the project’s timeline and ultimate completion date
Ideally, you want to minimize the number of change orders or directives you receive through careful project development and management, but you’ll never avoid them all. Your goal, then, is to make sure that you don’t end up being blamed for a fickle client’s decisions.
If you do end up in a dispute over a construction contract and change orders, aim to resolve the conflict through communication and negotiation whenever possible. If that fails, make sure that you have strong legal guidance before you make another move.