Change orders are a crucial aspect of the construction industry that can have significant implications for contractors, owners, and subcontractors alike. In this blog, we will take a closer look at the specifics of change orders, the difference between “extra work” and “additional work,” and how to protect yourself from disputes related to change orders.
What are Change Orders?
A change order is a written document that outlines changes to the original plans and specifications that were the basis of the contract. These changes can be requested by the owner or required due to unforeseen circumstances. Change order provisions require a written change order signed by the owner or general contractor for any work beyond the contract’s scope.
The Importance of Change Orders
Change orders are an essential part of the construction industry for several reasons. They provide a clear and concise way to document changes to the project’s scope, schedule, and budget. Change orders also help prevent misunderstandings or disputes between parties by providing a written record of the agreed-upon changes.
Additionally, change orders ensure that all parties are aware of any additional costs or schedule changes that may arise due to the change in plans. Including these changes in the change order reduces the chance of unexpected costs or delays that could lead to disputes or litigation.
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Extra Work vs. Additional Work
One of the critical aspects of change orders is understanding the difference between “extra work” and “additional work.” Extra work refers to work that is independent of the contract and not required in its performance. For example, if an owner requests that a contractor paint a room a different color than originally specified, that would be considered extra work.
On the other hand, additional work is required for the contract’s performance, without which it could not be carried out. For example, if a contractor discovers a problem with the foundation of a building that was not visible during the initial inspection, repairing the foundation would be considered additional work.
Classifying work as either extra or additional is often a contested matter and must be addressed before any work is performed. Failure to agree on a change order before work is performed can lead to disputes and potential litigation.
How to Protect Yourself
To protect yourself from disputes related to change orders, it is essential to have a comprehensive understanding of the contract and the scope of work. Before performing any additional work that may be considered outside the originally agreed scope of work, always refer to the original contract and agreed to scope of work.
Suppose there is any question about whether work is considered extra or additional. In that case, it is important to discuss it with the owner or general contractor and come to a written agreement on a change order. By documenting the changes in writing, you can prevent misunderstandings or disputes that could lead to costly litigation.
Another way to protect yourself is by using a comprehensive change order template. Using a template, you can ensure that all necessary information is included and the change order is formatted correctly can make the process of creating and documenting change orders more manageable.
Use Change Orders in Your Construction Business
Change orders are an essential aspect of the construction industry, and understanding the specific contract language related to them is crucial. By correctly classifying work and referring to the original contract, you can protect yourself from disputes related to change orders. If you need help with change orders, our free downloadable change order template can make the process more manageable. Using a template and following best practices ensures that change orders are documented correctly and prevents misunderstandings or disputes that could lead to costly litigation.
Knowing how to protect yourself best is essential, especially when growing your business, and having a team to support you when you’re facing the potential of getting sued is a huge advantage. The Cromeens Law Firm team is here to help keep you out of the courtroom on the front end or help you win the fight inside of it. Contact us today and set yourself up for success with the support of a legal team.