Anyone who has worked in the construction industry for any length of time knows that the original plans can function more as a guideline than a final blueprint. Items may look good on paper but don’t work well in reality. Property owners want to make changes after seeing the project moving forward. And other issues may necessitate a change that could delay a project and conflict with the original contract.
If you account for these changes in the construction contract, it could save everyone a great deal of frustration, stress, money and time. In order to accurately address this issue, you first need to understand what change orders are and how they fit into a project.
The basics of change orders
The first thing you need to know about change orders is that they act as amendments to the original construction contract. Anytime someone wants to change the parameters of the project as outlined in the contract, you will need a change order. This document represents the agreement of all the parties involved and includes the following, at a minimum:
- A statement outlining the contractual basis for the change
- A statement regarding how the change will affect the completion of the project
- The details of the change and its differences from what the parties previously agreed to in the original contract
- The contractor’s estimation of the total cost for the change, including an itemized statement of costs for subcontractors’ work
Failing to properly document a change to your project could lead to all sorts of problems in the future. Even if your project reaches completion without any changes, preparation is key to protecting yourself should anything go wrong. A California court will look to your contract and any amendments in order to determine who bears liability if a lawsuit is filed. The better these documents are and the more details they contain, the better.
Well documented agreements ensure that everyone understands what is expected of him or her. This limits the potential for misunderstandings that may cause unnecessary delays and disputes. However, if they arise anyway, solid agreements can protect your rights and limit your liability. If you cannot resolve a disagreement outside a courtroom, your documentation could cause the court to rule in your favor.