In the world of construction law, change orders are some of the most litigated and disputed documents you will come across. Though often contentious, a change order can be a useful tool for any project owner, contractor or subcontractor. As a project moves along, many unexpected conditions and circumstances can occur. With a change of position often comes a change of expectations. This is when the change order can come into play, helping you adjust the contractor’s duties and responsibilities accordingly.
Understanding the Change Order
A change order, also known as a modification order, is an order given by a project owner, which directs the contractor to change the contract amount, requirements and/or time. Change orders alter or modify the final documents upon which construction contracts are based. Rather than merely request for a change to the work plan, change orders direct such change and thereby impact both time and finances needed to finish the project.
In order for a unilateral change order to be valid without the consent of the contractor, all changes must be within the scope of the original contract and in accordance with the contract’s “Changes” clause. Louisiana is one of the few states that allows for oral change orders, but these oral change orders can be prohibited by a clause in the original contract.
The Standard Change Order
To help combat and control all the potential changes during an often lengthy construction project, the construction industry has standardized the form and use of change orders. To avoid future conflicts, most construction contracts give detailed instructions on how change orders are to be written, including which steps must be taken in order to initiate a change. Change orders usually have to state the amount of dollars and the amount of time necessary for the request. Ordinarily, they must be submitted within a certain time before the scheduled work is to commence and should be signed by several individuals who were previously designated to approve or deny a change order request.
Conflicts May Arise
As well prepared as you may be for your change order request, conflicts may still arise. Owners are generally suspicious that change orders may cost them money down the line, in price assessment and project delays.Contractors on the other hand are weary of discounted change orders that do not properly assess the required time and expenses needed for the change request. The necessity of change may be debated and the topic of who should bear the cost of the change may be heavily contested. To avoid finding yourself in a construction nightmare, consult with the right attorneys before issuing your change order.Here at Smiley Law, we are always ready to answer all of your change order questions.