Critical Elements of Change Order Provisions

Construction projects and change orders often go hand-in-hand. Throughout the course of any project, situations, conditions or preferences can change and alter how the project will continue. As such, it is crucial to have clear directions for change orders in any construction contract.

The provisions that are in place can have a dramatic impact on the cost, scheduling and process of making changes during the course of a project, so be sure that your contract includes the following elements:

  • Submission requirements: Change orders should be required to be submitted in writing. Parties should also detail the types of changes that will warrant the submission of a change order, the timing of submitting a change order and those authorized to submit a change order.
  • Acceptance requirements: Typically, a construction contract should also state that both parties must agree to a change order for it to be enforceable. Typically, when either the owner, who requests a deviation from the plans, or the contractor encounters an unexpected problem, prepares a change order on a standard form and presents it to the owner for signature.
  • Valuations: Changes can be expensive, and contracts should include directions on how to address and cover added costs or materials.
  • Scheduling details: Changes can delay or expedite a project, and the contract provisions should include information on whether change orders must include anticipated schedule changes. There might also be reason to include direction on what options parties have if a change will affect the date of project completion.

Without these provisions in, contractors and owners can find themselves paying a hefty price when and if a change impacts a project.

A well-drafted construction contract is essential for any construction project, whether it is to renovate a small apartment or build a massive commercial building. Not only do they dictate what is being done, they also provide parties with legal protections and direction in the event of a dispute. As such, contracts should be carefully drafted and reviewed with the help of an experienced attorney.

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