A change order is expected during a construction project, but a legal dispute is typically unexpected.
Change orders are documents that are used to identify the changes that have been made to the original contract. It also documents the cost of those changes, and the date on which they were made. The original contract should include a change order clause, to account for this contingency.
Since you’re working with legally binding documents, it’s crucial to take all necessary precautions to prevent a dispute that ends up in court.
A change order can be issued for any kind of project, from a simple home renovation to a complicated engineering project.
Change orders are an important part of construction projects, as they help ensure that all parties involved in the project are aware of any changes that have been made, as well as their associated costs. However, legally, you cannot make changes without going through the process of a change order. If you do, it could lead to a legal dispute.
Whether you’re a contractor or business owner, you need to protect yourself against potential disputes that could negatively impact your company.
Here are our recommendations on how to prevent disputes within your business.
Don’t Begin Until You Get Approval
There’s a distinct difference between a change order and a request for one. A change order request (COR) is the proposal for changes within a scope of work. A change order is the approval to proceed with changes proposed.
As a contractor, you should not make any changes until it’s been approved, in writing. A change order is a request to make a change to the scope of work that was originally agreed upon. A written change order needs approval before you can start.
If you jump the gun and get started beforehand, not only can that create tension with the client, but it would be out of scope of the agreement. This could leave you vulnerable to a potential lawsuit.
Always Use Clear Communication
Communication is crucial for any business, but extremely necessary for the construction business. You have several individuals involved with a single project, and need good communication for everything to run smoothly.
From the start, focus on clear avenues of communication. Make sure you know the best methods to communicate with your client. The better you are with communication, the least likely you’ll have disputes.
The first step is to make sure that the scope of work is clearly defined and agreed upon by both parties. The second step is to make sure that the timeline for the project is also clear and agreed upon. The third step is to make sure that there are no surprises in terms of cost or time, which can be done by providing a detailed estimate upfront.
Creating a thorough change order is another form of clear communication, since it requires considerable detail to explain any changes to the initial contract.
Disputes often arise due to poor communication. Always be polite and explain any additional fees or changes in detail. Also, get all communication in writing and have digital backups.
Get Everything in Writing
You might be working on a project and find a minor change that needs to be done. It won’t change the scope or cost, why not just take care of it quickly?
Even if you have a situation like this, you need to document every change, even if they’re minor.
Why? Because disputes on construction projects can end up in court. You need to have everything documented and in writing to legally protect yourself.
The change order should be in writing because it provides a way to document the agreement for all parties. It also is a way to avoid ambiguity and confusion about what was agreed upon. Never rely on verbal agreements on a change order, even if it’s minor.
There are several reasons to get documentation in writing.
The first reason is that it creates documentation of the agreement for all parties. This documentation can help avoid ambiguity and confusion about what was agreed upon.
Most importantly, if a dispute goes to court, you will need all the documentation in writing to be valid. You can not rely on verbal agreements to save you from legal implications.
The only way to legally protect your business is by having all change order documentation in writing.
How Software is the Solution
Just like changes to a project, you can never predict a dispute. However, you can drastically reduce the chances of a dispute with your client by having a thorough and robust process.
Change order software is a type of software that is used to track and manage change orders. It helps contractors to stay on top of their projects, and it also helps them to be more efficient with their time.
It can help you to track and manage change orders across all your projects. This will allow you to make sure that everything is running smoothly and efficiently.
Trak Changes is the best option for small contractors looking to provide a simple and modern workflow for change orders. It has a user-friendly interface to make it easy for anyone to use – even if you aren’t tech-friendly.
Using software to organize your change orders can help reduce the chances of disputes with your clients and even less to have legal implications.
Ready to simplify your change order process? Try our one week free trial to see what Trak Changes can do for your business.
Simple, transparent pricing
Just like our product, our pricing is straightforward.
One price. Pay monthly. Cancel anytime.
No long contracts, no nickel and diming.
No credit card required