With any construction job, a contract agreeing to the scope of work, payment perimeters, and terms is necessary.
It’s challenging to predict circumstances significantly far out as construction projects can vary in length, from days to weeks to months and sometimes years. Therefore, it’s essential to have all change orders in writing for the organization of projects, transparency, and legality.
Without a written and signed change order, contractors are leaving themselves exposed when it comes to disputes about their work. Ultimately, when change orders are in writing, it is legally binding and ensures that both parties agreed to changes with the costs and terms of the construction project.
What is in a Change Order
We’ve covered what a change order is in our Change Orders 101 guide. In summary, construction change orders are a formal request for changes to the original contract or scope of work.
Change orders can be requested by the owner, general contractor, or subcontractor and should be signed by all parties involved in the project before the additional work is performed.
Does a Change Order Need to be in Writing
Yes. Written change orders should be required and signed by both parties. Since a change order is an amendment to a legal document, to ensure its validity, it cannot be a verbal agreement but needs to be in writing. Since you’re working with a contract, anything out of scope can be a breach of contract and might lead to legal implications.
It Holds Legal Weight
The order should be in writing to avoid any confusion. It is also essential to have a written agreement with the client to know what they are getting and what you are providing.
“Most construction contracts require that changes be reduced to writing. A written change order protects an owner from having to pay for unwanted work, and it also protects a contractor by evidencing changes that require an adjustment of the contract price and or completion time. Courts usually enforce contract requirements that change orders be in writing notwithstanding construction industry trade and custom.” (Corporate Fine Law).
You don’t want to risk not having a change order withstand court if it should come to that. Both parties will have more legal protection if all change orders are detailed in a written document. Having a change order clause in your contract will help establish the process for change orders prior to the start of the project.
Unfortunately, verbal agreements do not hold validity in court. You will need proof and signatures of an agreement to have your case be valid.
Keeps Track of Changes
Often in any construction project, you can expect changes and possibly multiple change orders.
When you have multiple change orders, you need to see how they intersect. Some variables will intersect and impact others. Therefore, you need to take the time to look them over and review them. Even better if you have another person to review as well.
Using software to help you track change orders will help save you time by organizing all change order requests and approvals together. No need for keeping physical papers in a folder and lugging them from job site to job site.
Utilizing simple software like Trak Changes helps you stay organized and see the waterfall of how change orders affect the completion date of the job. You wouldn’t want to estimate the completion date without first reviewing already approved change orders.
Consideration, Certainty & Completeness
Written instead of verbal agreements offer three C’s necessary for a change order.
Consideration – a change in the order in writing allows a person to have more time to consider what they agree to. They have time to consider the options and what they hope to achieve.
Certainty – When a change order is in writing, you have the time to look over all the details and decide if you have assurance over the information. Are the numbers correct? Have you provided enough detail for approval? A change order in writing allows for more confidence over the agreement versus verbally.
Completeness – You can check everything over. You can make sure everything is expressed, accurate, and complete. Verbal agreements can feel incomplete since there’s no written accountability. You might not know where a project stands without a written agreement.
You Easily Catch Errors
If your construction change order is in writing, you can track details and potential errors.
Imagine if you only agreed verbally to changes to a construction project. Imagine the number of details to manage based on the memory of a conversation?
Keeping everything documented on paper or in software like Trak Changes allows time to notice inconsistencies, give another person (a project manager) to look it over, and catch errors more quickly than a verbal agreement.
It’s nearly impossible to keep track of changes or monetary differences if you rely solely on a verbal discussion and agreement of changes.
Software Streamlines the Process
So, now we know that change orders should be written and not verbal. Know what else is best for change orders? Relying on software technology to simplify the process. When documentation is in writing, you can utilize the benefits of change order software.
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