Addressing change orders in construction contracts

Anyone who has been in the building business for any length of time knows that a project is rarely completed exactly as outlined in the initial agreement. Something usually needs to be changed. For this reason, it is vital that California contractors address change orders in their construction contracts in order to avoid any unnecessary disputes.

Types of changes to address in the contract

Knowing what types of issues cause change orders will help to identify the issues that need to be addressed in the contract. Below are the most common reasons why a change order may be needed:

• Professional omissions or errors
• A change in the scope of the project
• Errors in the construction specifications or design plans
• Site conditions turn out to be different than anticipated
• The omission of an element or item from the plan outlined in the contract

By addressing these issues and the change order process in the initial contract, everyone agrees to abide by certain terms and conditions. This can help keep any possible disputes to a minimum. It would also be a good idea to include a specific outline regarding what information will be needed for a change order and that it must be submitted in writing for approval of the parties involved.

Initial construction contracts can be contractors’ best and first line of defense against any disputes that may arise during a project. The more specific the terms and provisions are, the better off the company may be. A contractor’s job is to demolish, renovate or build, not necessarily to fully understand or negotiate the law, terms and provisions of a construction contract, so consulting with an attorney well-versed in this area of law could prove invaluable.