Change Order and Change Order Disputes By Mick Martin MRM Enterprises
Change Order andChange Order Disputes
By Mick Martin
MRM Enterprises
Definition of Change Order:
• A change order is essentially an agreement to modify the parties contract. In this respect a contract modification is binding so long as both parties consent to the change.
What is a Change Order?
Some common factors leading to change orders:
• Delays
• Specific Design Alterations
• Lack of Coordination
• Building code compliance
What a Change Order is NOT:
• Interpretation of General Concepts of the Contract
• Device for Contractor or Client to get “Something for Nothing”
• A way to get out of a screw-up
• An after thought of specific work performed
Get your Change Order in Writing
• Verbal agreements are not binding on any party
• Use specific language rather than general terms
• Include signatures and dates of all parties
• Copies to all parties
Performance
vs.
Non-Performance
Getting the Change Order Right
• Opportunity to do a better job and make more money
• Go above and beyond
• Be fair
• Communication is key
Getting the Change Order Done
• Expedite the work in a timely fashion according to contract / change order
• Stick to the contract / change order
• Make sure all workers are instructed as to the specifics of the change order
• Get Paid
Addition
or
Subtraction
Add-ons (Additions)
• Any addition to the original contract, addendum or amendment
• Changing light bulbs to adding an east wing
• Common sense is not always so common
Knock-offs (Subtractions)
• Any deletion to the original contract, addendum or amendment
• Change in material, money or time
• Always under promise and over deliver
To Claim
Or
Not To Claim
What is a Claim?
• Request for adjustment of contract terms
• Request for payment of money
• Request for extensions of time
Contract Dispute Process
• Resolution
• Mediation
• Arbitration
• Litigation
Resolution
• Resolve the claim without a 3rd party
• Contractor and client come to an agreement
• Work is performed – contractor is paid
• Client is satisfied
Mediation
• Third party assistance in attempt at resolution
• Non-binding
• Mediator unbiased
Arbitration
• Provisions enforceable by statute
• Inclusion of arbitration guidelines in construction contract
Litigation
• Involvement of the judicial system
• Designed to produce accurate and fair outcome
• Method can be costly and time consuming
Obstacles are those frightful things you see when you take your eyes off your goal”
~Henry Ford Inventor and Founder of Ford Motor Company
Get It In Writing!
Questions??
Thank you!