Change Order and Change 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 3 rd 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!