Sunday, April 19, 2009

Contract Clauses Every General Contractor Should Have-Change Orders

All change orders must be in writing and signed off on by both parties. If all contractors were to follow this rule, my caseload would be reduced by about 80%. I am not joking. Disputes over change orders account for fee disputes and delay claims. Put something in your contract like this NOW!:

Any alterations or modifications initiated by the Owner must be agreed upon and will be executed upon a written Change Order issued by ABC and signed by ABC and Owner(s) with the price and number of days for performance specified before work on any such alteration or modification shall commence. Payment for such alteration or modification shall be made before the order is placed or the work is commenced and the Completion Date shall be extended by the number of days agreed upon for performance.

Any increase in the Scope of Work set forth in these Contract Documents which is required by plan checkers or field inspectors with city or county building/planning departments will be treated as Additional Work to this Agreement for which the Contractor will issue a Change Order.