Tips For Avoiding Change Order Disputes In Florida Construction Contracts
When negotiating a construction contract, contractors and owners typically operate under a key assumption: There WILL be changes to the project that will inevitably impact the scope, cost or schedule. It is either impossible or impractical to comprehensively define the scope of work down to every last detail that may arise. Therefore, there is a process for implementing modifications through a “change order,” defined by Florida’s construction lien law as any labor, services, or materials which are added or deleted from the original contract – and which are authorized by the property owner.
The definition seems straightforward, but change order disputes often arise. Property owners who authorize alterations do not always understand how they affect cost; contractors get frustrated when numerous change orders throw off the construction schedule. Conflicts do not have to explode into litigation, however, when you rely on a skilled Florida construction law attorney for guidance. Some tips on effective change order management may smooth over disputes before they arise.
Make sure you understand the contract’s requirements for change orders.
While the general terms may be similar, every construction contract will contain specific prerequisites for addressing change orders. You can prevent disputes by adhering to requirements on:
- Delivery procedures for change order notices;
- Timing requirements for sending change order notices;
- The parameters for how change orders impact pricing, such as prohibiting modifications above a certain percentage of the total cost; and
- Provisions on how change orders impact the construction schedule.
Carefully identify what constitutes a project change.
One of the biggest challenges for parties is disagreeing over what falls under the contractual provisions on change orders. In other words, whether the item is an actual modification or something envisioned by the original terms of the contract. Anything that affects cost, schedule, or performance would be a change order, such as:
- Late or defective materials;
- Delays in obtaining engineering and construction specifications;
- Weather-related work stoppages;
- Issues with inspections; and
- Owner change of plans.
Be efficient in negotiating and finalizing requests.
If both parties have complied with the construction contract terms for change orders, you can avoid disputes by addressing the matter right away. When you handle a modification early and as soon as it crosses your desk, the impact to the project cost, schedule, and performance is more likely to be minimal. Setting a change order aside means it will only become more expensive to implement later.
When a disagreement develops during negotiations, it is wise to get legal counsel involved. Many disputes can be resolved by construction lawyers who have in-depth knowledge of the laws, requirements, and legal ramifications of change orders.
Set Up a Consultation with a Florida Construction Law Attorney
At Linkhorst & Hockin, P.A., our team is adept at negotiating and drafting construction contracts with change order management in mind. We are ready to assist with creating a solid agreement to help you avoid litigation, so please contact our Jupiter, FL offices to schedule a consultation. We can advise you on change order issues after reviewing your situation.