Few construction projects finish exactly as the initial blueprints dictated. Whether it’s a sudden discovery of unstable soil, or a client deciding they want terrazzo floors instead of tile, adjustments are an inevitable part of the building process. These adjustments are handled through the change order process.
While common, change order construction protocols are often the source of significant friction. When managed poorly, they can bleed a project’s budget dry and destroy the schedule.
When managed well, they ensure fair compensation for the contractor and a satisfactory result for the owner. Understanding the causes of these changes and how to document them is vital for keeping a project profitable and out of the courtroom.
What Are Change Orders?
A change order is a formal amendment to a construction contract that alters the contractor’s scope of work. This document is essential because the original contract is legally binding; you cannot simply start doing different work without modifying that agreement.
Most change orders are “additive,” meaning they add work, increase the price, or extend the timeline. However, they can also be “deductive,” reducing the scope and lowering the contract price.
For a change order to be valid, it typically requires agreement on the new scope, price, and schedule from all parties involved: the owner, the contractor, and often the architect.
Common Causes of Scope Changes
Change orders don’t happen in a vacuum. They usually stem from specific hurdles encountered once ground is broken. Understanding these triggers can help teams anticipate potential delays.
- Unforeseen Site Conditions: This is one of the most frequent causes. For example, a contractor might dig for a foundation and hit bedrock or a high water table that wasn’t shown in the geotechnical report.
- Design Errors or Omissions: Architects and engineers are human. Sometimes, plans contain conflicts (like a pipe running through a beam) or leave out necessary details that must be addressed during construction.
- Owner-Driven Changes: Owners often change their minds after seeing the physical space. They might want to move a wall, upgrade finishes, or add entirely new rooms.
- Regulatory Requirements: Sometimes, a building inspector will require modifications to meet safety codes that weren’t fully addressed in the permit set.
- Material Issues: Sudden spikes in material costs or supply chain shortages might force a substitution, triggering a change order.
How Poor Management Leads to Disputes
The “changes in the work” clause is standard in most construction contracts (such as the AIA or ConsensusDocs forms). However, the reality of a busy job site often conflicts with the strict language of the contract.
Disputes frequently arise when work is performed without signed approval. A project manager might give a verbal instruction to “just get it done” to keep the schedule moving, promising to figure out the cost later. If that paperwork never materializes, or if the owner balks at the final invoice, the contractor is left with the cost.
These informal agreements create significant documentation gaps. When payment is delayed, or when a project runs over schedule due to these undocumented changes, the relationship sours.
This is the point where a construction dispute lawyer is often called in to untangle the mess. They must determine if the parties waived the written requirement through their conduct—a costly and uncertain legal battle that eats into project margins.
Best Practices for Smooth Change Order Management
Establishing solid processes for scope changes can streamline the project. And if a dispute develops, consulting a construction lawyer ensures you’re prepared to respond effectively.
1. Include a Clear Clause
Ensure the original contract has a robust “changes in the work” clause. This should outline exactly how a change is requested, how it is priced (e.g., lump sum vs. time and materials), and who has the authority to approve it.
2. Communicate Early and Often
Surprises are toxic to construction relationships. As soon as a potential change is identified—whether it’s a design clash or a site condition—notify the owner immediately.
3. Standardize Documentation
Do not rely on email threads or text messages. Use a standardized change order proposal form. It should detail the specific scope change, the impact on the schedule, and the exact cost.
4. Get It in Writing First
The golden rule of change order construction management is to get a signature before swinging the hammer. While schedule pressure is real, performing work without authorization is a massive financial risk.
5. Address Schedule Disruptions
Money isn’t the only factor. If a change requires an extra week of work, the change order must formally extend the completion date. Failing to adjust the schedule can leave a contractor liable for liquidated damages for delays caused by the owner’s own requests.
Staying on Track with The Mellor Law Firm
Change orders are not necessarily a sign of a failing project; they are simply a mechanism for adjusting to reality. By anticipating common causes and adhering to strict documentation standards, contractors and owners can handle these shifts without derailing the project or destroying their working relationship.
If you do need to escalate after a change order and need a construction dispute lawyer, The Mellor Law Firm can help. Give us a call for a consultation and get your questions about change orders answered.