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Risks faced by contractors for working without a change order

| Feb 3, 2021 | Construction Contracts |

Construction projects are not always simple, and some continue to evolve even after the work has begun. Complications and challenges surface during many steps in the construction process, many of which were unexpected during the initial planning stages.

While the contractor follows guidelines from the contract, sometimes, the owner requests changes in the original plan. Such situations necessitate a change order – an addendum to the contract. And these changes must be in writing. Everyone involved must agree to the changes to the project. However, if, as a contractor in these situations, you subscribe to the philosophy “It is better than to ask forgiveness than to seek permission,” you could find yourself in legal hot water for continuing work without a change order.

Agreements necessary; do not make assumptions

A change order is in place for a reason and should be agreed upon by the contractor and owner and carefully followed related to project revisions. Along the way, the contractor may understand that he or she will have to charge more for the additional work due to the changes.

Some reasons why change orders exist include:

  • Errors and incongruities in the initial designs.
  • The owner’s decision to create specific changes to the project.
  • The owner’s desire to cut costs.

However, it is not unheard of that contractors pursue additional work without having secured a written change order. In some of such situations, the owner and contractor may have waived the necessity of having a change order simply through a discussion.

But there have been occasions in which the contractor may make assumptions and tackle the work anyway without any discussion with the owner. It is through these situations that disputes likely arise. This can get contractors into trouble.

Disputes over why the changes were made without the owner’s input along with disputes over payment to the contractor are just a couple that surface. And, sometimes, contractors may neglect to secure change orders from subcontractors.

These situations can lead to legal disputes, too, in Michigan. By working closely with owners, contractors can avoid certain conflicts, and the project will come to a satisfactory completion.

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