If you own a construction business, project issues can significantly impact your bottom line, increasing costs, extending schedules, and decreasing productivity. If another party has caused these issues, you may be able to seek legal remedies such as compensation and additional contract time.
Disputes about change orders
Change orders are formal modifications to the contract to adjust scope, price, and time.
Change Order can arise because the Owner wants to increase the scope of work or decrease the scope of work. Increases in scope of work can be priced on a time-and-material basis plus profit, or on fixed price agreed to in advance. Decreases in scope of work are often harder to price – the owner will always demand a large deduction and the contractor a smaller deduction.
Change Orders can occur due to differing site conditions. To preserve your rights, it is important to give proper notice in advance.
Change Orders can occur because the work is made more difficult because of some unexpected condition. This often leads to the owner claiming the contractor should have expected the condition, and the contractor claiming the opposite.
There are several types of delays in construction contract law.
Compensable delays: These are delays caused by the Owner. Unless there is a no-damage-for-delay provision, the general contractor will generally get both additional time and money.
Excusable Delays: These are delays that are not due to anyone’s fault, and that are beyond the contractor’s control – excessive weather delays, national emergencies, etc. Often the contract will grant the contractor extra time to perform (avoiding potential liquidated damages) but not extra money.
Non-compensable delays: These are delays caused by the contractor itself.