Change orders are a common occurrence in construction projects. They may happen due to unforeseen site conditions, design modifications, or client requests. In all cases, they serve as formal amendments to the original construction contract and may adjust the scope, cost, and/or timeline of a project. Incidentally, change orders frequently become a source of contention and construction disputes in Houston.
Common Causes of Disputes Stemming from Change Orders
A change order typically includes a description of the change and adjustments to the project cost and schedule (as well as authorization from the relevant parties). This process is designed to ensure transparency and agreement before additional work begins.
Change orders are governed by the underlying contract and applicable state law. These orders can generate legal and operational challenges due to:
Lack of Clear Documentation
In some cases, parties may fail to properly document the change. If the scope of the change is not clearly defined or if changes to the cost and schedule are unclear, disagreements may occur. For example, suppose a contractor may proceed with additional work based on a verbal directive. The owner may later dispute the scope or necessity of the work.
Unauthorized Work
Change orders can generate issues if a contractor performs work without prior written approval. The owner may claim the contractor acted outside the scope of the agreement, while the contractor argues the work was necessary to complete the project in a timely manner.
In some cases, these disputes arise when unexpected construction defects are discovered during the project, requiring repairs or design changes. Courts typically require written authorization for change orders, and failure to obtain it can invalidate the contractor’s claim for additional compensation.
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When Project Changes Cause Legal Trouble
Disagreements Over Scope
Change orders aren’t always clear on what constitutes a “change” versus what falls under the original contract scope. This lack of clarity can spark disputes over whether additional compensation or time is part of the scope of a project.
Delay and Disruption Claims
A change order that adds work or alters the sequence of construction can result in project delays and increased overhead. Contractors may file claims for extended general conditions or lost productivity. Owners, in turn, may dispute these costs, particularly if they believe the contractor should have mitigated the delay. These delays can also trigger liquidated damages provisions, leading to additional legal and financial disputes between contractors and owners.
Multiple Change Orders
A single change order might not disrupt a project. However, the compounding effect of multiple changes can significantly affect cost and schedule. Contractors may argue that change orders disrupted the overall project plan. These claims are difficult to prove and often require expert testimony.
Contact a Houston Construction Dispute Lawyer for Help Understanding Your Options
Change orders are a standard part of the construction process. However, they can easily lead to costly and time-consuming disputes. If you are facing unexpected costs or other issues based on an unclear change order, you have rights.
A party challenging a change order may have a claim for breach of contract or seek compensation for extra work performed without proper payment. If the change order process wasn’t followed (such as failure to provide written approval or misrepresenting the scope), you have the right to enforce the contract terms and seek damages.
At Porter Law Firm, our Houston construction dispute lawyer can help you understand your rights and legal options. Contact us today to schedule a confidential consultation.