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Construction Payment Disputes: Addressing Change Orders, Extra Work, and Other Costs

Modifying AIA Article 7; Oral Changes; Cardinal Change; Defective Plans; Additional, Unauthorized, or Nonconforming Work

Recording of a 90-minute CLE video webinar with Q&A

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Conducted on Wednesday, November 9, 2022

Recorded event now available

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This CLE course will address advanced payment issues in construction projects, including change orders and extra work. The panel will provide practical guidance to construction practitioners for differentiating between actual versus perceived changes; undocumented oral change orders; changes due to defective plans and specifications; the effects of previously unknown site conditions; additional, unauthorized, or nonconforming work; changes because of external factors; and change order impact costs. The panel will also discuss the latest American Institute of Architects (AIA) standard contract documents--such as Article 7 of the AIA A201 General Conditions of the Contract for Construction--and best practices for amending these standard provisions to address payment issues.

Description

No architect or engineer ever produced a perfect set of plans and specifications. Every construction project is different, and each is built by a combination of contractors. Work is often affected by the unforeseeable: inclement weather, subsurface conditions, new building codes, or unavailability of materials. Change orders exist because of the dynamic and complex nature of construction projects.

Nearly all construction contracts have a "changes in the work" clause that establishes procedures for revising a contractor's scope of work. A "changes in the work" clause is an essential part of any construction contract and allows the parties to agree to a process for changing the work and pricing those changes. But innovative and tailored approaches to these clauses and related issues can significantly maximize client return.

All major standard form agreements address changes in the work, usually as part of the general conditions. For instance, in the AIA-A201 2017, changes are addressed in Article 7. The standard form agreements all assume change orders are written documents. Custom contracts often explicitly state there can be no oral modification of the contract, and only signed, written change orders will bind the parties. But despite their widespread use, AIA standard provisions often fail to protect the interests of particular clients.

Listen as our authoritative panel guides construction practitioners in differentiating between actual versus perceived changes and addressing undocumented change orders; changes due to defective plans and specifications; the effects of previously unknown site conditions; additional, unauthorized, or nonconforming work; changes because of external factors; and change order impact costs. The panel will also discuss the latest AIA standard contract documents and best practices for amending these standard provisions to address payment issues.

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Outline

  1. Overview
  2. Real vs. perceived changes
  3. Undocumented oral change orders
  4. Changes due to defective plans and specifications
  5. Previously unknown site conditions
  6. Additional, unauthorized, or non-conforming work
  7. Change by outside forces: market shifts, zoning issues, etc.
  8. Change order impact costs
  9. AIA standard contract provisions
    1. Drafting strategies
    2. Best practices
  10. Conclusion

Benefits

The panel will review these and other key issues:

  • What best practices address change orders, extra work, and other payment issues?
  • What is missing in AIA Article 7?
  • What are best practices for modifying and amending these forms?
  • In what ways are AIA documents incomplete?
  • How can counsel help clients differentiate between real versus perceived changes?
  • What are strategies to avoid disputes over undocumented oral changes?
  • What are best practices for ensuring project-wide consistency?
  • What practical drafting strategies will reduce the likelihood of disputes and offer significant advantages if disputes arise?

Faculty

Davis, Kelly
Kelly Davis

Principal
Kelly M. Davis & Associates

Ms. Davis brings more than 20 years of experience, determination, compassion, and innovation to her practice. She...  |  Read More

McNamara, John
John McNamara

Founding Partner
Lane McNamara

Mr. McNamara’s practice areas include construction law, employment law, suretyship, trial practice and insurance...  |  Read More

Volack, Richard
Richard R. Volack

Partner, Chair Cybersecurity & Data Privacy Practice
Peckar & Abramson

Mr. Volack counsels some of the country’s largest general contractors, construction managers, and owners in all...  |  Read More

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