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

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.