Guest opinion
Is it a change or an extra?
Know the distinction when looking at contract changes that occur during construction
Because of the length of time it takes to complete a project, the number of parties involved, and the general unpredictable nature of construction work, it is rare that a contract for such work remains unchanged from start to finish. While it is expected that changes to a construction contract may have to be made once a project is underway, no one wants the work to come to a stop while the parties negotiate, esti-mate, draft and execute changes, especially with workers, equipment and supplies on-site, and the ever-present need to meet scheduling deadlines.
Be aware that there is a legal distinction between a change and an extra. A change is a modification to an item that is already contemplated under the contract. An extra, on the other hand, is material or work in addition to that which was addressed under the original contract. Before entering into a construction contract, one should determine if the contract addresses changes or extras, and if so, whether they are treated the same way.
AIA documents
Under AIA (The American Institute of Architects) documents, there are two types of contract changes. A change order is effectuated where the contracting parties agree to the nature of the work changed and the cost of such work in advance. In other words, there is a change at an agreed upon price and time.
Get change orders and extras in writing
Whether extras or changes, they need to be in writing to be enforceable. That said, this requirement may be waived based on the parties’ conduct or a verbal understanding. Just saying something has to be in writing will not necessarily make it so. But, as in everything else related to construction, having every-thing in writing is absolutely the way to go.
Identify in writing the specific persons who are authorized to make changes or extras and to bind a con-tracting party. When drafting a change order or extras, it is sensible to include the date, an adequate de-scription of the work to be performed, the price (or, at a minimum, a method for determining the price), a description of how long the work is estimated to take and any exceptions or objections as to what is be-ing resolved by the change order or extra.
Because it is almost guaranteed that a change order or extra will become part of your construction pro-ject, be prepared. Get them in writing.
About the Author: Attorney Alex Barthet (alex@barthet.com) serves as litigation counsel to many contrac-tors and material suppliers. Board certified in construction law by the Florida Bar, he has been selected by his peers for inclusion in lists such as The Florida Super Lawyers within the specialty of construction law.
Editor’s Note: This piece originally appeared at TheLienZone.com
