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One important tip for your construction project – Change Orders

The DPOR regulations require Class A Contractors to obtain written change orders “which are signed by both the consumer and the licensee.” This requirement sounds pretty reasonable and easy to maintain, yet the reality is that many contractors fail to fully comply with this provision, leading to possible problems down the road.

 

From a practical standpoint, it is understandable that contractors want to be responsive to requests from the client. When a client makes a change request, the contractor tends to agree and may not wish to “paper” his client for a relatively small change. This attitude has negative implications for the contractor’s license and also for fee claims, if the project ends up in litigation.

With respect to a DPOR complaint, many contractors have been found to violate the regulations for failure to obtain written change orders. Although the penalty–usually a fine–is small, the time, effort, and possibly legal expenses add up. Furthermore, that violation can be found on the DPOR license lookup site. That could be a deal-breaker if a potential client sees that information.

With respect to a contract dispute, a failure to obtain a written and signed change order can have serious financial implications. A written and signed change order sets forth the exact parameters of the change, including the work required and the price for that work. If a dispute arises, and cannot be resolved by negotiation or mediation, litigation becomes the only alternative. Then, the contractor must claim that even without a written change order, it is entitled to reasonable compensation for its services or quantum meruit. Unfortunately, proving quantum meruit turns into an expensive exercise, requiring substantial testimony to prove the value of the work provided.

Although an email exchange approving a change may be compelling evidence, nothing can substitute for a written change order signed by both parties. Make the change order process an ordinary part of your project management to save time and expense, and to maintain clear certainty about your contract requirements.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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John Tarley

John is the firm's managing partner and chairs the firm's small business, zoning, and litigation practice areas.

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Filed under: Construction litigation, General Interest, John Tarley, State & Federal Litigation by John Tarley

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