Change directives force contractors to accept changes that they aren't on board with. As a result, they can lead to poor relationships or even disputes.

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No construction project goes exactly as planned. Throughout the life of the job, there are typically numerous changes and alterations made to the projection specs. Typically, these changes are made via change social club. Yet, when the contractor and owner can't concur on changes, an owner may be able to override their contractor via change directives.

What is a construction change directive?

A construction change directive (CCD) is effectively a command to a contractor to change their work on the project. When a contractor is given a change directive, information technology is essentially an order: The contractor must follow the changes without any say in the matter. Change directives are also known as "force business relationship work."

The American Establish of Architects (AIA) produces a form for this purpose, the G714 Construction Change Directive.

Change Directives vs. Change Orders: What's the departure?

Despite the name, a change club is by and large made upon agreement between the owner and the contractor. With change orders, either party will present the other with a proposed change, and so both the possessor and the contractor volition determine how to brand that change, likewise as other adjustments to the price and the schedule.

Change directives aren't an agreement to brand a change – they're mandatory. Change directives are literally a directive, given by an owner, that a contractor must abide past. Often, a alter directive will follow a disagreement between the possessor and their contractor.

There's yet another way that an builder can change the work without consent of the contractor, using what's known every bit Builder'southward Supplemental Instruction, or ASI. Withal, an ASI isn't allowed if the change affects the schedule or cost, so it presumably doesn't cause the same bug as a modify directive.

Can an owner actually change the contract without agreement?

Change directives tin can only be made if they're allowed in the original structure agreement. So, if the contract doesn't explicitly allow for an owner to outcome alter directives, a contractor isn't jump by an owner's unilateral demand to modify the project.

What's more – even when change directivesareallowed, there'due south a limit to how much an possessor can alter the contract. That'due south where the cardinal change dominion comes in.

If a modify directive (or even a change gild, for that matter) changes the contract so much then that the change results in an abandonment of the original contract, that change directive can't be made. Well, information technology can existmade, just a contractor might not have to follow information technology. If a change directive fundamentally alters the original contract in such a way that constitutes a key change, that could be considered a breach of contract. It makes sense – if the contract doesn't take to be followed anyhow, what'south the point of the agreement?

Learn more: How to Consummate a Alter Society

How contractors can answer to a change directive

Change directives can be a useful tool for owners, but they can create a miserable situation for contractors. This is particularly true for smaller contractors who aren't capable of sustaining concern operations while trying to resolve the dispute.

When a contractor is faced with a change directive, they generally accept a few options, such as:

  1. Agreeing to the alter, the cost, and the timing proposed past the owner;
  2. Proposing alterations to the change directive (be that for the work itself, the cost for that work, or for the schedule)
  3. Disputing an issue with the change directive afterwardsthe additional piece of work is completed; or
  4. Walking off the project, facing the possibility of breach of contract.

When a contractor disputes the adjustment, they should submit a written argument. This serves as a annunciation that they are proceeding nether protest, and it could reserve the right to make a merits for payment after performance.

Request for payment

As for actual payment for work under a change directive – that might get tricky. For things like time and material contracts, determining a price for changes might be uncomplicated to calculate. Nonetheless, when the contract toll can't hands (and fairly!) be adjusted for new or boosted work, it might accept a lilliputian more effort to determine what's owed. Obviously, the most preferable road is to come to some agreement about what should be owed – and that will exist a lot easier if skillful relationships have been established on the projection.

Ultimately, though, billing a change directive just similar a change order makes a lot of sense. If an owner disputes that invoice – the standard options apply. Outset and foremost, talking out the effect – and potentially negotiating the matter – is preferable to initiating a payment dispute. Only, if that won't work, escalating the thing to somecaste might make sense (like with a Notice of Intent to Lien or other payment threats). And, if talking information technology out or escalating the issue doesn't work, information technology might be time to make some form of payment claim.

Best Practices for Owners and Contractors

The best way to bargain with change directives is to avoid them altogether. Retrieve about it – when a change directive is issued, that means that the contractor and owner can't get on the same folio and an owner is having to impose their volition. This is problematic for obvious reasons.

Contractors don't want to exist forced to practice things against their will (specially when they aren't fifty-fifty based on the contract). A change directive erodes the relationship between the owner and the contractor – then futurity dealings tend to be icier. Plus, deciding on the price, schedule adjustment, and execution of a change directive opens upward all sorts of opportunities for an issue. All in all, change directives create a contentious atmosphere that'due south ripe for a payment dispute.

How to prevent change directives

By really communicating with a property owner from the first, beyond just the bare-bones project and contract discussions, a contractor tin better empathise what the possessor is looking for in the projection. Plus, through this communication, it will be easier for an possessor to choice up on any misunderstandings between the parties. Plus, through the sheer habit of communication, it becomes easier to talk out whatever issues that will pop upward down the road.

When both parties feel comfortable with each other, proposed changes to a projection's scope or specifications can be discussed in a civil manner. That style, both sides accept input in how the modify volition be undertaken, and a regular-old change society can be fabricated to enact those changes. Of form, with thorough communication earlier the contract is executed, changes could fifty-fifty be avoided in the first place!

Additional Resources

  • Construction Contracts: A Deep Dive on Breach of Contract
  • Duty to Proceed | When Stopping Isn't an Option
  • Construction Questions- Should You Walk Off the Job if Not Paid?

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Change Directives can Force Contractors to Make Unwanted Changes

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Modify Directives tin Force Contractors to Brand Unwanted Changes

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Modify directives force contractors to have changes that they aren't on board with. Every bit a effect, they can pb to poor relationships or fifty-fifty disputes.

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Matt Viator

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