Change orders are essential for proper construction management, and protecting your team’s interests during those times is essential to success. When dealing with rights in construction change orders, it’s crucial to prioritize your rights. Change orders keep coming, whether it’s a design revision, scope adjustment, or site condition. Despite this, many contractors miss one crucial step—reserving their rights to future claims.
Failing to reserve rights in construction change orders can cost you both time and money. Fortunately, you can protect your position with clear language and consistent documentation.
What It Means to Reserve Your Rights
When you sign a change order, you often agree on added work, cost, and sometimes time. But impacts aren’t always clear immediately. By reserving your rights in construction change orders, you keep the door open for future claims.
This small step tells the owner you may pursue more time or costs later. Without it, you risk waiving those claims.
Why It Matters So Much
1. Not All Effects Are Known Up Front
Many changes create ripple effects. For instance, a drawing revision might disrupt schedules, subcontractors, or material delivery weeks after the fact.
2. Signing Without Reservation Can Hurt You Later
Courts or owners might see the signed change order as a full and final settlement if you don’t reserve your rights.
3. Contracts Often Include Waiver Language
Standard contracts may include language that blocks future claims unless you reserve rights in writing at the time of change.
How to Reserve Your Rights Effectively
Use Clear Language
Include this kind of statement in your change order:
“Contractor reserves the right to seek additional time and compensation related to the work described herein.” Think carefully about your rights in construction change orders to ensure proper documentation.
Train Your Teams
Train your Teams effectively. First, ensure project managers understand when to include reservation language. Next, emphasize its importance in project documentation. Additionally, regular workshops should be conducted to reinforce this knowledge. Moreover, create easy-to-follow guidelines for team members. By doing so, you enhance consistency across projects. As a result, everyone will communicate clearly about potential risks. Furthermore, open discussions should be encouraged about any concerns related to reservations. Ultimately, this proactive approach fosters a culture of awareness and preparedness. In conclusion, integrating reservation language into your processes leads to more successful project outcomes. Thus, invest time in training your teams for better results.
Keep Detailed Records
To support any future claim, maintain detailed records. Track delays, costs, and disruptions consistently after signing any changes. First, document the initial agreement to establish a baseline. Next, note any delays immediately to capture their impact. When costs increase, record specifics to clarify reasons. Additionally, keep receipts and invoices organized for easy access. Regularly reviewing these records will help you stay informed and prepared. Moreover, sharing this information with stakeholders can foster transparency. Ultimately, these thorough records will strengthen your position whenever disputes arise, ensuring you have the evidence to support your claims effectively.
Understand Your Contracts
Understanding your contracts is essential. First, review all waiver and claims provisions closely. Next, confirm that your reservation language aligns with the contract’s terms. Additionally, clarify any ambiguous clauses to prevent misunderstandings. Furthermore, communicate any concerns with legal counsel to ensure protection. Afterward, document all discussions and agreements for future reference. Consequently, you will create a solid foundation for handling potential disputes. By prioritizing this process, your team can navigate contract complexities with confidence. Ultimately, this diligence will enhance your contract management and minimize risks. Stay proactive and organized to foster better project outcomes and maintain positive stakeholder relationships.
Final Thought: Protect Yourself Before the Damage Is Done
You can’t control every change, but you can control how you respond. Reserving rights isn’t aggressive—it’s smart risk management. It keeps your options open and your financial position strong.
Precision Scheduling Consultants help contractors build better processes, avoid costly mistakes, and protect every dollar and day they earn.
Need Help Managing Change Orders or Contract Risk?
Contact us today. Let’s make sure your next change doesn’t cost more than it should.
