Contract Clauses to Watch Out For in Construction Contracts

2. Change orders or extras:

Often there is a clause in construction contracts that allows for change orders, but only if the change order is handled in exactly the way the contract says.

If the construction contract says that you must obtain approval in writing from the general contractor prior to performing the work, then get it in writing before you perform the work!!!

Here's something to watch out for:

If you accept the word of a superintendent that you will be compensated for extra work that he directs you to do, but then the General Contractor decides to not pay you for the work you did, there is a very good chance that you will not get paid for that extra work.

Why?

Well, for one thing, because it was an oral agreement and not written, you have no proof that the superintendent promised you anything.

For another thing, even if the superintendent admitted that he authorized you to do the work, there is probably a clause in your contract that states the superintendent is NOT AUTHORIZED to approve extra work!

Some general contractors put that clause right in front of the construction contract, in nice big letters, so that you don't miss it, while other contractors will keep that clause buried in their contract.

This makes it easier for you to miss the clause when skimming over your contract.

A quick note for those of you who don't read their construction contracts word for word, you really should read it thoroughly and don't skim any sections and I bet you'll be shocked at some of the things you may have promised to do.

Should you miss the clause limiting authorized signers and accept authorization from a superintendent (even if it is in writing and signed by the superintendent!), you will lose out on the entire payment for the extra work.

All the general contractor has to do is to show the construction contract to the judge and you're done, there's no compensation for you.

Don't, I repeat, do not accept a superintendent's or general contractor's word that he will take care of you, because when all is said and done, in the end it comes down to whether or not you followed the contract word for word!

Know what is in your contract before you sign it and review the contract before you go on to the jobsite to refresh your mind as to what the requirements are.

Now, something to keep in mind here, some contracts may NOT contain the clause and yet you can still lose the case.

Why?

Because technically, the only person that is authorized to approve change orders is the person who signed the original contract (unless otherwise provided for within the language of the contract, ie: "Superintendent is authorized to accept and approve written change orders").

Construction Contracts Continued on Page 4