Project timelines, responsibilities and deliverables are often carefully outlined in construction agreements. When one party unilaterally shifts the scope of the work, it can cause delays, increase costs and result in disputes. A significant change to the scope without agreement can lead to allegations of breach of contract.
Scope changes are not unusual in construction, but they must be handled correctly. If handled poorly, they may trigger disagreements over payment, performance obligations or project quality. Preventing disputes begins with a clear process for addressing any modifications to the original agreement.
All changes to project scope ought to be mutually agreed upon
One party cannot decide to change the work without involving the other. Scope changes should be discussed, documented and confirmed by all involved. Failing to do so can create legal and financial consequences.
- Defined approval rights: Contracts often contain language identifying which changes require mutual approval. If a party bypasses this requirement, it may be seen as acting outside the contract.
- Impact on performance obligations: A shift in scope can affect deadlines and costs. A subcontractor may need more time or materials than initially planned. Without a revised agreement, the original contract terms may not reflect the new expectations.
- Unclear documentation: If a party adds work without clear written approval, it may be difficult to resolve disputes later. Courts often look to what was signed and agreed upon at the time.
- Billing issues: Adding unapproved work can result in disputed invoices. One party may refuse to pay for work it did not agree to, even if that work was performed in good faith.
- Intent and interpretation: When contract language is unclear, courts may consider outside evidence to determine what both sides intended. However, relying on that can increase the risk of litigation and costs.
If a project change is being considered, it is critical to revisit the contract terms before moving forward. Those involved in construction disputes or facing breach of contract claims may benefit from seeking legal guidance. Contract clarity can help reduce the risk of conflict and protect your interests.