Change Orders in Contracts

Disclaimer – this and subsequent articles on this subject are not intended to be legal advice, merely an example for discussions between you and your legal advisor.

Please keep in mind, many of these terms are applicable towards post frame building kits and would require edits for cases where a builder is providing erection services or materials and labor.

George Headley wrote an article for Construction Business Owner, on how contractors can improve their change orders. For those who are curious, this article can be read at:

An average Hansen Pole Buildings client requests 10-15 quotes before finalizing their pole building design. After all of these tweaks, we assume our client has dialed it in and knows exactly what they are getting. Sadly, there are some who have second (and third or fourth) thoughts and either want or think they want to make changes.

When a client even considers making a change after order, it stops wheels of progress on not only their project, but others as well. Our staff is now taken away from their everyday work – just to get information so you can decide whether you want to make a change or not.

Everyone’s time is the most valuable thing they own.

changeCHANGE ORDERS: Purchaser may request modifications or changes to the building specifications or the scope of work. ALL such requests must be made directly to the Seller’s office. Seller will be unable to honor requests made to any other parties. Any and all modifications or changes requested by Purchaser to the building specifications or the scope of work should be executed only upon a written Change Order, approved by Purchaser on Seller’s approved form(s). 

If the Purchaser is more than an individual, any one person or their authorized representative(s) may execute Change Orders. All Change Orders resulting in added charges are due and payable upon acceptance by Purchaser, unless such Change Orders are executed prior to preparation of finance loan documents and can be included in total loan amount. 

Properly executed and accepted Change Orders take precedence over specifications stated upon this Agreement. Unless a Change Order has been prepared in writing and signed by Purchaser, the cost of processing or completing and Change Order shall be simply calculated on the basis of (1) A labor rate of no less than $xxx per person-hour, or any portion thereof, for all office or administrative time spent on processing a Change Order which is processed by Seller, but which Purchaser elects for any reason not to have performed, (2) a flat labor rate of no less than $xxx per person-hour, or any portion thereof, for all Seller’s or Seller’s agents who work on the Change Order, (3) Two (2) times the cost of all actual material costs invoiced to Seller, including delivery and freight, for Change Orders actually performed and completed by Seller. 

Should Purchaser and Seller be unable to agree on the cost of a Change Order, Purchaser authorizes Seller to charge Purchaser’s account at the above rates.

CONSTRUCTIVE CHANGES: May result from any oral or written act or omission by Purchaser or Purchaser’s authorized representative which causes Seller to perform work beyond the scope of the original Agreement or approved Change Orders, including, but not limited to, changes in the method of performance, misinterpretation of specifications, over inspection, rejection of conforming work, or rejection of “or equal” substitutions. Any such constructive change will be paid by Seller at the rates established in Section xx of this Agreement, “Change Orders”.

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