How To Deal With Constructive Change Claims

    Change is the ultimate reality. However, modifications in the scope of construction work can cause disputes if not appropriately managed. Although changes are the petty thing in construction and the contractors are accustomed to it; still, claims may occur. Usually, a change triggered by the owner can cause under the clause of the contract should have proper justification. Any modification which is not addressed in the agreement is known as the constructive change. 

    Are you facing complications in the construction project but don’t know how to manage it? The article is for you! Read the detail to understand the basic concept and ways to resolve constructive change claims. 

    What is a constructive change claim?

    The constructive change occurs when the project owner impact the construction process in the same way as the change order was written. It means that one of the following activities trigger the cardinal change process:

    • A lack of comprehension of the contractual clauses
    • Misinterpretation of the contractual statements
    • Failure to understand the specifications or disclosure of information 
    • Unnecessary interference in the work of the contractor 

    In case that the contractors ensure constructive change to meet the requirements of the owner, a time extension and cost provision is a must. However, many owners don’t comply with it. Therefore, the contractors should consider acquiring the services of construction claims consultants to resolve the issues timely. 

    Types of Constructive Change

    Nevertheless, it may be difficult to identify the constructive change owing to the involvement of the contract controversies. Another reason is that constructive change can be of many types as given below:

    Deficient and Defective Contract Documents 

    Any issue in the contract documents that doesn’t allow the contractors to deal with the change triggered by the project owners may lead to a claim. In this way, the defective or deficient contract documents are a significant type of constructive change claim.  

    Misinterpretation of the Contract 

    The claim occurs when the owners reject to conform to a work done as part of constructive change. The over-inspection or misinterpretation of the contract is provided as the justification for rejection. The unanticipated changes in the project are dealt with under this type of constrictive change. 

    Constructive Acceleration 

    It is a type of constructive change that may occur owing to delay in the entitled time extension given to the contractor. In another case, if the owner doesn’t allow time of extension to the contractor and threatens for claims in case of a delay. The contractor should hire an experienced quantum expert to measure the impact of constructive change for dealing with the situation of acceleration. 

    Interference and Disruption 

    Any change in construction leads to a change in the scope of the project. It has a considerable impact on the construction process that leads to disruption and interference. It is because the contractor’s scheduled work is disturbed owing to this. It leads to the claims. 

    Owner-Furnished Items 

    A change in the use of equipment or materials in construction is defective or not aligned with the requirements of the owners may lead to a request for change. This change is handled under the clauses of constructive change in the contract. The inability to do this may lead to owner-furnished Items claims. 

    Differing Site Conditions 

    Last but not least, it is the most critical type of constructive change. The claim may occur owing to a variation in the condition of the site physically while it was not mentioned at the time of bidding. The contractor can examine the construction site before signing the contract. A claim can be made if the mentioned site is different from the actual at the time of contract signing. 

    Top ways to resolve constructive change claims 

    Nevertheless, a constructive change is a condition when the contractor performs his responsibilities beyond the contractual requirements and asks for compensation. On the other hand, the owner can also make a constructive change claim if the work is not done according to his requirements. So, the resolution of the constructive claims may be a two-way process as given below: 

    Contractor’s Course of Action in caser of change request 

    When a change has occurred in the project, the original plan of working as specified by the contractor may have to modify accordingly. The contractor can deal with the situation in the following ways:

    • Contractors should issue a notice to inform the project owner about the whole situation. 
    • A request for an extension in time should be made in time to avoid the disturbance in later stages. 
    • The contractor can claim for compensation if the change is not liable to be done under the contractual clauses. 

    Owner’s Course of Action in case of claims 

    Project owners request a change in the project that may lead to a claim. The project owner must do the following things to resolve the issues of constructive change:

    • Promptly respond to the notice issued by the contractor
    • Clear the stance taken for requesting a change in the project 
    • Get help from experienced quantum expert to avoid further confusions and misunderstanding 
    • Resolve the claims peacefully under the supervision of third-party consultants. 

    Claims in construction require vigilance for resolve!

    Summing up, a constructive change may be critical that requires additional time and resources. It is imperative to understand that both the contractors and the project owner should make some adjustments to avoid claims in the construction. Don’t forget to communicate the change clearly and negotiate the consequences effectively for a peaceful resolution to the claims!

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