Utah Contractor Practice Exam

What is the most effective way to prevent disputes regarding change orders?

1. Explain the change order procedure at the time you request payment for the extra work

2. Wait until a change is necessary before discussing change orders with the owner

3. Include the change order procedure in the original contract

4. Negotiate a price for change orders after all work has been completed

The correct answer is: Include the change order procedure in the original contract

Including the change order procedure in the original contract is the most effective way to prevent disputes regarding change orders because it establishes a clear framework for how changes to the project will be handled from the beginning. This proactive approach ensures that all parties involved—the contractor, client, and any subcontractors—understand the process and implications of making changes to the original scope of work. By detailing the procedure in the contract, it reduces ambiguity and miscommunication, as all stakeholders have agreed to the terms ahead of time. This can include the methods for documenting changes, the time frames for approving alterations, and how pricing adjustments will be calculated. It sets expectations, provides a reference point, and can greatly decrease the likelihood of misunderstandings that could lead to disputes. Waiting until a change becomes necessary to discuss change orders can create confusion and may lead to differing opinions on the scope and associated costs. Discussing the procedure during payment requests or negotiating afterward can also lead to disputes, as it might not align with the expectations set forth earlier in the project.