How scope creep can lead to litigation

| Dec 20, 2019 | construction law, Firm News |

If you are a contractor, you may already have experienced some of the adverse effects of scope creep. A recent report on construction disputes by an international consultancy group determined that this serious problem was the No. 1 factor in disputes across seven different industries, including:

  • Defense
  • Building
  • Oil and gas
  • Military and aerospace
  • Infrastructure
  • Industrial
  • Utilities and power

As a builder, you naturally want a satisfied client. So, when they ask for an additional set of French doors to open onto the patio or a skylight above the kitchen, you may be tempted to cave.

But before you do, consider the precedent you set, not just with the client but also with your crew and any subs working the job. They may be tempted to also acquiesece to clients’ demands since you did. Eventually, your bottom line will take the hit from the scope creep.

One way to avoid the problem entirely is to make sure that your contracts are very specific and clear about what work will be done on each job. Using contracts that are too general is just asking for scope creep problems to develop.

When a client approaches you with changes, you don’t have to shoot them down entirely. Some requests may be quite reasonable. But you can pull out the contract and note that this is something new that was not orignally included. If it is really minor, you may want to just add it in with no charge.

But if not, here is where you inform the client of the materials and labor cost of the changes. If they still want it, by all means, proceed. Just make sure that they sign off on any cost increases on the amended contract. If they balk at that, you can always say that your construction law attorney insists on changes being handled that way for liability matters.