Supplemental Agreement Vs Change Order

When it comes to construction projects, it`s not uncommon for changes to be made along the way. However, these changes can create confusion and potential issues if not handled properly. This is where supplemental agreements and change orders come into play.

Supplemental agreements and change orders are both used to make changes to an existing construction contract. However, they have different purposes and implications. In this article, we`ll explore the differences between supplemental agreements and change orders and when to use each.

What is a supplemental agreement?

A supplemental agreement is a document that modifies the original contract without changing its scope or the agreed-upon price. It`s typically used for minor changes that do not affect the overall outcome of the project.

For example, a supplemental agreement might be used if the owner decides to change the color of the paint or the type of light fixtures used in the project. These changes do not impact the scope of the project or the price, but they do alter specific details within the original contract.

Supplemental agreements can be beneficial because they allow for flexibility and accommodate changes without the need for extensive negotiation. However, it`s important to note that they should only be used for minor changes and not for major scope revisions.

What is a change order?

A change order, on the other hand, is a document that modifies the original contract by changing the scope of the project or the agreed-upon price. It`s typically used for significant changes that impact the overall outcome of the project.

For example, a change order might be used if the owner decides to add an additional floor to the building or change the layout of the interior. These changes require extensive negotiation and agreement between the parties involved due to their significant impact on the project.

Change orders can be beneficial because they allow for significant changes to be made without the need for an entirely new contract. However, they can also create potential issues if not handled properly, such as disagreements over the scope of the change or the resulting price increase.

Which one should you use?

In general, if a change is minor and does not impact the overall scope of the project or the agreed-upon price, a supplemental agreement is appropriate. If a change is significant and impacts the overall scope or price, a change order should be used.

It`s important to note that both supplemental agreements and change orders should be documented and signed by all parties involved to ensure that everyone is in agreement on the changes being made.

In conclusion, supplemental agreements and change orders are both crucial documents in construction projects. Understanding the differences between the two and when to use each can prevent confusion and potential issues down the line. Whether you`re a contractor or owner, it`s important to use the appropriate document for any changes made to the original contract.

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