Construction law: Three terms you should know

On Behalf of McNabb, Bragorgos, Burgess & Sorin, PLLC | Oct 5, 2022 | Construction Law

Construction law in Tennessee and around the country is a complex and ever-changing area of law. It can be difficult to keep up with terminology, especially if you are not familiar with the field. However, there are terms that are essential to know if you are involved in any construction project whether as an owner, contractor or subcontractor.

Construction contract
This is the document that sets forth the agreement between the parties involved in a construction project. The contract will contain provisions regarding the scope of work, schedule, payment and other important details. It is important to have a clear understanding of the construction contract before beginning any work on a project.

Change order
A change order is a written agreement between the owner and contractor that modifies the original contract. Change orders are often used to add or delete work, change the scope of work or modify the schedule or price. For example, if the owner decides to add an extra room to the house that is being built, a change order would be issued to reflect the new work.

These construction law agreements can be either verbal or written, but it is always best to get them in writing so that there is a clear record of what was agreed upon.

Notice to proceed
This is a written notice from the owner to the contractor that indicates that the contractor can begin work on the project. The notice will usually contain the start date, scope of work and other important information. The notice to proceed is an important document because it signals the start of the construction project and allows the contractor to begin incurring costs.

If you’re involved in a construction project, it is important to be familiar with these terms and what they mean. Understanding the contract documents and the process of change orders will help to avoid misunderstandings and disputes down the road.