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Could a stronger contract protect you from the problems of scope creep?

| Mar 9, 2021 | Contract Disputes |

If you are a business owner, at a certain point you will likely experience the problem of scope creep on a project. Companies strive to please their clients for obvious reasons — after all, a happy customer will return and spread good words about your business —  but scope creep is an insidious problem that can erode slim profit margins and cost you a bundle.

Rather than mitigating the damage of scope creep, it is far better to head it off at the pass. One of the best ways of doing that is by drafting ironclad contracts that clearly delineate the work to be performed by your company for your clients.

Do your contracts have too much wiggle room?

Suppose you are a builder with a client who wants to add some track lighting to the living room mid-way through the project. All told, that is not typically going to be a hard request to accommodate. But the same would not be so if the client decided that they want a skylight over a room where the solar panels had been placed.

That’s why it is very important that all work orders and contracts for services rendered are very specific, even granular. When clients start making noises about major changes they want to be added, the bottom line is if it is not covered in the contract, the additional costs will have to be negotiated and signed-off on by all parties.

Don’t forget the subs on the job

A client might try to wrangle a side deal with one of your subcontractors. But as a general contractor, you bear the legal liability for the eventual success or failure of the project. Supposedly small changes done by a sub could affect the viability of another subcontractor’s efforts or the project as a whole.

Have all the subcontractors sign off on a contract prohibiting changes to the agreed-upon work orders unless all parties have signed off on the proposals. This also protects the subs, as they may feel browbeaten by the client to add in extras under the table.

Protect your company legally at every turn

With the help of your business law attorney, you can be certain that your company has no legal liabilities resulting from scope creep.

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