Summary: Prevent losses or recover compensation by knowing the definition of the four most common construction claims: directed changes, differing site conditions, defective contract documents and superior knowledge.
Here is a list of the most common construction claims types that will help identify situations for potential compensation. Note that it is common for more than one type of claim for the same project.
Directed changes – This type of claim is when a contractor performs work that is within the context of the contract but is not part of the original scope of work. Often, such changes include the use of different materials, changes in design and the addition of work. While the owner might recognize the directed changes, the issue arises from the compensation.
Differing site conditions – This is also known as “changed conditions” and involves variations in the either the subsurface or foundation conditions as stipulated in the contract. Changed conditions only come up when such conditions have a detrimental effect on work, and there was no reasonable way of known beforehand.
Defective contract documents – Also known as Errors & Omissions, this is when there are errors in the drawings, specifications or language of the contract. The contractor is not responsible for any issues when directed by the owner to follow plans with errors.
Superior knowledge – This type of claim arises when the owner withholds facts that significantly impacts the performance of the contractor. To proceed with such a claim, the contractor must show in writing what information the owner withheld and the material impact on their performance.
Written by Lyle Charles Consulting, experts in commercial and residential construction, certified in construction mediation and construction claims preparation.
