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[Music] you know this is probably the most common problem i see whenever a subcontractor asks me to help them in a claim or making sure that they get fully paid for their work on a project one of the problems that inevitably arises is the fact that they don't have signed change orders for all of the work that they did i get a lot of calls when they're on the job actually doing work and they say you know what we have to do work but we don't have a signed change order so what do we do here's the thing the the typical commercial subcontract sets you up between a rock and a hard place on the one hand you've got a state a series of statements that say time is of the essence in performing this agreement and to back that up there are a series of provisions that assess damages against you from missing certain deadlines whether it's final completion substantial completion maybe benchmarks throughout the project and you can be assessed liquidated damages you could be assessed consequential damages or economic damages like lost revenue or lost profit so on the one hand you've got a lot of pressure to maintain that schedule now on the other hand you've got a contract that says that if you start performing work that is beyond your scope in other words work on which you actually need or entitle to a change order but you do that before you have a signed change order well then you will have waived your right to payment for that work now that's a problem now a lot of times i get to the point where i think to myself geez here's what i wish my client would have done a lot of times i don't say that out loud because the horse and the barn have long since separated and why make them feel bad what i'll tell you though is that you have an opportunity in your contract to state that you will not be assessed any damages for delay arising out of the time you spend waiting for a signed change order and there are a couple places in the contract where that appears where you actually can put expressly that you are not obligated to begin work on an extra work item until you are in receipt of a fully executed change order but let's say you don't have that let's say you have the typical rock and a hard place subcontract you don't have a fully signed change order and you are staring down the barrel of delayed damages so what do you do let me introduce you to the four most powerful words in the english language this is to confirm you send an email and you also send notice in accordance with the notice provision in the contract wherever that happens to go and it's a very short email or a very short letter but it says this this is to confirm that on monday such a date 2020 we are going to be performing ex work on the site in accordance with your instructions we do not yet have a signed change order however you have instructed us to appear on the site to begin this work expeditiously and we will do that as a result we are doing that with the understanding that you are waiving the right to deny us a change order for beginning work without a fully executed document okay then the next part of it says if we are not correct in this understanding and you want us to hold off on performing this work until we are in receipt of a fully executed change order please notify us no later than the close of business on such a date if we don't hear from you we will assume that you are in agreement with this email this letter etc and we will proceed as noted above love us you send that letter specifically acknowledging that you've been given an instruction you don't have a signed change order and the instruction you've been given bypasses that term and you give them the right to stop you now it's not as good as having a signed change order but it's almost as good and i have been before arbitrators and i have been in court defending that position and each time i have had that letter which i can mark as an exhibit and i can show it to the judge and i can show it to the arbitrator each time i've done that the judge or the arbitrator looks at that nods looks to the other side and says did you tell him i mean you got this right did you tell them not to appear not to do that work and if the answer is no or if they can't show where they told us to hold off we get paid now again i would fully and strongly recommend that you negotiate the subcontract so you're not put in that position but if you haven't done that and you want to play the hand you're dealt this is to [Music] confirm you