Contract Disputes on the Job Site: Change Orders, Delays, and Payment in Construction
This article is for general informational purposes only and is not legal advice, does not create an attorney-client relationship, and should not be relied on as a substitute for advice from qualified counsel about your specific situation. If you have questions about how these issues apply to your business, you should consult with a licensed attorney in your jurisdiction.
Construction disputes tend to follow predictable fault lines. The work changed but the paperwork did not. The schedule slipped and each side blames the other. The job is substantially done but payment has stalled. These are not exotic legal problems; they are the recurring frictions of getting a project built, and they turn into disputes when the contract terms are unclear or the documentation is thin. On a construction project, the party with the better contemporaneous paper trail often has the stronger practical and legal position. This is especially true when the contract makes written notice, approvals, or claim procedures conditions to relief.
This post covers the disputes that come up most often on the job site, change orders, delays, scope, and payment, and how contract language and documentation practices determine who comes out ahead.
Change Orders: Get It in Writing Before the Work Is Done
Change orders are among the most common sources of construction disputes. The work on a project rarely matches the original plans exactly. Conditions turn out differently than expected, the owner requests changes, or a problem in the field requires a different approach. The dispute arises when the work changes but the change is not documented, and the parties later disagree about whether it was authorized and what it should cost.
The core problem is the verbal change order. A contractor is told to proceed with additional work, does it in good faith, and then finds the owner disputing the charge because there was no written authorization. Most construction contracts require change orders to be in writing and signed before the work proceeds, and a contractor who does the work on a verbal instruction may struggle to get paid for it. That point can be especially important on residential projects. Michigan law may condition a contractor’s lien rights against a residential owner’s interest on a written contract and written amendments or additions. Contractors should not assume that a verbal field authorization will preserve the same remedies as a properly documented written change.
Protecting against change-order disputes comes down to a few disciplines:
Follow the contract's change-order procedure. If the contract requires written, signed change orders before work proceeds, follow that process even when the schedule pressure pushes toward proceeding on a handshake.
Document changed conditions immediately. When field conditions differ from the plans, document them with photos and written notice before proceeding, so there is a record of why the change was necessary.
Do not rely on verbal authorization. If the owner or general contractor directs a change verbally, confirm it in writing before doing the work, or at minimum send written notice memorializing the instruction and stating that it constitutes a change to the contract.
The discipline can feel like friction in the moment, but the alternative is doing work you may not get paid for. A change confirmed in writing before the work is done is rarely a dispute; a change done on a verbal say-so frequently becomes one.
Delay Claims: Who Is Responsible, and What Does the Contract Say?
Schedule delays are almost inevitable on construction projects, and they generate disputes because delay is expensive and each party wants the other to bear the cost. A delay can trigger liquidated damages against the contractor, extended overhead costs, acceleration costs, and knock-on effects for other trades. Who absorbs those costs depends on who caused the delay and what the contract says about it.
Liquidated-damages clauses may set a daily amount for unexcused late completion. Their enforceability can depend on whether the amount was a reasonable estimate of anticipated loss when the contract was made rather than an unenforceable penalty.
Delay claims turn on a few key questions:
Who caused the delay. Owner-caused delays (late decisions, design changes, access problems), contractor-caused delays (understaffing, sequencing errors), and delays caused by neither party (weather, unforeseen conditions) are treated differently.
Whether the delay was excusable and whether it was compensable. Some delays excuse the contractor from liability but do not entitle it to additional money; others entitle the contractor to both more time and more money. The contract language draws these lines.
Whether notice was given. Most contracts require the contractor to give written notice of a delay and a claim for additional time or money within a defined period. Failing to give timely notice can waive an otherwise valid delay claim.
What the contract says about liquidated damages and no-damages-for-delay. Liquidated damages clauses set a daily amount the contractor owes for late completion. No-damages-for-delay clauses attempt to limit the contractor to additional time rather than money, and their enforceability can depend on the circumstances.
Delay claims are documentation-intensive. Contemporaneous records of the schedule, the cause of each delay, and timely written notice are what make or break these claims. A contractor that can show, day by day, what caused a delay and that it gave the required notice is in a far stronger position than one reconstructing the timeline after the fact.
Scope Disputes: What Was Actually Included
Scope disputes are a close cousin of change-order disputes. The question is whether a given item of work was included in the original contract price or is extra work the contractor should be paid more to perform. These disputes arise from ambiguous plans and specifications, gaps between drawings and specifications, and assumptions each side made that were never written down.
The contract documents govern, and they are usually read as a whole, with the plans, specifications, and contract terms interpreted together. Where they conflict, the contract often specifies an order of precedence that determines which controls. Ambiguities may be interpreted against the party that drafted the document. The practical protection against scope disputes is precision at the front end: a clear, detailed scope of work, coordinated plans and specifications, and written clarification of any assumptions before the contract is signed. Where a scope question arises during the project, addressing it in writing through the change-order process, rather than absorbing it or proceeding on assumption, prevents it from becoming a payment dispute at the end.
Payment Disputes and Michigan Lien Rights
Payment is where many construction disputes ultimately land. A contractor or subcontractor completes work and does not get paid, whether because of a genuine dispute over the work, a payment dispute higher up the chain, or an owner or general contractor with cash flow problems. Michigan construction law gives unpaid contractors and suppliers important tools, but those tools come with strict requirements and deadlines.
The construction lien is the most significant. Under Michigan's Construction Lien Act, contractors, subcontractors, suppliers, and laborers who provide improvement to real property generally have the right to claim a lien against the property to secure payment. A construction lien can be a powerful collection tool, because it attaches to the property itself. But the lien rights depend on following the Act's requirements precisely, including deadlines for notices and for recording and enforcing the lien. Missing a required notice or a filing deadline can forfeit the lien right entirely, which is why these deadlines deserve careful attention from the start of a project rather than after payment goes unpaid.
Other payment protections come into play as well. Payment bonds on some projects provide a claim against a surety when payment is not made. Contract provisions on progress payments, retainage, and conditions for final payment govern the timing and requirements of payment. And prompt-payment expectations, along with the contract's own payment terms, define when payment is actually due. Because the lien deadlines in particular are unforgiving, understanding these rights at the outset of a project, not when a payment problem arises, is what preserves them.
Documentation Decides Most Construction Disputes
Across change orders, delays, scope, and payment, one theme runs through every construction dispute: the party with better documentation usually prevails. Construction generates a great deal of paper and data, and the projects that avoid disputes, or win them, are the ones where that record is created contemporaneously and kept organized.
Written change orders, signed before the work proceeds whenever possible.
Daily reports, photos, and schedule records that capture conditions and progress as they happen.
Timely written notice of delays, changed conditions, and claims, in the form and within the deadlines the contract requires.
Organized records of payment applications, approvals, and lien-related notices and deadlines.
None of this requires elaborate systems. It requires the discipline to create the record as the work happens, because the record created in real time is far more persuasive, and far more useful, than the one reconstructed once a dispute is underway.
Building In Protection From the Start
The recurring construction disputes, change orders, delays, scope, and payment, are largely predictable, which means they are largely preventable. Clear contract terms, disciplined use of the change-order process, contemporaneous documentation, and attention to the notice and lien deadlines that Michigan law imposes are what keep these frictions from becoming expensive disputes. When a dispute does arise, those same practices are what determine who comes out ahead.
Oxbridge Legal Services PLLC helps Michigan construction businesses with contracts, change-order and delay disputes, and payment and lien issues. If you are dealing with a construction contract dispute or want to strengthen your contracts and documentation practices before one arises, click here to schedule a consultation.
