Construction Litigation Tips – Signed Slips
Extra work claims start as a dispute over the scope of work, but too often degenerate into a prolonged and unnecessary fight over damages.
Whether particular work is extra to a contract usually involves the interpretation of limited specification language or plan details, or, where those sources are ambiguous, customary trade practices.
A straightforward scope of work dispute can be resolved without a huge investment of time or legal expense because the documents and testimony relevant to the dispute are so limited. But if the extra work is substantial, and it involves furnishing labor and materials over an extended period of time, disagreement over costs of the extra work often becomes the most difficult, time consuming and expensive issue to resolve.
There is no reason to allow extra costs to become the subject of serious dispute. All that is necessary to avoid dispute over costs are conscientious daily record keeping, coupled with a commitment to share those daily records with the party against whom the claim is made.
Some contracts require that the party making the claim prepare daily slips detailing the extra labor and materials furnished that day. At the end of the day those slips are presented to the project superintendent or clerk of the works who signs to verify the quantity of labor and materials, without conceding it to be extra work. That procedure should be followed on every extra work claim, whether or not required by contract, because it is a sure way to minimize disputes over damages.
Slips reflecting extra labor and materials should be presented on a daily basis even if the other party refuses to sign. Providing an opportunity to the other side to verify extra costs is nearly as beneficial in proving a claim as the verification itself.
Maintaining and sharing daily extra work slips benefits the party making the claim in several important respects. First, it eliminates damages as a major issue which will substantially reduce the time and legal expense of any trial or arbitration. Second, the judge or arbitrator is likely to be impressed by conscientious and honest daily work records detailing costs, which can only enhance the credibility and prospects of the party making the claim. Conversely the credibility of any party who refuses to verify daily work records is likely to be diminished. And third, records accurately establishing the cost of extra work improves the prospect of settlement because compromise can be based on a clear assessment of liability where both sides know in advance what they stand to lose or gain.