A Century Of Legal Service

  1. Home
  2.  • 
  3. Business Law
  4.  • Protect your profit margin from scope creep

Protect your profit margin from scope creep

On Behalf of | Jul 26, 2021 | Business Law |

Sooner or later, every contractor or project manager on a construction site will have to deal with an insidious problem that can erode your bottom line and increase costs exponentially. Collectively known as scope creep, this is an umbrella term for all the changes, additions and upgrades some clients will urge you to include on a new build or renovation.

Contractors’ goals include making their clients happy — because happy clients can bring in additional business via word-of-mouth that can be quite lucrative. Conversely, an unhappy client can badmouth a contractor almost out of business.

Where you draw the line matters

There should be no problems acquiescing to some minor requests like installing a few additional outlets in the walls of the bedrooms, for instance. But what if a client now wants a skylight where the solar panels will be or wants to expand a room by knocking down a weight-bearing wall? Agreeing to changes like those can throw you completely off budget and also potentially cause a building hazard.

Your contract is your blueprint

Whenever a client begins to bring up potential changes, whip out your contract and treat it as the blueprint it is for your particular job. If it is not included in the contract (as you already know that it’s not), your client will need to sign off on and agree to pay for the costs associated with any changes. If they are unwilling, you can point out to do more or less than what is clearly defined puts you in breach of your signed contract.

Loop in the lawyers

Some construction disputes can get wickedly ugly and drag on for months or even years. If you sense a dispute is rapidly escalating, don’t hesitate to seek the guidance of someone who understands construction and business laws in Massachusetts.