Introduction:
In construction projects, especially large-scale or complex environments, communication breakdowns and misunderstandings can lead to costly delays, unapproved changes and legal disputes. One of the primary culprits behind these issues is the reliance on verbal agreements. While verbal agreements may seem convenient in fast-paced situations, they often result in unclear expectations, lack of accountability and financial risk. To safeguard against these challenges, it is crucial for subcontractors, contractors and project managers to implement practices that emphasize written communication and documentation from the start. This guide provides practical steps to help avoid verbal agreements and ensure that all important project decisions and changes are clearly documented.
Practical Steps
Avoiding verbal agreements in construction projects, especially in large-scale or complex environments, is crucial to ensure clear communication, accountability and proper documentation of any changes or instructions. Here are some practical steps that subcontractors, contractors and project managers can take to avoid verbal agreements and ensure that all important information is recorded in writing:
1. Set Expectations from the Start
From the outset of the project, make it clear to all parties—whether owners, general contractors, subcontractors or suppliers—that all agreements, changes or requests must be documented in writing. Establishing this expectation at the beginning helps prevent verbal agreements from becoming the norm and creates a culture of written communication.
2. Create Clear Communication Protocols
Establish formal communication procedures in the contract or project management plan that outline how all project-related communication should occur. This can include:
- Daily reports: Document progress, challenges or issues that arise on-site.
- Submittal processes: Create a process for submitting change requests, approvals or variances in writing.
- Email or project management software: Encourage communication via official channels like email, project management software or other platforms where documentation is automatically stored and tracked.
3. Insist on Written Confirmations
If you receive verbal instructions or requests during a meeting or on-site, immediately follow up with written confirmation. This can be done by sending an email or filling out an official form that summarizes the conversation and asking the other party to acknowledge and approve it in writing. For example:
- After verbal instructions: “As per our conversation on-site today, please confirm your approval for XYZ change to the work. Attached is a formal change order for your review.”
- In meetings: After a meeting where decisions are made, send out meeting minutes summarizing key points and request written confirmation from all participants.
4. Use Field Work Orders or Written Directives
When something needs immediate action on-site, ensure that field work orders or written directives are used. These are simple forms used to approve minor changes or directives that occur in real-time. Even if the work starts immediately, ensure that a written order is filled out promptly and signed by the appropriate parties.
5. Document Conversations and Instructions Immediately
If a situation arises where verbal instructions are given—such as during an emergency or in a fast-paced situation—document the conversation as soon as possible. Send an email or text message to the relevant parties summarizing the verbal agreement and requesting confirmation in writing. This creates a timestamped record and ensures that everyone is aware of what was discussed.
Example:
- Email summary: “During today’s site visit, we discussed relocating the equipment to the east section of the property. Please confirm this directive in writing, and I will proceed with the necessary adjustments.”
6. Implement Written Standard Operating Procedures (SOPs)
Develop and implement written SOPs that govern how specific requests or changes should be communicated, approved and documented. These can include SOPs for:
- Change orders
- Time extensions
- Scope changes
- Variances
- Resource reallocations (diversions)
Having predefined processes ensures that verbal agreements are less likely to occur, as employees and subcontractors will have a clear roadmap to follow.
7. Leverage Technology
Use construction project management software to centralize and streamline communication. These platforms create built-in documentation for all communications, reducing the reliance on informal or verbal agreements. Features like task assignments, change order management and RFI (Request for Information) tracking automatically log interactions and approvals.
By requiring all communications and changes to go through the software, you minimize the risk of verbal agreements going unrecorded.
8. Train Your Team
Ensure that all employees, supervisors and subcontractors are trained on the importance of avoiding verbal agreements. They should be taught to:
- Always follow up on verbal discussions with written documentation.
- Use project management tools or official forms to log requests and approvals.
- Know the risks of not having written documentation, such as misunderstandings or disputes.
9. Use Contracts to Enforce Written Communication
Include a clause in your contracts that states all changes, approvals and communications must be in writing to be legally binding. This provides an extra layer of protection, ensuring that verbal agreements cannot be used as a basis for claims or disputes. A typical clause could read:
“Any modifications, changes or directives that alter the scope of work, schedule or cost must be made in writing and agreed upon by both parties. Verbal agreements or instructions shall not be recognized or enforceable.”
10. Record Meetings
If regular project meetings are a key communication method, consider recording important meetings (with all parties’ consent) or having a dedicated note-taker present. Meeting minutes should be distributed afterward for review and signed approval to confirm the decisions made.
Why Avoid Verbal Agreements?
Verbal agreements can lead to several problems on construction projects, such as:
- Disputes: Without a clear paper trail, verbal agreements often lead to disagreements about what was actually said or promised.
- Lack of Accountability: It’s hard to hold parties accountable if there’s no written record of their responsibilities or commitments.
- Financial Risk: Verbal agreements can result in unapproved costs, delays or scope changes that affect the project budget.
- Legal Vulnerability: In many jurisdictions, courts may not recognize verbal agreements, leaving one party at a disadvantage if disputes arise.
By emphasizing clear communication and ensuring that all project-related decisions are documented in writing, construction teams can avoid costly misunderstandings and ensure that all parties are on the same page. This approach also improves accountability and provides solid legal standing in case disputes arise.