Risks And Advantages Of "Change Management" in Contracts For Services

Change management is essentially about dealing with change requests. Even small variations in the drafting can be of great benefit to the company.

 

Change management” is defined in the section of a contract for work and services in which it is agreed how change requests are to be handled and under which conditions they must be fulfilled. From the contractor’s point of view, the risk consists in the fact that the client can specify changes, which then have to be checked. If there is no response within a certain period, the contractor is obliged to implement them. Depending on the formulation of the contract, this may be irrespective of whether the contractor is able and willing to implement these changes at all. It is not uncommon for these change requests to be lost in the course of business and thus automatically become part of the contract.

The following example shows how such a change mangament clause could be formulated:

 

Change Management

All change requests must be made in written form. B GmbH will immediately check them free of charge and inform A AG about their feasibility within 3 working days. If B does not respond within 10 working days, the change request is deemed to be accepted.

As mentioned above, situations like this do not only imply financial risks, as every request has to be checked free of charge. In fact, there is also the risk that a request will be lost in business operations and subsequently have to be implemented – even if it is not at all readily possible to do so.

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