Change of scope: Overview, definition and example
What is a change of scope clause?
A change of scope clause is a provision in a contract that outlines how changes to the scope of work or services will be handled during the contract’s term. It defines the process for modifying the original agreement, such as adding, removing, or altering the work or services to be performed. This clause ensures both parties understand how changes will impact timelines, costs, and other important aspects of the contract.
Why is a change of scope clause important?
A change of scope clause is important because it provides clarity and flexibility when unexpected adjustments are needed. It helps avoid misunderstandings or disputes by setting clear guidelines for how changes should be requested, reviewed, and approved. For businesses, this clause protects them from scope creep—when the project or service expands beyond the original agreement—while still allowing for necessary adjustments. It ensures that both parties are on the same page regarding any changes to the original terms.
Understanding a change of scope clause through an example
Imagine a company hires a software development firm to build a custom application with specific features. The contract includes a change of scope clause that allows the client to request additional features if needed. Midway through the project, the client requests a new feature not initially included. According to the change of scope clause, the software firm reviews the request, agrees to the new feature, and provides an updated timeline and cost estimate.
In another case, a business signs a contract with a supplier for 1,000 units of a product. The contract includes a change of scope clause that allows the buyer to adjust the order quantity. A few weeks into the contract, the buyer decides to increase the order to 2,000 units. The supplier and buyer agree on the new terms, and the contract is updated to reflect the change.
Example of a change of scope clause
Here’s how a change of scope clause might appear in a contract:
“Any changes to the scope of work must be documented in writing and approved by both parties. Changes may result in adjustments to the contract price and delivery timeline.”
Conclusion
A change of scope clause is a valuable tool for managing the flexibility of a contract. It sets expectations for how modifications will be handled and protects both parties from misunderstandings or unexpected costs. By clearly defining the process for making changes, businesses can ensure that any adjustments are fair, agreed upon, and aligned with the contract’s original goals.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.