How should I use a 'Change Request' in my contracts? | Law 365

Whether you’re gearing up to start a specific project or provide ongoing services with a customer, it’s likely you’ll need to negotiate and agree certain aspects, such as the scope of services, the deliverables, and a project timescale.

Once everything is agreed, you’ll want to crack on with the project as planned (hooray!). However sometimes change is inevitable...

What is a Change Request?

Often you or your customer may need certain aspects to change, to be added to or even removed during the term of the contract.

Fortunately, there’s a practical solution for a Party to ask for a specific change, which is rather aptly named a ‘Change Request’.

In simple terms, it’s a proposal by one party to amend an aspect of the project/services that you have pre-agreed with your customer.

A Change Request can be requested by either party.

Is a Change Request the same as a contract variation?

A Change Request still varies the overall contract (usually the Statement of Work), so yes, it is a contract variation.

However, typically a Change Request doesn’t alter key terms and conditions, for example any liability caps or indemnities you’ve agreed.

Instead, it usually focuses just on the specifics of the services/deliverables that require changes. If you want to change fundamental terms and conditions, that’s when we’d recommend using a formal contractual variation.

What is the standard process of managing a Change Request?

There is no one correct way to manage the process, however, we have set out below some key points to consider:

1. Agree a Change Request procedure

   This should include:

   • When a change is required
   • Who should receive change requests? Both parties should nominate a representative to be the main point of contact when it comes to making and accepting Change Requests.
   • What information should the request contain?
   • Timings -- what are the timings of approving/rejecting a request (this will be dependent on the scope of the change, but timing should always be reasonable).

2. Review each Change Request

   When you receive a Change Request, you will need to review it and approve (or deny) the request. This will often involve several different departments (possibly even director or C-level) to consider the scope and impact of the change – including any possible risks, the costs and likely timelines etc.

3. Estimate the implications of the request

   Even though a Change Request can come from either of the parties, the supplier, as the party suppling the services, should provide the customer with a written estimate of the change impact, detailing:

   • the time required to implement the change
   • any necessary variations to the fees
   • the likely effect of the change on the project/services
   • any other impact of the change on the terms of contract.

4. Accept/Reject the request

   The customer will then consider the supplier’s proposal and then accept or reject the proposal within a certain agreed time period, i.e. a week.

5. Complete the request

   If approved by both parties, the Change Request will be deemed incorporated into the terms of the contract, you should now consider the next steps.

   This is the important bit. You now need to execute the changes you’ve agreed to. This will often include holding a meeting with your customer to iron out the details and to either create new (or to amend existing) plans and schedules, business process documents etc.

What should be included in the Change Request?

The format of the initial Change Request will vary on the services, but generally, we’d suggest that requests should be made in writing and the party requesting the change should provide any supporting materials that might be helpful. An initial request should include:

• the individual and name of the organisation requesting the change
• the date of the request
• a description of the change – with adequate detail for the other party to make a proper assessment of the change

Why include the process in a contract?

It’s often helpful to agree to a Change Request process, like the one set out above, before the services are carried out, so each party knows exactly what is expected of them, should a change be needed.

Each party will be bound to the format of a request and the process, so this provides clarity for everyone.

Other important things to consider

• Are there additional charges?
• Sometimes considering and implementing Change Requests can be a lengthy process outside of the scope of services. In these circumstances, it may be fair to ask that the customer pays a reasonable fee for your time to make their requested changes.
• Could you provide a Change Request Form?
• You can also consider agreeing a specific format of the request within the contract, this is often called a Change Request Form and can be added to the contract as a schedule.
• Are there exceptions to the Change Request procedure?
• You should consider ‘carving out’ that you are entitled to make certain minor changes without a formal Change Request, for example, where you are required to do so to comply with any applicable laws.
• Create a log of all requests.
• Change Request volumes related to a contract can be extensive and because they are separate to the original contract, can be difficult to track. You should consider keeping a log of all Change Requests applied to a contract, so that you always have a clear view of all present obligations.

Meet your technology talking lawyers

If you're looking for answers or clarity on any of the points above, or we can provide help with your change request process, please do get in touch.

Further reading

5 reasons to avoid service credits