Construction Contract Change Order

A construction change order is a written amendment to a construction contract that documents an agreed change to the scope of work, the contract price, the schedule, or all three. Change orders are needed because construction projects frequently require modifications due to design revisions, unforeseen site conditions, owner requests, material substitutions, or code requirements, and the original contract cannot anticipate every adjustment. The change order records what work is being added, removed, or altered, the resulting change in price, and any extension of the completion date, so both the owner and the contractor agree before the changed work proceeds. Using a signed change order prevents disputes about whether extra work was authorized and what it costs, which is one of the most common sources of construction conflict. Once both parties sign, the change order becomes part of the contract. Because uncontrolled changes lead to cost overruns and disputes, documenting every modification with a change order protects both the owner and the contractor.

A construction change order should include a clear description of the change to the work, the adjustment to the contract price, any change to the project schedule, and the signatures of both the owner and the contractor. The description should specify exactly what is being added, removed, or modified relative to the original scope, referencing affected plans or specifications where applicable. The price adjustment should state whether the cost is increasing or decreasing and by how much, and how it was calculated. If the change affects the completion date, the new schedule or the number of additional days should be stated. The change order should also reference the original contract and assign a number for tracking, since projects often have many changes. Both parties sign to confirm agreement before the work proceeds. Because the change order modifies a binding contract, including the scope, price, schedule, and signatures ensures both the owner and contractor share the same understanding of the change and avoids disputes about authorization or cost.

A contractor generally should not do extra work without a signed change order, because performing changed work without written authorization often leads to disputes about whether the owner agreed to it and what the contractor should be paid. Most construction contracts include a change order clause requiring that modifications be documented and approved in writing before the work proceeds, and a contractor who performs extra work without following that process risks not being paid for it. While courts sometimes recognize claims for unauthorized extra work under theories such as an oral modification or unjust enrichment, relying on those is uncertain and contentious. For the owner, the requirement protects against unexpected charges for work they did not approve. The safe practice for both parties is to agree on the scope, price, and schedule change and sign a change order before the contractor begins the additional work. Because written change orders prevent payment disputes, contractors should obtain the owner's signature before proceeding with any extra work outside the original scope.

A change order affects the construction contract price by adjusting it up or down to reflect the agreed change in the scope of work. When the change adds work, the change order increases the contract price by the cost of that additional work, and when it removes work, it decreases the price accordingly. The change order should state the price adjustment clearly and, ideally, how it was calculated, whether by a lump sum, unit pricing, or cost plus a markup, depending on the method the contract uses for changes. Cumulatively, change orders revise the total contract price over the life of the project, so tracking them with numbers helps both parties keep an accurate running total. Because change orders can significantly increase the final cost of a project, owners should review each one before signing and understand how the adjustment was determined. Documenting the price change in a signed change order ensures that both the owner and contractor agree on the revised amount before the changed work is performed.

A construction change order generally must be signed by both the property owner and the contractor to be effective, since it modifies their binding agreement. The owner's signature confirms that they authorize the change and accept the adjusted price and schedule, while the contractor's signature confirms agreement to perform the changed work for the stated amount and timeline. On larger projects, an architect or project manager may also review or recommend the change order, and some contracts designate a representative authorized to approve changes on the owner's behalf. Because the change order alters the contract, the person signing for each party should have authority to bind that party. Subcontractors affected by the change may have their own change orders with the general contractor. The key point is that both contracting parties must agree before the changed work proceeds, which is why mutual signatures are required. Obtaining the proper signatures before performing the work protects both the owner and the contractor from later disputes over authorization and cost.