What is a change order?

Every job of any size changes. The customer adds a run of drain, the ground turns out to be rock, the plan the architect drew does not fit the site. None of that is unusual. What separates a profitable job from an argument is whether the change got written down before the work happened.

What belongs on one

• What is changing, described plainly enough that somebody who was not there can tell what was added or removed.
• What it costs, or how it will be priced if the amount cannot be known yet, such as a unit rate for rock or an hourly rate for unforeseen work.
• What it does to the schedule. Left out constantly, and then the same customer who approved two weeks of extra work is unhappy the job finished two weeks late.
• Signatures from both sides, dated, before the work starts.

Who pays for a change order

It depends entirely on why the change happened, and this is where most disputes actually live.

The owner pays when they asked for something different, when the plans or specifications were wrong or incomplete, or when a genuinely unforeseeable site condition turned up, which on dirt work usually means rock, water or something buried nobody knew about.

The contractor absorbs it when the change is fixing their own error, or when it is work a competent contractor should have anticipated and priced. A condition you could have seen on the site walk is not an unforeseen condition.

Which is why an exclusions list on the original contract matters as much as the change order process itself. If rock, unsuitable soil, water and unexpected disposal were excluded in writing with unit prices attached, the change order writes itself and nobody argues about whose problem it is.

Why verbal changes cost money

Nobody refuses to sign at the moment they ask for the extra work. They refuse to pay for it three months later, when the job is finished, the enthusiasm has worn off and the invoice arrives with a number on it nobody remembers agreeing to.

By then the argument is about memory, and memory belongs to whoever is holding the money. A change order signed on a phone at the tailgate takes two minutes and removes the entire conversation.

The one that quietly does the most damage

Not the disputed change order. The one that was done and never billed at all, because it was small, or the crew handled it without telling the office, or somebody meant to write it up later. That work consumed labor, materials and machine time, and it shows up at the end of the year as a job that mysteriously underperformed.

Common questions

What is a change order in construction? A written, signed agreement that changes the scope, price or schedule of work already under contract. It amends the original agreement rather than replacing it, and it needs both parties' signatures to be worth anything.

Who pays for change orders? Whoever caused the change. The owner pays for work they requested, for errors or gaps in the plans and specifications, and for genuinely unforeseeable site conditions. The contractor absorbs changes fixing their own mistakes or covering work they should reasonably have anticipated and priced.

Does a change order have to be in writing? Practically, yes, and most contracts require it explicitly. A verbal agreement is only as good as two people's memories at the moment payment is due, and by then the incentives have moved.

What is the difference between a change order and a variation order? Mostly vocabulary. Change order is the usual North American term; variation order is common under British and international forms of contract. Both mean a formal, agreed change to work already under contract.

Should a change order include the schedule? Yes, and leaving it out is one of the most common mistakes. Extra work takes extra time, and a customer who approved the cost but never approved the delay will still be unhappy the job ran late.

What happens if the work is done before the change order is signed? You are relying on goodwill. Sometimes it is fine, particularly with a customer you trust. But an unsigned change is not something you can enforce, and on a job where the relationship sours it is the first thing to be disputed.