What is a 'change order' in construction contracts?

A 'change order' in construction contracts is fundamentally a document that modifies the original construction agreement. This modification can encompass various elements of the project, such as changes in scope, materials, timelines, or costs. It serves as an official record of any changes that have been agreed upon by all parties involved—typically the client and the contractor.

Change orders are essential because they help to ensure that all modifications to the project are documented and legally binding, thus reducing the potential for disputes later on. They also provide a structured method for addressing unforeseen circumstances that may arise during the construction process.

This understanding highlights the importance of accurate documentation to maintain clarity and accountability in the project. It is through change orders that negotiations regarding additional costs or timeline extensions can take place, providing a formalized process for managing the evolving nature of construction projects.