Change Orders are a Constant for Construction Industry

by Sandy Griffis, Executive Director, Yavapai County Contractors Association
First of all, I am not an attorney and cannot dispense legal counsel. I can, however, write about the importance of change orders during construction.
To quote Wikipedia: “In project management, change orders are also called variations or variation orders. Any modification or change to works agreed in the contract is treated as a variation. These modifications can be divided into three main categories: addition to the work agreed in the contract, omission to work agreed in the contract and substitution or alteration to work agreed in the contract.
“A change order is work that is added to or deleted from the original scope of work of a contract. Depending on the magnitude of the change it may or may not alter the original contract amount and/or completion date. A change order may force a new project to handle significant changes to the current project.”
Change orders are common to most projects. After the original scope (or contract) is formed, complete with the total price to be paid a client, it may be decided the original plans do not best represent the client’s definition for the finished project. Accordingly, the client will suggest an alternate approach and a change order happens.
If change is a constant in life, the same holds for home improvement projects. Few projects remain the same from beginning to end. As with other creative ventures, edits, tweaks and nudges happen along the way. Change orders make that happen.
Change orders are pretty normal and expected during construction. It is nearly inevitable that some sort of change will happen during construction, and a change order will modify the original contract to accommodate the change. More importantly, change orders legitimize desired changes and keep everybody on the same page. They help create a paper trail and a chronology of changes to the project, and change orders are important legally if either party brings forward a lawsuit.
Either the homeowner or the contractor can request a change order. Remember, a project change order initiated by one party will not automatically trigger the work. Both parties must agree to and sign off on the change.
The most common event that initiates a change order is when the homeowner decides to add and/or delete an item in the contract. Every change in the contract, even the smallest change, must be documented in the form of a change order to protect the homeowner and the contractor.
A change order needs to contain the date of the original contract; date of the change order; original cost; the cost of change and a detailed description of the work to be performed; and also note a change in the completion date of the project. A change order avoids any misunderstanding and disputes on what was changed during the course of construction and the applicable price for the change.
So remember this: Changes happen. A change order needs to be executed for work added or removed from the original scope of work and signed by client and contractor before work began. A change order is a bilateral agreement between parties to the contract. A change order represents the mutual consent between the parties to the change to the work, the price, the schedule, or other terms that have been modified.