Change Orders Demystified: Protecting Your Project, Timeline, and Budget
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In construction, change is inevitable. A property owner might decide they want higher-end finishes, an architect may revise plans mid-project, or a contractor could uncover hidden issues that must be addressed before work can continue. These adjustments are common — but if they’re not documented properly, they can lead to one of the most common and costly problems in construction: scope creep.
That’s where change orders come in. Change orders are the legal backbone of construction projects, providing a clear, written record of modifications to the original contract. If you’re a contractor, subcontractor, or property owner, knowing how to manage change orders can save you money, protect relationships, and keep you out of court.
What Exactly Is a Change Order?
A change order is a formal, written amendment to the original construction contract that spells out modifications to the project’s scope of work, timeline, or cost. It ensures everyone involved knows exactly what’s changing — and agrees to it.
For example, if a homeowner decides mid-project to upgrade from builder-grade tile to luxury marble, a change order will outline the cost difference, schedule adjustment, and who is responsible for what. When signed, it becomes part of the contract, creating a clear legal record of the new agreement.
Why Change Orders Are So Critical
Without change orders, construction projects can quickly spiral into disputes. Owners may balk at paying for extra work, contractors may get stuck footing the bill for unapproved changes, and deadlines may slip without a clear basis for extending them.
Properly managed change orders:
Protect contractors and subcontractors by proving that additional work was approved and priced correctly.
Protect owners by preventing surprise invoices and clarifying the impact of each change on cost and schedule.
Provide legal evidence if the project ends up in mediation, arbitration, or litigation.
In short, change orders are risk management tools that keep construction projects predictable and fair.
Best Practices for Managing Change Orders
Handling change orders effectively is about process, documentation, and communication. Here’s how to do it right and protect yourself from costly disputes:
1. Use Written Change Orders — Always: Verbal agreements are quick but risky. If you can’t prove what was agreed to, you may find yourself eating the cost of extra work. Always insist on a written, signed change order before performing additional work.
Pro Tip: Include a clause in your original contract stating that no changes are valid unless they are in writing and signed by all parties. This prevents “handshake deals” that can come back to haunt you.
2. Document Every Detail: A vague change order can create as much confusion as no change order at all. Be specific about:
Scope of Work: List exactly what’s being changed or added.
Materials: Identify brands, grades, or specifications to avoid disputes over quality.
Cost Adjustments: Break down labor, materials, and markups so pricing is transparent.
Schedule Impact: State how the change affects the project timeline, including milestone adjustments.
Approvals: Obtain signatures from the owner, contractor, and other stakeholders (like the architect).
This level of detail prevents future “we never agreed to that” arguments.
3. Act Promptly: Delaying a change order until the end of the project leads to confusion and disputes. Document changes as soon as they occur — preferably before the work is performed.
If the change impacts the project’s critical path, notify all parties right away to protect your right to a time extension or to avoid liquidated damages claims later.
4. Communicate Clearly and Often: Change orders are part of the conversation, not just paperwork. Explain:
- Why the change is needed (code compliance, design upgrade, unforeseen condition).
- How it affects cost and timing so owners can make informed decisions.
- What alternatives are available if the owner wants to control cost or schedule impact.
Clear communication builds trust and speeds up approval.
5. Keep Meticulous Records: Organized documentation is your legal safety net. Keep a running log of:
- Signed change orders
- Related correspondence (emails, texts, meeting notes)
- Photos or diagrams of changed work
- Cost records (invoices, timecards, receipts)
Use project management software or cloud-based tools so all team members can access the latest documents quickly.
Legal Consequences of Ignoring Change Orders
Failing to follow proper change order procedures isn’t just risky — it can be disastrous.
Contractors risk nonpayment. Without a signed change order, owners may refuse to pay for extra work — and courts may side with them.
Owners risk inflated costs. Lack of documentation can lead to padded invoices or duplicate charges that are hard to contest.
Lien complications arise. In Florida, improperly documented work may not be lienable, meaning contractors can’t legally enforce payment through a construction lien.
Litigation becomes likely. Disputes over undocumented changes are one of the leading causes of construction lawsuits.
Following change order best practices dramatically reduces these risks, creating a clear and enforceable record of agreements.
Final Thoughts
Change orders may feel like just another piece of paperwork, but they are critical to keeping your project legally and financially sound. By documenting every change in writing, acting promptly, communicating clearly, and keeping detailed records, you can avoid scope creep, protect your bottom line, and minimize the risk of disputes.
At the end of the day, well-managed change orders turn potential conflict into collaboration — and keep your project moving forward with confidence.
Ready to Take the Guesswork Out of Change Orders?
Every extra request, material upgrade, or unforeseen condition can put your profit — and your legal standing — at risk. At DuFault Law, we help contractors, developers, and property owners draft, review, and enforce change order provisions that keep projects on track and protect your bottom line.
- Call us at (239) 422-6400
- Email us at contact@dufaultlaw.com
- Or Visit our Contact Page to schedule a consultation
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