Change Order Documentation: Getting It Right

A change order is any modification to the original scope, price, or schedule of a contract, and the single most common source of construction payment disputes is a change that was approved verbally on site but never documented before the work happened.

A proper change order, at minimum, should describe the specific change in scope clearly enough that someone unfamiliar with the conversation could understand exactly what changed, state the price impact (an added cost, a credit, or both if some original scope is being removed), state any schedule impact, and be signed or otherwise formally approved by someone with actual authority to approve costs -- not just whoever happened to be on site that day.

The reason this matters financially: without a signed change order, a contractor doing extra work is relying on the owner's goodwill to get paid for it, and an owner who did not clearly approve a cost increase has a legitimate basis to dispute the bill. Both sides are protected by documentation that neither side can be protected by memory of a conversation.

A practical habit that prevents most disputes: no change work proceeds until the change order is at least acknowledged in writing (even a text message or email confirmation can serve as evidence, though a proper signed change order form is stronger), and every change order should be tracked cumulatively against the original contract sum, so both sides always know the current total contract value, not just the original number from months ago.