What are 'change orders' used for in construction?

Change orders are an essential part of the construction process, primarily used to document modifications to the original construction contract. When unexpected circumstances arise during a project, such as changes in scope, design alterations, or adjustments due to site conditions, a change order serves as a formal agreement between the contracting parties to amend the initial contract terms. This ensures that both the contractor and the client acknowledge and agree to the alterations made.

By documenting these changes, a change order safeguards against disputes that may arise regarding the project's scope, schedule, or budget. It specifies what the changes entail, the rationale behind them, and any corresponding adjustments to the contract price or completion timeline. This clarity is crucial for maintaining a transparent working relationship and ensuring compliance with legal and contractual obligations throughout the project.