What does the term "change order" refer to in construction contracts?

The term "change order" refers to a formal authorization to change the contract terms in a construction project. This typically occurs when there is a need to modify the scope of work, which can arise from unforeseen circumstances, design changes, or client requests. A change order serves as an official document that details the specifics of the changes, including any adjustments to the contract sum or timeline. By using a change order, parties involved in the construction agreement ensure that all alterations are documented and agreed upon, helping to maintain clarity and minimize disputes.

In construction, it is crucial that any modifications to the contract are handled through proper channels, which is what a change order provides. This not only helps in keeping accurate records but also ensures that both parties are on the same page regarding the new terms of the contract.