Why are change orders important in construction contracts?

Change orders are crucial in construction contracts because they serve to formally authorize modifications to the original scope of work. They play a significant role in clarifying both legal and financial aspects of the project when changes are necessary.

When a change order is issued, it outlines the specific changes to the work agreed upon by both the contractor and the client, including adjustments in costs and timelines that result from these changes. This helps prevent disputes regarding what was agreed upon and ensures that all parties have a clear understanding of their obligations moving forward. By documenting these changes, the parties also establish a legally binding record that can be referred to later if any disagreements arise.

Therefore, the importance of change orders lies in their ability to maintain the integrity and clarity of the contract throughout the construction process.