Change Order
A change order is a formal written amendment to a construction contract that modifies the original scope of work, adjusts the contract price, or changes the project timeline. Change orders are initiated when the owner requests additional work, when unforeseen site conditions arise, or when design errors require field corrections. They must be approved by both parties before the additional work is performed.
Updated July 13, 2026
Key Facts
- 1Industry data shows that commercial construction projects experience an average of 35 change orders during construction, with cumulative costs adding 10–15% to the original contract price
- 2Undisclosed existing conditions (buried utilities, asbestos, hidden structural issues) are the most common cause of unplanned change orders in commercial tenant improvements
- 3Change orders that add scope have a GC markup applied — the same 15–25% overhead and profit that applies to original contract work
How Change Orders Work
When additional or different work is identified, the GC prepares a change order request (COR) describing the work, the cost impact, and the schedule impact. The owner or tenant reviews and signs off — or negotiates the price — before the GC proceeds. Unsigned change orders that proceed anyway create costly disputes at the end of a project.
A proper change order process includes: written description of the changed scope, unit pricing or time-and-materials breakdown, impact on the project completion date, and signatures from both parties. This paper trail protects everyone when disputes arise about what was agreed.
How to Minimize Change Orders
The best way to minimize change orders is to invest in thorough pre-construction documentation. Complete architectural drawings with detailed specifications leave less room for field interpretation. A thorough existing conditions survey (documenting what's inside walls, above ceilings, and underground) prevents surprise discoveries that require scope changes.
Avoid starting construction before design is finalized. Every design change made after construction begins costs 3–5x more than it would have during the design phase.
Frequently Asked Questions
Can I refuse a change order?
Yes. A change order requires mutual agreement. If a GC claims additional work is necessary and you disagree, you can dispute it. However, if the GC is correct that the work falls outside the original scope, refusing a change order may result in incomplete or non-compliant construction.
What if a contractor does work without a signed change order?
This is a significant problem. Unsigned work creates dispute risk at project closeout. In many states, courts will not enforce payment claims for work done without written authorization. Always require written change orders — and withhold payment for undocumented scope additions.
What is a 'constructive change'?
A constructive change occurs when an owner's actions effectively change the contractor's work without a formal change order — for example, demanding a faster schedule or requiring work in a different sequence. Courts have found that constructive changes entitle contractors to additional compensation even without a formal signed change order.