GUIDE
What Is a Change Order? Definition, When You Need One, and Template Fields
Updated
A change order is a written agreement that changes a construction contract after it has been signed. It covers new work, removed work, a different price or a different timeline. If it isn’t in writing and signed, it’s hard to get paid for.
When you need a change order
- The client wants an upgrade, such as a larger window or different tile.
- You find something hidden when you open a wall, like rot or old wiring.
- An inspector or code rule requires extra work.
- Materials are unavailable and a substitute costs more or less.
- The schedule moves because of a client decision.
Small stuff counts too. “Can you also move this outlet?” is a change order, even at $80.
What a change order should include
| Field | Example |
|---|---|
| Change order number | CO-001 |
| Original contract / estimate reference | Estimate 1042, kitchen remodel |
| Date and parties | Contractor and client names |
| Description of the change | Add under-cabinet lighting, 12 ft |
| Reason | Client request |
| Price change | + $640 (labor $360, materials $280) |
| New contract total | $18,940 |
| Schedule impact | + 1 working day |
| Signatures and dates | Client and contractor |
How to handle a change order
- Stop and price it. Don’t start the extra work on a handshake.
- Write it down using the fields above. A good estimate template already has the line-item layout.
- Show the effect on price and time so the client sees the new total.
- Get a signature before you order materials or do the work.
- Bill it. Add the amount to the next invoice or as its own line.
Use the same markup you used on the original job, or the extra work will earn you less than the main contract did.
Change order vs addendum
An addendum is a broader term for anything added to a contract. A change order is the specific kind that changes scope, price or time. Many contractors use the two words for the same piece of paper.
Frequently asked questions
What is a change order in construction?
A change order is a written document, signed by both the contractor and the client, that changes the original contract. It records the new work or removed work, the price difference, and any schedule change.
When do you need a change order?
Any time the scope, price or timeline changes after the contract is signed. That includes client upgrades, hidden conditions found during work, and code or inspection requirements.
Can I start the extra work before the client signs?
It is risky. Without a signed change order you may not get paid for the extra work. Get the signature first, or at least a written yes by email or text.
Who pays for a change order?
Usually the party who asked for the change. If the client requested it, they pay. If it is a contractor mistake, the contractor normally absorbs it. Your contract should say.
Is a change order the same as a new estimate?
It is a mini estimate attached to an existing contract. It lists only what changes and amends the original price and schedule.