What is a "change order" in construction?

A "change order" in construction is fundamentally defined as a written agreement that formally modifies the original contract terms. This document is essential because it provides a clear and documented method to amend the contract when there are changes in the scope of work, specifications, or other project details. Change orders can arise from various factors, such as unforeseen conditions, changes requested by the owner, or adjustments necessary to meet building codes.

This written nature of the change order is critical as it helps avoid misunderstandings between parties regarding what has been agreed upon. It ensures that all stakeholders are on the same page, and it serves as a formal record for any additional costs or changes in timelines that may result from the adjustment.

In contrast, the other options do not accurately capture the essence of a change order. A verbal agreement is informal and does not provide the necessary documentation required in construction practices. A financial penalty, while possibly related to project delays, does not pertain to changes in the work being performed or modifications of contract terms. A request for additional materials might be part of a change order process but is not, in itself, sufficient to represent the full definition of a change order, which encompasses the alteration of contract terms rather than just material needs.