Change Orders

Why This Matters on the Exam

Change order disputes are among the most expensive liability exposures for contractors. Customers dispute charges for work they claim wasn't authorized. Contractors struggle to collect payment for extra work they performed. The California licensing board disciplines contractors who don't follow proper change order procedures. Here's what I'll tell you straight: mastering the legal requirements for changes prevents disputes, protects your right to collect payment, and shields you from licensing complaints. This is the difference between a profitable job and a lawsuit.

What You Must Know

Here's the bottom line: Any change to the original contract scope, price, or timeline must be documented in a written change order before the additional work begins. Verbal agreements for extra work are legally problematic—you cannot reliably enforce payment for unauthorized work. A change order must describe what scope is being added, how the price changes, and how the timeline is affected. Both the contractor and customer must sign the change order before work starts. Performing unauthorized extra work without a signed change order creates collection and discipline risk.