Running the Business · Part 3
Change orders: written, signed, before the work. Every time. Why verbal ones end in CSLB complaints
The change order is where a residential plumbing job most often turns into a CSLB complaint, because the extra work was real, the customer agreed to it at the time, and nothing was written down. Under Business and Professions Code section 7159, a change is not part of the contract, and is not enforceable against the customer, unless it is in writing, signed by both, before the work, and states the scope, the price change, and the effect on the payment schedule. The contract itself must tell the customer that, in a notice they signed. This lesson explains the rule, the sentence about "unjust enrichment" that contractors mistake for a safety net, the three-minute change-order habit that makes the rule painless, and the template that goes in every truck.
What the full lesson covers
- A change order becomes part of the contract only if it is in writing and signed by both parties before the work it covers begins (7159(c)(5), (d)). Verbal changes are not part of the contract.
- It must state the scope of the extra work or change, the amount added or subtracted, and the effect on the schedule of progress payments or the completion date (7159(d)(13), (e)(3)).
- The customer holds a signed notice that an unwritten change order is not enforceable against them (7159(e)(3)). They will use it.
- The "unjust enrichment" sentence means you may sue for the value of the extra work you were not paid for; it does not mean you will be paid your price, and it does not stop CSLB from citing you for the missing change order.
- The habit: stop, write it on the form, price it from the book or the worksheet, get the signature, then do the work. Payment for the change follows the work, never precedes it.
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More lessons in Contracts and Getting Paid
- 1The home improvement contract (B&P 7159): every required element, the exact notices, and the three-day right to cancel
- 2The deposit cap: $1,000 or 10 percent, whichever is less, and progress payments that cannot exceed the work. CSLB's most common citation
- 3Service and repair contracts (B&P 7159.10): when the short form applies, what it must say, and how a service call falls out of it
- 4Subcontracts with GCs: the twelve clauses to read, what to strike, and what to negotiate