What is the function of a change order in a contract?

• A. To simplify communication between parties
• B. To outline potential disputes
• C. To separate costs related to changed work
• D. To consolidate all contract terms into one document

Answer: (C)

The function of a change order in a contract primarily revolves around managing modifications to the original agreement, specifically regarding the scope of work. When changes to the project arise—whether due to unforeseen circumstances, client requests, or other factors—the change order formally documents these alterations. This includes specifying any additional costs incurred as a result of the changed work. By clearly separating the costs associated with these modifications from the original contract, a change order ensures transparency and prevents disputes over payment for additional work. Thus, the change order serves a critical role in maintaining the integrity of the financial aspects of a contract while adapting to necessary adjustments in project requirements.