What does the term 'change order' refer to in construction projects?

The term 'change order' specifically refers to a document that modifies the original contract between the parties involved in a construction project. Change orders are necessary when there are alterations in the scope of work, adjustments in project specifications, or changes in project costs and timelines that were not a part of the initial agreement. This modification is crucial because it officially documents any changes that affect the contract's terms, ensuring that both parties have a mutual understanding and agreement around the new stipulations.

This understanding is important in construction management as it helps maintain clear communication and mitigates disputes that might arise from verbal agreements or informal changes. Change orders can also outline additional costs and how they will be managed, along with any extensions in deadlines that may result from the changed work. Thus, understanding the role and importance of change orders is vital for effective project management and compliance with contractual obligations.