How does a change order affect the contract?

• A. It changes only the schedule; cost remains the same.
• B. It adds or subtracts cost and time; must be approved by owner and contractor.
• C. It eliminates any need for permits.
• D. It is an optional document not required for changes.

Answer: (B)

A change order is a formal amendment to the contract that authorizes modifications to the scope of work, and it affects both cost and schedule. When the work changes, the price can go up or down and the project timeline may shift, so the document must document these adjustments. Because it changes what is being done and who pays for it, a change order requires written approval from both parties—the owner and the contractor—to be binding. This keeps the project money and timing clear and helps prevent disputes over unauthorized work. It’s not about bypassing permits or being optional; changes can also impact permitting needs, but the key purpose of a change order is to officially authorize and price the revised scope and revised schedule.