Smart Ways to Structure a Construction Contract for Smoother Change Orders

In construction projects, change is inevitable. Whether it’s a shift in scope, materials, or unexpected site conditions, change orders happen, and if they’re not handled properly, they can lead to delays, disputes, and expensive litigation.

At Ayala Law, we’ve seen firsthand how poorly managed change orders can spiral into legal conflicts between contractors, owners, and subcontractors. The good news? With the right structure in your construction contract, you can prevent many of these problems before they start.

This blog post breaks down how to structure a construction contract to manage change orders effectively, and how you can protect your time, money, and reputation.

What Is a Change Order in Construction?

Before we go further, let’s clarify the basics.

A change order is a written agreement to alter the original terms of a construction contract. This might involve:

• Changes in scope of work
• Additional labor or materials
• Extended project timelines
• Adjusted pricing

In short, it’s an amendment to the original contract, and if it’s not handled correctly, it opens the door to misunderstandings and legal disputes.

Why Do Change Orders Cause Legal Disputes?

Here are the most common reasons:

• Lack of clear written documentation
• Verbal agreements that never get formalized
• Disagreement over pricing or whether the work was authorized
• Delays caused by waiting for approval
• Work performed without owner consent

These issues often come down to poor contract language or missing procedures for handling change orders. A strong contract prevents those problems from the start.

Key Contract Clauses to Handle Change Orders the Right Way

If you’re drafting or reviewing a construction agreement, these clauses are critical for managing change orders efficiently and legally.

1. Clear Definition of a Change Order: Your contract should clearly define what qualifies as a change order and distinguish it from routine project decisions. This avoids confusion over whether extra work requires formal documentation.

What to include:

• Definition of change orders
• Examples of work that requires formal approval
• Language stating that no change is valid without written agreement

2. Written Authorization Requirement: This is the golden rule. Every construction contract should require written approval before any change work begins.

Why it matters: Without this clause, owners may claim they never approved the work, and contractors may struggle to get paid.

Pro Tip: Use language that says verbal instructions are not binding unless followed by a signed written change order.

3. Detailed Change Order Process: Spell out a step-by-step process for how change orders are proposed, reviewed, and approved.

Include:

• Who can submit a change request
• How long the other party has to respond
• Required documentation (e.g. cost estimates, schedule impact)
• What constitutes acceptance

This process should be clearly labeled in your contract with a header like “Change Order Procedure.”

4. Pricing and Payment Adjustments: Disputes often arise over how much extra work should cost. Your contract should include a method for calculating pricing, such as:

• Unit pricing
• Time and materials with markup
• Agreed-upon fixed fees

Also include terms on when payment is due for approved change orders to keep cash flow steady.

5. Schedule Adjustments for Change Orders: Changes often affect project timelines. Failing to adjust the schedule formally is a recipe for conflict.

Make sure your contract allows for:

• Extension of deadlines due to approved changes
• Documented notice requirements for requesting time extensions

6. Dispute Resolution Clause: Even with a solid contract, disagreements happen. Your agreement should include a clause explaining how change order disputes will be resolved, through mediation, arbitration, or court. This saves time and helps avoid escalations.

How to Handle Unauthorized Change Orders

If you’re a contractor who did extra work but the owner refuses to pay, or a property owner facing charges for unauthorized work, the solution often lies in the original contract.

Without a signed change order, courts in Florida are reluctant to enforce payment, unless you can prove that the extra work was authorized or necessary to prevent damage or delays.

That’s why we always advise contractors and owners alike to document everything and never assume verbal approvals will hold up in court.

Should You Use Standard Forms Like AIA Contracts?

AIA (American Institute of Architects) contract forms are commonly used in the industry and do include change order procedures. However, they may not be tailored to your specific project or needs.

We recommend having your AIA contract reviewed and customized by a construction attorney to ensure the change order provisions are clear, enforceable, and in line with Florida law.

Final Thoughts: A Well-Structured Contract Is Your Best Protection

If you’re involved in construction, whether as a contractor, subcontractor, or property owner, you already know how fast things can change on a job site. But without a clear, enforceable contract, every change becomes a potential legal risk.

At Ayala Law, we help clients across Florida draft and review construction contracts that are built to handle the realities of the job, and the disputes that sometimes come with it.

If you’re starting a new project, reviewing an agreement, or dealing with a change order dispute, contact an experienced attorney in Miami at 305-570-2208.

You can also contact trial attorney Eduardo A. Maura at eduardo@ayalalawpa.com.

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].