Change Order

Posted in Operations and Supply Chain Terms, Total Reads: 445

Definition: Change Order

It is a bilateral agreement between parties to the contract to change the contract. As the name implies, it’s a change in the scope of the project which impacts the requirements of the contract, cost and completion date. It is also known as modification order.

It is on mutual consensus of both the parties to change the work, schedule or some other things and so is the best way to make changes without any harm to the rapport/relationship with the clients.

It is signed at the end as an acceptance/confirmation by both the parties.


If a sub contractor tells the contractor that they want to increase the price by 5%, contractor will agree to this as he doesn’t want to lose out on money (look for a new sub contractor) as well as time. But, eventually there is no change in the type of work, be it additional work or different material or less time.

So, there should be mutual consent between both the parties.


Hence, this concludes the definition of Change Order along with its overview.


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