How to write a change order

Before you write: read your contract’s change clause

Most contracts already say how changes work — who may order them, how they are priced, the markup allowed and how fast you must give written notice of a change or a claim. A change order that ignores those rules is easy to reject. Thirty seconds with the clause tells you the markup to use and the deadline you are working to.

The 8 steps

1. Number it and tie it to the contract. Give every change order a sequential number (CO-001, CO-002…) and name the project, the job address and the date of the original contract. The number is how both sides refer to it later, on invoices and in disputes.
2. Say who asked for the change and why. Owner request, architect’s instruction, hidden site condition, code inspector, design error. The reason decides who pays: an owner’s upgrade is billable, a mistake in your own work usually is not.
3. Describe the work so a stranger could price it. Location, quantity, material, what is added and what is removed. “Extra electrical” cannot be priced or checked; “add one 20A GFCI outlet on the east face of the kitchen island, new home run from the panel” can.
4. Price it line by line. Labor hours × rate for each trade, materials, equipment, subcontractor quotes — then overhead and profit as a stated percentage. Use the markup your contract allows; if it says nothing, state yours on the form.
5. Show the contract sum before and after. Original contract sum, total of previous change orders, this change order, new contract sum. A running total stops the “how much is this job now?” argument at the final invoice.
6. State the schedule impact. Number of working days added (or “no change”) and the new completion date. Leaving it blank invites a later claim for delay, against you.
7. Say when it gets paid. With the next progress invoice, on completion of the change, or a deposit before ordering materials.
8. Sign it before the work starts. Contractor and owner (or GC, if you are a subcontractor) sign and date it. Work done on a verbal go-ahead is the most common reason extras go unpaid.

Worked example

A kitchen remodel. At the walkthrough the owners move a counter appliance and ask for an outlet on the island. The contractor writes it up before leaving the site.

Change order no.

CO-003 — Hillcrest Kitchen Remodel, contract of Sep 2, 2026

Requested by

Owner, on site walkthrough

Description

Add one 20A GFCI outlet on the east face of the kitchen island: new home run from panel, box, device and cover plate. Includes patching drywall at island base.

Reason

Owner request — counter appliance location moved.

Contract sum

$38,400.00 original + $1,215.00 previous change orders + $481.16 this change order = $40,096.16

Schedule

+1 working day; new completion date Nov 7, 2026

Payment

With the next progress invoice. Work starts after both parties sign.

See it on the form: filled-in change order example (PDF).

Descriptions that get signed — and ones that start arguments

Three ways to price a change

• Lump sum — one agreed price for the described work. Best when the scope is clear, as in the example above.
• Unit price — a rate per unit (per sq ft, per linear ft, per fixture) when the quantity is not known yet; the change order states the rate and an estimated quantity.
• Time and materials — when the price cannot be known before the work (hidden damage, emergency work). Record labor hours and materials on a T&M ticket signed each day, then roll the tickets into a change order with the final amount.

If the owner won’t sign before the work has to happen

Sometimes the work cannot wait — the wall is open, the inspector is coming. Get the instruction to proceed in writing (a signed note or a reply email is better than nothing), track the cost on signed daily T&M tickets, and write the change order as soon as the cost is known. Standard contract forms such as the AIA general conditions provide a document for this situation, the construction change directive: the owner orders the work now and the price is settled later.

California home improvement contracts: the rule is in the statute

For home improvement contracts in California, the change order requirements are written into the Business and Professions Code:

“A change-order form for changes or extra work shall be incorporated into the contract and shall become part of the contract only if it is in writing and signed by the parties prior to the commencement of any work covered by a change order.”

“(1) The scope of work encompassed by the order. (2) The amount to be added or subtracted from the contract. (3) The effect the order will make in the progress payments or the completion date.”

Section 7159.6(c) adds that missing these requirements does not by itself stop a contractor from recovering payment for work done under remedies against unjust enrichment — but it turns a signed price into a lawsuit. Other states have their own home improvement rules; check yours.

Statute text checked on October 22, 2026. This page is general information, not legal advice.

Mistakes that cost contractors money

• Starting on a verbal “go ahead” and writing the change order afterwards — or never.
• A description nobody can check, so the owner disputes what was done.
• No running contract sum, so the final invoice surprises the owner.
• Leaving the schedule field blank, then being blamed for a late finish.
• Markup hidden in line items instead of stated — it looks like padding when found.
• Several changes on one form with one total, so one disputed item blocks payment for all of them.