Ontario PHBI Financial Planning & Management Practice Test

Change orders are formal documents that modify the original construction contract. They become part of the contract once both parties, the client and the contractor, have signed them. This process ensures that all changes, whether they pertain to the scope of work, costs, or timelines, are acknowledged and agreed upon, thereby protecting the interests of both parties.

When a change order is signed, it indicates that both the client and the contractor have come to a mutual agreement regarding the alterations needed for the project. This documentation is crucial in construction management as it helps avoid disputes over scope and costs later in the project.

Understanding the nature of change orders also highlights that they cannot simply be dictated by one party; both parties must consent to the terms for the change to be integrated into the contract. This cooperative agreement upholds the integrity of the contractual relationship throughout the project's lifespan.