Arizona Contractors License Practice Exam

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What is a written agreement between the owner and contractor to change the terms of the contract called?

A modification
A change of order
A supplemental contract
A forbearance agreement

The correct answer is: A change of order

A written agreement between the owner and contractor to change the terms of the contract is referred to as a change order. This document outlines specific adjustments to the original contract terms, which may include modifications in project scope, cost, or schedule. Change orders are essential in construction contracts as they help formalize the acceptance of changes that occur during the project. This means that when unforeseen circumstances arise, leading to additional work or alterations in the plan, a change order allows both parties to agree on these adjustments in writing, thus protecting their rights and clarifying responsibilities moving forward. Providing clear documentation through a change order helps prevent disputes related to changes throughout the life of the project, making it a crucial component in construction management.