2025 South Carolina NASCLA Business Law and Management Complete Practice Exam

A Change Order is fundamentally a formal modification to the existing contract terms, used to document changes in the scope of work or contract price due to various reasons, such as design changes, unforeseen conditions, or errors in the original contract. It serves as written confirmation of these changes and ensures that all parties understand and agree on the adjustments being made.

This documentation is critical because it helps maintain clear communication between all parties involved—owners, contractors, and subcontractors—thus preventing disputes that may arise from verbal agreements or misunderstandings. By providing a clear record of what changes have been made and their implications on the contract, Change Orders play an essential role in project management and contract administration.

The other options do serve specific functions in project management, but they do not encapsulate the main role of a Change Order in the context of construction contracts. For instance, an amendment to the project schedule pertains more to the timeline of tasks rather than changes to the contract specifics. A report on project progress focuses on current status rather than any contractual modifications. Lastly, a cost estimate for additional work provides an early financial forecast but does not confirm or establish the official change in the contract, which is the primary function of a Change Order.