Change Order Template — California

CHANGE ORDER — CALIFORNIA

Change Order No.: [____]
Date Issued: [__/__/____]
Project Name: [________________________________]
Project Number / Reference: [________________________________]
Project Location: [________________________________], California [____]

ARTICLE 1 — PARTIES AND MASTER AGREEMENT REFERENCE

1.1 Parties.

Owner / Client ("Owner"):
Name: [________________________________]
CSLB License No. (if applicable): [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________], CA [____]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Contractor ("Contractor"):
Name: [________________________________]
CSLB License No.: [________________________________]
DIR Registration No. (if public works): [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________], CA [____]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

1.2 Master Agreement Reference.

1.3 Project Type. Check one:

☐ Private Commercial Construction
☐ Private Residential Construction (four stories or fewer — note: SB 440 may not apply)
☐ Private Mixed-Use Construction
☐ Public Works (state or local agency)
☐ Professional Services / Technology
☐ Other: [________________________________]

1.4 Incorporation. This Change Order is incorporated into and forms part of the Master Agreement. Capitalized terms not defined herein have the meanings set forth in the Master Agreement.

ARTICLE 2 — DEFINITIONS

2.1 "Change Order Effective Date" means the date on which the last authorized signatory executes this Change Order, unless a different date is specified in Article 11.

2.2 "Claim" has the meaning set forth in California Civil Code § 8830(a) (for contracts entered into on or after January 1, 2026): a separate written demand by a contractor, sent by registered or certified mail with return receipt requested, seeking a time extension, payment for work performed, or payment of a disputed amount.

2.3 "Contract Price" means the total compensation payable under the Master Agreement as adjusted by all prior Change Orders.

2.4 "Contract Time" means the period allowed for completion of the Work as adjusted by all prior Change Orders.

2.5 "Force Majeure Event" means any event beyond the reasonable control of the affected Party, including acts of God, fire, flood, earthquake, mudslide, wildfire, epidemic, pandemic, war, government action, labor disputes, or supply chain disruptions not reasonably foreseeable at the time of the Master Agreement.

2.6 "Retention" or "Retainage" means the percentage of each progress payment withheld by Owner pending final completion, subject to California Civil Code § 8814 (5% cap for contracts entered into on or after January 1, 2026).

2.7 "Work" means all labor, materials, equipment, services, and deliverables required under the Master Agreement as modified by this Change Order.

ARTICLE 3 — DESCRIPTION OF CHANGE

3.1 Summary of Change.

[________________________________]
[________________________________]
[________________________________]

3.2 Detailed Scope of Change.

Work Added:
| Item | Description | Specifications / Standards |
|------|-------------|---------------------------|
| 1 | [________________________________] | [________________________________] |
| 2 | [________________________________] | [________________________________] |
| 3 | [________________________________] | [________________________________] |

Work Deleted:
| Item | Description | Credit Amount |
|------|-------------|---------------|
| 1 | [________________________________] | $[________] |
| 2 | [________________________________] | $[________] |

Work Modified:
| Item | Original Requirement | Revised Requirement |
|------|---------------------|---------------------|
| 1 | [________________________________] | [________________________________] |
| 2 | [________________________________] | [________________________________] |

3.3 Deliverables Affected.

3.4 Specifications and Standards. Unless modified by this Change Order, all Work shall be performed in accordance with the specifications, applicable building codes (California Building Code, Title 24), and standards set forth in the Master Agreement.

ARTICLE 4 — REASON FOR CHANGE

4.1 Category. Check all that apply:

☐ Owner / Client-Directed Scope Change
☐ Design Error or Omission
☐ Differing Site Conditions
☐ Regulatory or Code Compliance Requirement (Title 24, ADA, local)
☐ Force Majeure Event (specify): [________________________________]
☐ Value Engineering / Cost Savings Proposal
☐ Schedule Acceleration Request
☐ Unforeseen Conditions (specify): [________________________________]
☐ Material Substitution (specify): [________________________________]
☐ Seismic or Structural Upgrade Requirement
☐ Environmental Compliance (CEQA, hazardous materials)
☐ Cal/OSHA Safety Requirement
☐ Price Escalation (if permitted under Master Agreement)
☐ Other (specify): [________________________________]

4.2 Detailed Justification.

[________________________________]
[________________________________]
[________________________________]

4.3 Supporting Documentation.

☐ Revised drawings or plans (Exhibit A)
☐ Revised specifications
☐ Cost estimate / quotation
☐ Vendor or subcontractor proposals
☐ Photographs or site documentation
☐ Regulatory or code references
☐ Architect's / Engineer's recommendation
☐ Geotechnical or environmental reports
☐ Other: [________________________________]

ARTICLE 5 — IMPACT ASSESSMENT

5.1 Schedule Impact.

5.2 Cost Impact Summary.

5.3 Resource Impact.

5.4 Risk Impact.

ARTICLE 6 — COST ADJUSTMENT

6.1 Pricing Method. Check one:

☐ Lump Sum / Fixed Price
☐ Unit Price
☐ Time and Materials (T&M)
☐ Cost Plus Fixed Fee
☐ Cost Plus Percentage
☐ Combination (describe): [________________________________]

6.2 Itemized Cost Breakdown.

6.3 Markup and Overhead.

6.4 Total Cost Adjustment.

ARTICLE 7 — SCHEDULE ADJUSTMENT

7.1 Current and Revised Milestones.

7.2 Critical Path Impact. This Change Order ☐ does / ☐ does not affect the critical path. If yes, affected activities: [________________________________].

7.3 Revised Completion Dates.

7.4 Liquidated Damages. Liquidated damages provisions in the Master Agreement shall apply based on the revised completion dates, unless modified herein.

ARTICLE 8 — PAYMENT TERMS

8.1 Payment Schedule.

☐ Progress payments per Master Agreement schedule
☐ Lump sum upon completion of CO Work
☐ Milestone-based per the following:

☐ Time and materials, invoiced: ☐ weekly / ☐ bi-weekly / ☐ monthly
☐ Other: [________________________________]

8.2 Retainage (SB 61 — Effective January 1, 2026).

For contracts entered into on or after January 1, 2026, retention on this Change Order Work shall not exceed 5% of each progress payment, consistent with California Civil Code § 8814. Total retainage withheld under the Master Agreement shall not exceed 5% of the total contract price. The retainage percentage withheld from a subcontractor shall not exceed the percentage in the direct contractor's contract with the Owner.

Current retainage rate: [____]% (not to exceed 5% for qualifying contracts)

8.3 Prompt Payment — Private Works (SB 440 — Effective January 1, 2026).

For private works contracts entered into on or after January 1, 2026 (excluding residential projects of four stories or fewer that are not mixed-use), the following apply per the Private Works Change Order Fair Payment Act (Cal. Civ. Code § 8830 et seq.):

(a) Claim Submission. Contractor claims related to this Change Order must be submitted by registered or certified mail with return receipt requested.

(b) Owner Response. Owner shall conduct a reasonable review and provide a written statement within 30 days of receipt of a claim, identifying disputed and undisputed portions and supporting documentation for any disputed amount.

(c) Payment of Undisputed Amounts. Owner shall pay undisputed amounts within 60 days after issuing the written statement.

(d) Interest on Late Payments. Unpaid undisputed amounts accrue interest at 2% per month (24% per annum).

(e) Stop-Work Rights. If Owner fails to comply with these timelines, Contractor may issue a stop-work notice. Contractor may suspend work 40 days after issuance of the stop-work notice without penalty.

(f) Mediation. Disputed claims are subject to nonbinding mediation. Owner's failure to engage in mediation may trigger stop-work rights.

(g) Non-Waivable. These rights cannot be waived by contract. Any provision purporting to waive or modify these procedures in a manner that interferes with SB 440 timelines is unenforceable.

8.4 Prompt Payment — Public Works.

For public works projects, payment terms are governed by the California Public Contract Code. Prime contractors shall receive progress payments within 30 days of submittal. Subcontractors shall receive payment within 10 days of the prime contractor's receipt of payment. Interest on late payments accrues at 10% per annum (Cal. Pub. Contract Code § 7107).

8.5 Disputed Amounts. If Owner disputes any portion of an invoice, Owner shall: (a) pay the undisputed portion within the applicable time period; (b) provide written notice with specific reasons for the dispute; and (c) work in good faith to resolve the dispute through the procedures described in this Article.

ARTICLE 9 — EFFECT ON MASTER AGREEMENT

9.1 Provisions Modified.

9.2 Provisions Unchanged. Except as expressly modified, all terms and conditions of the Master Agreement remain in full force and effect, including provisions governing intellectual property, confidentiality, indemnification, limitation of liability, insurance, and dispute resolution.

9.3 Order of Precedence. In the event of conflict:

1. This Change Order No. [____]
2. Prior Change Orders (reverse chronological order)
3. The Master Agreement (including exhibits and schedules)
4. The original Statement of Work / Scope of Work

9.4 Cumulative Effect.

ARTICLE 10 — REPRESENTATIONS AND WARRANTIES

10.1 Contractor Representations. Contractor represents and warrants that:

(a) The pricing is complete and includes all costs necessary to perform the Change Order Work.

(b) Contractor holds a current and valid California Contractors State License Board (CSLB) license for the classification(s) required for the Change Order Work.

(c) Contractor is registered with the California Department of Industrial Relations (DIR) if the project is a public work or requires prevailing wages.

(d) The Change Order Work will comply with applicable California Building Code (Title 24), Cal/OSHA requirements, and all other applicable laws and regulations.

(e) Contractor has disclosed all known conditions that may affect cost or schedule.

(f) This Change Order represents the full adjustment for the changes described herein.

10.2 Owner Representations. Owner represents and warrants that:

(a) The signatory has authority to bind Owner.

(b) Owner has approved the budget necessary to fund this Change Order.

(c) Owner will provide timely access, information, and approvals.

ARTICLE 11 — AUTHORIZATION AND APPROVAL

11.1 Approval Authority.

11.2 Multi-Party Approval.

11.3 Effective Date. This Change Order is effective as of [__/__/____].

ARTICLE 12 — CALIFORNIA-SPECIFIC PROVISIONS

12.1 Contract Modification Under California Law. Pursuant to California Civil Code § 1698, a contract in writing may be modified by a contract in writing, by an executed oral agreement, or by an oral agreement as to which there has been reasonable reliance. However, where the Master Agreement contains a written modification clause, modifications must comply with such clause. This Change Order satisfies the written modification requirement.

12.2 Mechanic's Lien Implications. Contractor acknowledges that Change Order Work constitutes a "work of improvement" under California Civil Code § 8050 et seq. Change Order Work is subject to the same preliminary notice, mechanic's lien, and stop-payment notice rights as the original Work. Contractor and subcontractors must serve preliminary notices within 20 days of first furnishing labor or materials for the Change Order Work if not already covered by an existing preliminary notice.

12.3 Prevailing Wages (Public Works). If the project is a public work under California Labor Code § 1720, all Change Order Work must be performed at not less than the prevailing rates of wages as determined by the Director of Industrial Relations. Contractor shall comply with all prevailing wage, apprenticeship, and certified payroll requirements.

12.4 Contractor License Requirement. All Change Order Work requiring a license under the Contractors State License Board Act (Cal. Bus. & Prof. Code § 7000 et seq.) must be performed by appropriately licensed contractors. A contract with an unlicensed contractor performing work requiring a license is void, and the unlicensed contractor may not recover compensation. (Cal. Bus. & Prof. Code § 7031.)

12.5 Home Improvement Contracts. If the Master Agreement is a home improvement contract (Cal. Bus. & Prof. Code § 7159), this Change Order must comply with additional consumer protection requirements, including providing the owner with a Notice of Right to Cancel for door-to-door or emergency solicitation transactions.

12.6 Indemnity Limitations. Indemnity provisions in construction contracts are subject to California Civil Code § 2782, which voids provisions requiring a subcontractor to indemnify the general contractor or owner for the general contractor's or owner's active negligence or willful misconduct (Type I indemnity clauses are void for construction contracts).

12.7 Interest Rate on Late Payments. Unless a specific rate is stated in the Master Agreement or mandated by SB 440 (2% per month for qualifying private works), the default prejudgment interest rate in California is 10% per annum for breach of contract (Cal. Civ. Code § 3289) or 7% per annum on amounts due under a contract silent on interest (Cal. Const. Art. XV, § 1).

ARTICLE 13 — GOVERNING LAW AND DISPUTE RESOLUTION

13.1 Governing Law. This Change Order is governed by the laws of the State of California without regard to conflict-of-law principles.

13.2 Venue. Any litigation arising from this Change Order shall be brought exclusively in the state or federal courts located in [________________________________] County, California.

13.3 Dispute Resolution. Disputes arising from this Change Order shall be resolved pursuant to the dispute resolution provisions of the Master Agreement. For private works contracts subject to SB 440, the nonbinding mediation procedures of California Civil Code § 8830 et seq. apply to claims related to Change Order payments.

ARTICLE 14 — EXECUTION

By executing this Change Order, each Party acknowledges that it has read, understands, and agrees to be bound by all terms and conditions herein.

OWNER / CLIENT:

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONTRACTOR:

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
CSLB License No.: [________________________________]
Date: [__/__/____]

ARCHITECT / ENGINEER (if applicable):

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
License No.: [________________________________]
Date: [__/__/____]

EXHIBIT A — COST BREAKDOWN WORKSHEET

EXHIBIT B — REVISED SCHEDULE

☐ Revised Gantt Chart / CPM Schedule attached as Exhibit B-1

EXHIBIT C — SCOPE CHANGE DETAILS

Narrative Description:

[________________________________]
[________________________________]
[________________________________]

Revised Drawings:

Revised Specifications:

This template is provided for informational purposes only and does not constitute legal advice. California law regarding construction change orders, prompt payment, retention, and contractor licensing is complex and subject to change. Have this document reviewed by a California-licensed attorney before use.