Change Order Template — Texas

CHANGE ORDER — TEXAS

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

ARTICLE 1 — PARTIES AND MASTER AGREEMENT REFERENCE

1.1 Parties.

Owner / Client ("Owner"):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________], TX [____]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Contractor ("Contractor"):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________], TX [____]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Note: Texas does not require a general contractor's license at the state level, but certain trades (plumbing, electrical, HVAC) require state licensing. Municipalities may impose additional licensing requirements.

1.2 Master Agreement Reference.

1.3 Project Type. Check one:

☐ Private Commercial Construction
☐ Private Residential Construction
☐ Public Works — State Agency
☐ Public Works — Municipal / County / Local Government
☐ Professional Services / Technology
☐ Other: [________________________________]

1.4 Incorporation. This Change Order is incorporated into the Master Agreement. Capitalized terms not defined herein have the meanings 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 otherwise specified in Article 11.

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

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

2.4 "Force Majeure Event" means any event beyond the reasonable control of the affected Party, including acts of God, fire, flood, tornado, hurricane, epidemic, pandemic, war, government action, or supply chain disruptions not reasonably foreseeable.

2.5 "Original Contract Amount" means the Contract Price stated in the Master Agreement or subcontract prior to any Change Orders.

2.6 "Proper Invoice" means an invoice meeting the requirements of the Master Agreement and Tex. Prop. Code § 28.004.

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. All Work shall comply with applicable building codes (International Building Code as adopted in Texas), local municipal codes, and the Master Agreement specifications unless modified herein.

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
☐ Force Majeure Event — Tornado / Severe Weather (specify): [________________________________]
☐ Force Majeure Event — Other (specify): [________________________________]
☐ Value Engineering / Cost Savings Proposal
☐ Schedule Acceleration Request
☐ Unforeseen Conditions (specify): [________________________________]
☐ Material Substitution (specify): [________________________________]
☐ Environmental Compliance (TCEQ requirements)
☐ 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
☐ 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.

6.5 10% Threshold Notice (Tex. Prop. Code § 28.002).

For contracts entered into on or after September 1, 2023: If the aggregate value of all unexecuted change orders for owner-directed additional work exceeds 10% of Contractor's (or subcontractor's) Original Contract Amount, Contractor (or subcontractor) has the statutory right to refuse to perform the additional work without liability for damages. The current aggregate unexecuted change order value is: $[________], which represents [____]% of the Original Contract Amount.

☐ Aggregate unexecuted change orders are BELOW 10% of Original Contract Amount
☐ Aggregate unexecuted change orders EXCEED 10% of Original Contract Amount — Contractor ☐ elects to proceed / ☐ declines to proceed with the additional work

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: [________________________________].

7.3 Revised Completion Dates.

7.4 Liquidated Damages. Liquidated damages provisions apply based on 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. Retainage on Change Order Work: [____]% of each progress payment. Texas does not impose a statutory cap on retainage for private projects; retainage is governed by the Master Agreement. Retainage release: [________________________________].

8.3 Prompt Payment — Private Works (Tex. Prop. Code Ch. 28).

Texas prompt payment requirements for private projects cannot be modified by contract:

(a) Owner to Prime Contractor. Owner shall pay Contractor within 35 days of receipt of a proper invoice.

(b) Prime to Subcontractor. Contractor shall pay subcontractors within 7 days of receipt of payment from Owner.

(c) Subcontractor to Sub-Subcontractor. First-tier subcontractors shall pay second-tier subcontractors within 7 days of receipt of payment.

(d) Interest on Late Payments. Unpaid amounts accrue interest beginning the day after payment is due at 1.5% per month (1% plus the prime rate as published in the Wall Street Journal on the first business day of each month).

(e) Disputed Amounts. The party withholding payment may withhold no more than 100% of the difference (non-residential) or 110% of the difference (residential) for work performed in a manner not conforming to the contract.

8.4 Prompt Payment — Government Contracts (Tex. Gov't Code Ch. 2251).

(a) Payment Deadline. A governmental entity shall pay Contractor within 30 days of the later of: (i) the date the entity receives the goods or services; or (ii) the date the entity receives an invoice.

(b) Interest. Overdue payments accrue interest at the rate of 1% per month beginning on the 31st day after receipt.

(c) Subcontractor Payments. Contractor shall pay subcontractors within 10 days of receipt of payment from the governmental entity.

8.5 Disputed Amounts. If Owner disputes any portion of an invoice: (a) pay undisputed amounts per the statutory timeline; (b) provide written notice with specific reasons; and (c) resolve in good faith. The statutory prompt payment timelines may not be waived.

ARTICLE 9 — EFFECT ON MASTER AGREEMENT

9.1 Provisions Modified.

9.2 Provisions Unchanged. All terms not expressly modified remain in full force and effect.

9.3 Order of Precedence.

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

9.4 Cumulative Effect.

ARTICLE 10 — REPRESENTATIONS AND WARRANTIES

10.1 Contractor Representations. Contractor represents and warrants that:

(a) Pricing is complete and includes all costs for the Change Order Work.

(b) Contractor holds all trade licenses required by Texas law (plumbing, electrical, HVAC as applicable) and any required municipal licenses.

(c) Change Order Work will comply with all applicable building codes and laws.

(d) Contractor has disclosed all known conditions affecting cost or schedule.

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

10.2 Owner Representations. Owner represents that:

(a) The signatory has authority to bind Owner.

(b) Owner has approved the necessary budget.

(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 — TEXAS-SPECIFIC PROVISIONS

12.1 Statute of Frauds (Tex. Bus. & Com. Code § 26.01). Under Texas law, agreements that are not to be performed within one year must be in writing and signed by the person to be charged. This Change Order satisfies the writing requirement for modifications extending the performance period beyond one year.

12.2 Right to Refuse Additional Work (Tex. Prop. Code § 28.002). Effective September 1, 2023, general contractors and subcontractors on both public and private projects have the statutory right to refuse to perform owner-directed additional work if: (1) the contractor does not have a written and fully executed change order for the additional work; and (2) the aggregate value of all unexecuted change orders exceeds 10% of the contractor's original contract amount. A contractor exercising this right is not liable for damages associated with the refusal. This provision cannot be waived by contract.

12.3 Mechanic's Lien Implications. Change Order Work is subject to Texas mechanic's, contractor's, or materialman's lien rights under Tex. Prop. Code Ch. 53. For non-homestead property, subcontractors and suppliers must send notice to the Owner and prime contractor no later than the 15th day of the second month following the month in which the labor or materials were provided. For residential homestead property, additional notice and contract requirements apply under Tex. Prop. Code Ch. 53.

12.4 Payment Bond — Public Works. For public projects, Change Order Work is within the coverage of the payment bond required by Tex. Gov't Code § 2253.021. Subcontractors and suppliers must provide notice to the prime contractor to preserve bond claims.

12.5 Non-Waivable Prompt Payment. The prompt payment timelines set forth in Tex. Prop. Code Ch. 28 (private works) and Tex. Gov't Code Ch. 2251 (government contracts) are mandatory and cannot be modified by contract. Any contractual provision purporting to extend these deadlines is void and unenforceable.

12.6 Interest Rate. For private construction, the interest rate on late payments is 1.5% per month (Tex. Prop. Code § 28.004). For government contracts, the rate is 1% per month (Tex. Gov't Code § 2251.025). The general prejudgment interest rate in Texas is 5% per annum for judgments (Tex. Fin. Code § 304.003).

12.7 Indemnity Limitations. Under Texas law, indemnity provisions in construction contracts that require a party to indemnify against the indemnitee's own negligence are void if the contract relates to the construction or repair of a building or structure (Tex. Ins. Code § 151.102, also known as the Texas Anti-Indemnity Statute).

ARTICLE 13 — GOVERNING LAW AND DISPUTE RESOLUTION

13.1 Governing Law. This Change Order is governed by the laws of the State of Texas.

13.2 Venue. Exclusive venue for any dispute shall be the state or federal courts located in [________________________________] County, Texas.

13.3 Dispute Resolution. Disputes shall be resolved per the Master Agreement.

ARTICLE 14 — EXECUTION

OWNER / CLIENT:

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

CONTRACTOR:

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

ARCHITECT / ENGINEER (if applicable):

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
TX 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. Texas law regarding construction change orders, prompt payment, mechanic's liens, and the right to refuse additional work is complex and subject to change. Have this document reviewed by a Texas-licensed attorney before use.