An HVAC contractor in Fishers with eighteen employees is three weeks into a rooftop unit replacement when the building owner’s facilities manager asks for two additional curbs and a longer duct run. The manager tells the crew to proceed and to bill for the difference. Nobody signs a construction change order, and the work goes forward because a lost crane day costs more than the added labor. Six weeks later the owner’s controller receives a payment application carrying twenty-two thousand dollars in extras and asks to see the signed authorization. Whether that amount is collectible depends almost entirely on what the parties put in writing while the work was underway.
Change order disputes are among the most common sources of construction litigation in central Indiana, and among the most preventable. Indiana applies different rules to private commercial work, residential work, and public projects, so a practice that protects a contractor on one type of job can leave him exposed on another.
Do change orders have to be in writing in Indiana?
On residential work, an Indiana consumer protection statute makes a modification unenforceable against the homeowner unless the homeowner signed it. On private commercial work the requirement comes from the contract rather than from a statute, and most commercial construction contracts call for signed written change orders. Indiana courts enforce those provisions.
Indiana law also recognizes that a written contract can be modified by a later agreement or by the conduct of the parties, even when the contract states that modifications must be in writing. Our Court of Appeals has applied that principle in a range of commercial settings and treats the question whether a modification occurred as one of fact rather than law. A judge or jury decides it by examining what the parties outwardly did, not what either side privately intended.
That principle helps contractors less than it first appears, because the party arguing the written requirement was waived carries the burden of proving it. In one case arising from a state bridge painting contract, the contractor blasted to a higher standard than the specifications required at a state supervisor’s direction and then sued for the additional cost. The contract required written notice of any claim for extra compensation before the work began, the contractor gave none, and the Court of Appeals concluded he was without recourse because he produced no evidence that the state had waived the requirement. A jury verdict in his favor was reversed.
A steel fabricator on a university project lost on similar reasoning. Its subcontract incorporated a prime contract requiring written notice of any claim for additional payment within twenty-one days. Revised drawings substantially increased the fabricator’s scope of work, written notice followed roughly eleven months later, and the claim failed as untimely. Our post on the common mistakes small contractors make covers the habits that produce these results.
When a schedule will not wait for signatures, a same-day written confirmation is better than silence, and it is not a substitute for the document the contract requires. Describe what was requested, who requested it, the price or the method of pricing, and the effect on the completion date, then ask for a written response. That record supports an argument that the parties modified the contract through their conduct. It does not satisfy a provision conditioning the claim on written notice delivered before the work starts, and contracts drafted with anti-waiver language are written to defeat this kind of showing.
Material purchases follow separate rules, because Indiana’s commercial code governs contracts for the sale of goods. Under that code, a signed agreement excluding modification except by a signed writing cannot be modified any other way, although an attempted modification can operate as a waiver of the term involved. Read purchase terms separately from the construction contract rather than assuming one analysis covers both.
What belongs in the document.
A usable change order is short and specific, and it answers the questions a judge would ask, which are the same questions the owner’s accounting department will ask ninety days later. Contractors who use a standard form spend less time on each one and produce a better record. Most of the weight sits in five items:
- The original contract, identified by date and project name, with a statement that all terms not changed remain in effect.
- A description of the added, deleted, or altered work detailed enough that someone who has not seen the site could price it.
- The price, or the pricing method for time and material work, with a not-to-exceed amount when the scope remains uncertain.
- The effect on the completion date, stated in calendar days, including zero days when that is the correct answer.
- Signatures, printed names, and dates from people authorized to bind each company.
Contractors omit the schedule line more often than any other, and the omission causes measurable damage. A contractor who adds four weeks of work without adjusting the completion date has agreed to finish a larger project by the original deadline, and liquidated damages can follow for delay the owner caused. Our discussion of handling delays in a central Indiana construction project explains how those claims develop.
Signature authority deserves attention in the base contract, negotiated while the relationship is still cooperative. Name the individuals who can approve changes for the owner and set a dollar threshold above which a higher approval is required. Superintendents, facilities managers, and project engineers give direction daily, and whether that direction binds the company is a question of agency law rather than job title.
Documentation practice matters as much as the form itself. On time and material work, a daily ticket showing labor hours, equipment, and materials, signed by the owner’s representative on site, is the record that decides the case later. Contractors who collect those tickets as the work proceeds tend to recover, and those who reconstruct the numbers at closeout tend not to.
Residential work follows a stricter statute.
Indiana’s home improvement statute governs agreements with a consumer to alter, repair, or modify residential property when the price exceeds one hundred fifty dollars. It requires the contractor to give the consumer a completed written contract before the consumer signs, and it lists the terms the contract must contain. Our Court of Appeals has read the statute to require a written agreement signed by both the contractor and the homeowner, and it holds contractors to a strict standard because the statute exists to protect consumers who know little about the industry.
Two consequences catch residential contractors off guard. A modification is not enforceable against the consumer unless the consumer signed it, so verbally approved extras on a residential job may not be collectible under the contract at all. Beyond that, a violation is treated as a deceptive act under Indiana’s consumer protection law, and the Court of Appeals has set aside damage awards in favor of contractors who violated the statute. In a 2024 decision, a well driller working under an oral agreement lost his small claims judgment in full because he had not furnished the homeowners a written contract.
The statute reaches further than many contractors assume. It applies to repair work paid for by a homeowner’s insurance carrier, which covers much of the roofing and restoration work performed in central Indiana. Soliciting a job before holding a required local contractor license, or failing to pull a permit the work requires, can itself amount to a deceptive act. In one case the Court of Appeals declared a roofing contract void on that basis, and the contractor lost the contractual right to attorney fees along with it.
Recovery is not foreclosed in every case. In that same matter the contractor recovered the reasonable value of the work under an unjust enrichment theory, along with prejudgment interest, because the homeowners had received the improvements without complaint about the workmanship. Other decisions have vacated the contractor’s award without reaching that alternative. A residential contractor whose paperwork is deficient should assume the contract claim and any fee provision are at risk, and that the fallback is a claim for value rather than contract price.
Public projects add another layer.
Contractors bidding city, county, township, or school work operate under a separate statute. A change order on a public work project becomes an addendum to the contract and must be approved and signed by the governing board and the contractor, and where a licensed architect or engineer is assigned to the project, that person prepares it.
Two limits in that statute surprise people. Change orders increasing the scope may not exceed twenty percent of the original contract amount in the aggregate, although a change resulting from circumstances that could not reasonably have been foreseen does not count as increasing the scope, and every change order must relate directly to the original project. A contractor who continues building on verbal direction from a public official can perform work the board has no authority to pay for.
When to involve counsel.
Waiting until the final payment application converts a manageable disagreement into litigation, because the leverage is gone by then and the deadlines have run. The cost of an early conversation is a fraction of the cost of the dispute it prevents. Several situations justify a call the week they arise:
- The owner directs work you believe falls outside the scope and declines to sign a change order for it.
- Your contract carries a written notice deadline for claims and the clock has started running.
- Unsigned extras have accumulated to an amount your company cannot absorb if the owner refuses to pay.
- An owner accepts the added work, occupies the building, and disputes the change orders at closeout.
- A residential customer disputes changes or raises consumer protection claims.
- Retainage is being withheld over a disputed change and your mechanic’s lien deadline is approaching.
The lien deadline runs from the last day labor or materials were furnished rather than from the date of the invoice, and no one can extend it. Contractors who track that date on every open job avoid the most common way a claim becomes uncollectible. Our article on enforcing a construction contract in Indianapolis describes the collection tools available once a dispute becomes concrete.
Frequently asked questions about construction change orders in Indiana.
Do change orders have to be in writing in Indiana?
On residential work, a modification is not enforceable against the homeowner unless the homeowner signed it. On private commercial work the requirement comes from the contract, and most commercial contracts call for signed written changes. Indiana courts enforce those provisions and also recognize modification by later agreement or conduct, so the answer turns on the contract language and the record.
What should a change order include?
A reference to the original contract, a specific description of the changed work, the price or pricing method, the effect on the completion date, and signatures from people authorized to bind each company. Include a line confirming that all other contract terms remain in effect, and where the scope is still moving, use time and material pricing with a not-to-exceed amount.
Can a contractor charge for extra work without a signed change order?
Sometimes, and the argument is harder than contractors expect. On private commercial work a contractor may contend that the parties modified the contract through their conduct, or may seek the reasonable value of the work under an unjust enrichment theory. On residential work the statute limits enforcement of unsigned modifications against the consumer. The party asserting waiver carries the burden, so the outcome turns on documents rather than recollection.
What happens if the owner verbally approved the change but will not pay?
Collect the records created while the work was happening, including emails, texts, daily reports, signed field tickets, photographs, and delivery documentation. Send a factual written summary of the direction you received and the amount you claim. Check the contract for a notice deadline, because Indiana courts have enforced those provisions to bar claims for extra work, then confirm where you stand on the lien calendar.
Can you file a mechanic’s lien for unpaid change order work?
Labor and materials that improved the property can support a lien claim whether or not a signed change order covered them, so the dispute usually shifts to the amount rather than the right to record. The deadlines run ninety days after last furnishing on most projects and sixty days on single and double family dwellings. Residential projects carry pre-lien notice requirements that operate as conditions precedent, and filing without meeting them creates exposure rather than leverage.
Who has to sign a change order?
Someone with authority to bind the company. The safer practice names the approving individuals in the base contract and sets a dollar limit above which a higher approval is required. Direction from a superintendent or facilities manager may or may not bind the owner, and agency principles rather than job titles govern that question.
What is the difference between a change order and a construction change directive?
A change order is an agreement signed by both sides with the price and time settled. A directive instructs the contractor to proceed before the price and time are agreed, so the project keeps moving. Where your contract includes a directive provision, follow the documentation and notice steps in it, because the cost record built during the work becomes the proof afterward.
Can a change order extend the project deadline?
Yes, when it says so. A change order that adds work and stays silent on schedule leaves the original completion date in place, which is how contractors face liquidated damages for delay the owner caused. State the time impact in calendar days on every change order, including when the answer is zero, and reserve any impact not yet known.
What if the contract says changes must be in writing but nobody followed that on the job?
That becomes a question of fact, and it stays genuinely uncertain until a court resolves it. Indiana courts examine what the parties did, and a consistent practice of paying for unsigned extras can support a waiver argument. Many contracts include anti-waiver language written to defeat it, and the party asserting waiver bears the burden. Neither side should plan a project around winning that fight.
Talk to a construction lawyer before the next change order.
Change orders are inexpensive to get right and costly to fix after the fact. Fugate Gangstad Lowe LLC represents contractors, subcontractors, suppliers, and owners throughout central Indiana, handling construction contract drafting, change order disputes, mechanic’s liens, and construction litigation in Marion, Hamilton, Boone, Hendricks, and surrounding counties. Whether you want your contract forms reviewed before the next project begins or you are already arguing over extras, we will tell you where you stand and what the available options are likely to cost. Call our Indiana construction lawyers at 317-829-6797 or reach us through our contact form.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. For legal advice tailored to your situation, please contact our firm directly by calling 317-829-6797 or by filling out our contact form.