Utah Contractor Practice Exam

If a contractor wishes to increase the contract price, what must occur?

1. The contractor should get a loan from the bank

2. The contractor may request assistance from the subcontractor

3. The contractor and the owner must agree to a written and signed change order

4. The contractor should inform the building inspector to revise the specifications

The correct answer is: The contractor and the owner must agree to a written and signed change order

For a contractor to increase the contract price, it is essential that the contractor and the owner reach mutual agreement, typically formalized through a written and signed change order. Change orders document any modifications to the original contract, such as scope changes, additional work, or unforeseen circumstances that might justify a price adjustment. This process ensures that both parties are aligned on the modifications being made and the associated costs. When a change order is executed, it not only specifies the new price but also details the reasons for the increase, which acts as a protection for both the contractor and the owner. Having a formalized approach helps maintain clear communication and provides legal backing, in the event of disputes regarding the additional charges. It is a crucial aspect of contract management within the construction industry to ensure transparency and adherence to the agreed terms.