Utah Contractor Practice Exam

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Why does a contractor keep change orders on file?

  1. For tax purposes

  2. To get paid when the job is over

  3. By law

  4. UBC requirement

The correct answer is: By law

Keeping change orders on file is essential for legal compliance within the construction industry. Change orders document any modifications to the original contract, including changes in scope, timeline, and costs. By maintaining these records, contractors ensure they have proper documentation to support any claims or disputes that may arise regarding the project's execution. Legally, it can protect both the contractor and the client by providing a clear agreement on the changes made and helping to avoid potential misunderstandings that could lead to litigation or disputes. While there are other valid reasons for retaining change orders—such as financial reasons and contractual obligations—they are primarily kept for legal purposes to ensure that there is a formal record of any agreed-upon changes.

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