Change orders on public agency jobs present special problems. There, change requests and contracts must scrupulously adhere to regulatory requirements that vary among states, cities, and other public agencies. See Los Angeles Dredging Co. v. Long Beach (1930) 210 Cal. 348, 353. Contracts wholly beyond the powers of a municipality are void even if fully performed. In First Street Plaza Partners v. City of Los Angeles (1998) 65 Cal.App.4th 650, the court upheld a summary judgment because "the signature of the mayor was lacking." Id. at 667.

The manner of approving changes in public agency projects varies among the different types of public agencies. California state agency contracts are governed by the Public Contract Code, particularly sections 10250 et seq. for modifications. Changes in construction contracts of local agencies, such as counties, are governed by Public Contract Code §§ 20136 et seq. Other public agencies such as cities, irrigation districts, water districts, unincorporated associations, and the United States each have their own unique requirements for any binding change orders and contracts.

Even a completed fully performed and paid for contract can result in a viable lawsuit to make the contractor pay back the entire amount received if the public agency contract was entered into in a manner not authorized by law. Miller v. McKinnon (1942) 20 Cal. 2d 83.

Changes from unforeseen conditions present special problems. See T. Kelly & Sons, Inc. v. Los Angeles (1935) 6 Cal.App.2d 539. The court held that the city was not responsible for the extra expense caused by an unforeseen below water rock shelf.

By far the most common change request comes on the fly when the parts don't fit, the drawings are unclear, the unexpected surfaces, workers or parts don't show up on time. Such problems can be solved seamlessly if everyone cooperates and no one is adversely impacted in time, labor costs, and/or materials required. However, such informal changes are loaded with ambiguities that spawn controversy and great expense to resolve if disputed, because "[w]hether a writing has been modified by an executed oral agreement is a question of fact." Keeble v. Brown (1954) 123 Cal.App.2d 126, 132. "Question of fact" under law means there is no easy answer and the dispute can't be resolved without an expensive and time consuming trial to an arbitrator, judge or jury. The results are both unpredictable and can cause large swings in the economic consequences. Nuttman v. Chais (1950) 101 Cal.App.2d 476 is an example of large cost overruns being enforced on purely oral modification.