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An equitable adjustment refers to a compensation or price adjustment made to the contract in response to changes in the scope of work, unforeseen circumstances, or other factors that affect the contract's execution. This adjustment is designed to ensure that both parties receive a fair outcome based on the conditions that have altered since the original agreement.

In contexts where project scopes evolve due to factors beyond a contractor's control—such as unexpected site conditions or changes in government regulations—an equitable adjustment allows for the rectification of any financial imbalance that may result from these changes. This process is crucial in maintaining fairness and upholding the contractual obligations agreed to by the parties involved.

Understanding equitable adjustments is essential for professionals in contract management and construction, as it directly impacts the financial and operational aspects of project delivery. It ensures that projects can adapt to reality while providing a mechanism for fair compensation.