When the specifications permit "or equal" substitutions, the contractor is entitled to make a substitution of materials or equipment which is equivalent or equal to the equipment or materials specified in the contract. If the design professional rejects the contractor's substitution of materials or equipment which are less expensive but equal and directs the contractor to install more expensive equipment, then a constructive change has occurred and the contractor is entitled to recover the cost difference between the less expensive product and the product which he was directed to install plus a reasonable profit.

The largest contractor in the world, the United States Government, has long adhered to "or equal" clauses; and the administrative boards which rule on federal contract disputes have consistently held that the refusal to approve an "equal" substitution constitutes a constructive change in the contract specifications and entitles the contractor to an equitable adjustment in the contract to cover the increased costs of procuring the more expensive product. The courts interpret an "or equal" clause in a construction contract as creating a valuable contract right for the contractor.