
Variations to contracts often arise in the construction world, but the nuances surrounding such variations are seldom fully understood. Find out what you need to know.
What is a variation?
Basically, a variation is either a change in what is agreed to be done or a variation to the terms of the contract in some way (except for minor things such as names of the parties). These two senses of the word “variation” often go hand in hand. A variation is a ‘not a variation’ if the change made was or is in fact included within the original scope of the works themselves. This is the area which often generates the most disputes.
A fundamental principle here is that one party to a construction contract cannot force on the other party a change to their mutually agreed contract. This is called a “unilateral variation.”
A builder, for example, cannot provide an extra item in the works, or cannot supply an item at a higher cost to the owner and then simply charge the extra cost to the owner without the owner’s prior agreement. An exception to that could be where the extra item is indispensably necessary to the works which are in fact agreed. By way of example, say the builder fits smoke detectors to a residence but the charges relating to this are not specifically included in or referred to in the agreed contract. In such a case, as such ‘safety devices’ are in fact a legal and safety requirement, a valid variation could be held to have occurred by their later inclusion.
Most of the standard form building contracts in the industry define the scope of ‘agreed’ or valid variations very broadly. Nevertheless, disputes can still occur. The uppermost aim is surely to avoid disputes wherever possible.
Who can request a variation?
If the builder is at fault, for example where extra rock is discovered whilst preparing the site and or commencing the build, and the builder knew about or should have discovered the situation prior to commencement, then the law would not permit the extra cost incurred as a consequence to be validly claimed as a variation.
Any variation claimed by the other party should be disputed in writing as soon as the other party is aware of the claimed and disputed variation. The earlier parties can agree on a variation, including its scope and effect, and comply with any procedural requirements and raise any disputed issues or potentially disputed issues, the better it is for all.
Security of Payments Act
Read full article here: http://bit.ly/VariationsBuildingWorks
Did you know...

With Payapps you can add and manage variations with ease.
You can clearly label and describe any variations that have arisen outside the scope of work outlined in the original contract.
Support your variations with attached photos and documents of the completed work.