November 9, 2023

Contract Variations and How to Get Paid for Them

Construction Solicitor Abbie Chisnall and Trainee Construction Law Solicitor Alicia Hilton look at variations to your construction contract, recognising how your contract deals with them and how to get paid for them.

Clients often seek advice from our specialist Construction Law Solicitors regarding variations to their contracts and how to protect their position to ensure that they get paid for variations they undertake.

This article discusses what variations are, what to look out for in your contract and how to maximise your chances of being paid for them.

What are contract variations?

A variation is an alteration to the scope of works which can take the form of an addition, substitution or omission from the works described in the contract.

Variations can take many different forms including changes to design, scope of works or an event which occurs outside of the contract. Examples include alterations to quantities required, working conditions, the sequence of work and abortive works.

Importantly, variations can be called a range of different things in a construction contract, including but not limited to:

  • an instruction
  • variation order
  • change
  • compensation event

These are all just different terms to describe a variation.

Do you have to carry out a contract variation?

Whether your variation is valid will depend on whether your contract has a mechanism to allow for a unilateral change to the scope of works. Most standard form contracts including JCT and NEC expressly provide that a contractor is obliged to comply with all instructions, and it is usually a requirement that they be confirmed in writing.

In reality we know that is not what happens on most sites and the majority of instructions are given orally, in the midst of a busy project. You might insist on a written instruction but ultimately the work gets completed and a written instruction may get forgotten about. Unfortunately this can sometimes end in a dispute during the project or at final account stage, which can be a costly event.

Usually, you cannot refuse to carry out a variation as this could be considered a repudiatory breach. However, you should check your contract to understand if this applies.

How to ensure you get paid?

Firstly, it is important to review your contract and understand the variation procedure as it will tell you what is required for a variation to be valid.

Understanding what is included in the scope of works under the contract in important, as failing to do so could result in a belief you are entitled to additional payment, when in fact you are not. If it is not clear, clarify this prior to starting work, as any ambiguity could have financial implications for you.

If the contract requires a formal instruction, ask for a formal instruction. If your contract does not specify a procedure to follow, or you fail to follow the contractual procedure, it is vital to keep a paper trail to evidence your claims for payment of the variations.

Variations should be recorded, whether that be in an email confirming a discussion which took place on site, or your own version of a site instruction form and supporting day works sheets, as this could become crucial to proving that additional work was requested, and subsequently carried out.

Our top tips…

  • Know your contract!
    Understanding what your contract says is imperative. Always check whether your contract has a mechanism to allow for a unilateral change to the scope of works, and be alive to the fact that a variation may not be called a variation in the contract. Look out for words or phrases such as ‘order change’, ‘change instruction’ and ‘compensation event’.
  • Understand the scope of works
    It is important to make sure you understand what falls outside of the contractual scope of works. That way, you will be able to recognise whether it is a variation to the contract or not. If you are unsure about the scope of works, query this before commencing work and agreeing the contract.
  • Record Keeping
    The importance of record keeping when it comes to variations cannot be stressed enough. Ensure that you record all instructions, particularly when instructed verbally. This could be done via a simple email confirming the instructions you received, and this could be the difference between getting paid or not. Equally, record in as much detail as possible what the work for the variation consisted of, the materials used, and the hours/rates of labour it took to complete the works. It is important to be able to substantiate your claim and the devil is in the detail!
  • Seek legal advice
    If you are unsure of what your obligations regarding variations are, instructing an expert construction lawyer to review your contract will provide clarity on what you must do when a variation arises. Similarly, if a dispute arises regarding a variation to the contract which cannot be resolved, seek legal advice.

Please do not hesitate to contact our team of construction law lawyers if you would like to discuss anything in this article further or have any construction law queries that you would like to discuss.

Get Expert Legal Advice

Call us on 01206 593933 today to speak with one of our expert Construction Law Solicitors. Or complete the form below.

Other articles in the series:

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Abbie Chisnall


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