A man's hand holds a magnifying glass over a contract on a table

How to manage variations to building contracts

Ben Johnson ||

Co-authored by Anthony Losurdo

“Variation” can be a scary word in the building industry. Disagreements about variations are a common cause of disputes and litigation. Despite this, variations can be a helpful tool for owners and building contractors to make changes to the scope of works without risking termination. It is important to understand the variation clause in your building contract before you sign it so that you comply with its requirements and avoid unexpected costs and difficulties.

What is a variation?

In a building contract, the scope of works is typically set out in attached specifications, plans or brief, which form part of the contract. A variation is change to the scope of works in the contract after the contract has been signed. A variation can be used to correct omissions to the original scope of works or make changes that arise during the build.

Common examples of variations include:

  • Additional materials and their installation
  • Additional work to comply with government regulations
  • Changes in price of materials
  • Additional certification and design
  • Changes to the plans
How to apply for a variation

Most building contracts contain a variation clause allowing both the building contractor and homeowner to vary the scope of works during construction. These clauses can vary between contracts, so it is important to review your contract to understand the steps required to apply for a variation under the contract.

If the owner is seeking to vary the scope of works, they usually need to send a request to the building contractor. The next step will require the building contractor to consent to the amendment and provide an offer. That offer may include a description of the changes, revised designs and drawings, pricing changes and/or extension of time applications. The homeowner can agree to the offer through signed written acceptance. Alternatively, the homeowner may dispute the offer which may require reliance on any dispute resolution clauses in the contract.

In most cases, the building contractor will apply for a variation of the scope of works to meet government regulations or where latent conditions arise. When this occurs, the homeowner is usually unable to unreasonably withhold consent to any variation request.

Parties to building contracts must also be aware of any time restrictions in replying to requests and offers of variation. Failing to comply time limits under variation clauses can result in serious consequences.

Although the contract specifies the procedure that should be followed for variations, the Home Building Act (the Act) sets out mandatory formalities for most residential building contracts. The Act requires that a contract to undertake home building work must include a clause to ensure that any agreement to vary the contract, or to vary the plans and specifications for work to be done under the contract, must be in writing and signed by or on behalf of each party.

How we can help

To discuss a construction contract or for help managing a variation, please contact Coleman Greig’s Building & Construction team. Our team can advise you on your contract and assist with any variation requests or disputes that occur during the construction period.

Share:

Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.

Categories
Archives
Author

More posts

Employers should exercise caution when dismissing during probationary period

Can you dismiss an employee during the probationary period? Yes, but a recent case is a lesson in caution. The recent Federal Court decision of ‘Dabboussy v Australian Federation of Islamic Councils’ is a warning to employers to consider the importance of timing if dismissing an employee during probation.

The business impacts from the Government’s new cyber security laws

Cybercrime ‘is a multibillion-dollar industry that threatens the wellbeing and security of every Australian’. In an effort to combat the impact on businesses and individuals, the Australian Government has introduced cyber security legislative reforms into the Parliament.

A guide to intrafamily adoption

Adoption is the process where a parent’s legal rights for their child are transferred to another person. The formal adoption of a stepchild or close relative is known as intrafamily adoption.

Passenger movement and visa data-matching by the ATO

Heading overseas for work or a holiday? Taxation issues, including tax residency, should be on front of mind when departing from or arriving to Australia. Why? Because the Australian Taxation Office (ATO) can follow your footprints and, if you’re not careful, spring unexpected taxes on you.

Is it really necessary for my executor to have so many powers?

People often question why the executor of their estate needs to have so many powers. Simply put – if your executor isn’t given any additional powers by your Will, then they are limited to what is set out in the Trustee Act. One area that this can lead to issues in, is the family home – particularly if beneficiaries aren’t in agreement.

Essential terms of a commercial lease

A commercial lease is a contract that details the rights and obligations of a tenant and landlord. So, what are the necessary terms of a commercial lease?

Responding to data breaches

In the final part of our four-part series on your business’ responsibilities related to cyber attacks and data breaches, Special Counsel John Bennett how businesses should respond to data breaches, including application and requirements of the Notifiable Data Breaches Scheme.

Security of personal information

Part 3 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches where Special Counsel, John Bennett provides an overview of some court decisions and proceedings where ‘security’ of personal information has come into issue.

Parental alienation in Family Law

The concept, Parental Alienation Syndrome, was initially brought about by American psychiatrist Richard Gardner in 1985. The term parental alienation is used to describe a situation where one parent is involved in psychologically manipulating their child to turn against the other parent.

Are you liable for labour hire workers if they are injured?

Many employers (host employers) engage employees of labour hire companies, particularly in the building and construction, hospitality and manufacturing industries. However, what happens when one of these employees gets injured at the host employer’s work site? Who is liable for the injuries?

© 2024 Coleman Greig Lawyers  |  Sitemap  |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230