Scope and change

Variations and scope disputes

The work changed. Nobody wrote it down properly. Now one side says it was always included and the other says it is extra.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

Who this page is for

The conversation on site, three months later

Almost every variation dispute begins the same way. Someone stands in a half-built room and says, can you just move that. The tradesperson says yes. Nobody prices it, nobody writes it down, and the work is done that afternoon. Three months later the invoice arrives and both sides are certain, honestly certain, that they remember it differently.

The law does not decide that argument by asking who is more sincere. It decides it by asking what the contract required, whether the change was instructed in the way the contract says a change must be instructed, and what evidence exists of what was agreed. Contemporary documents beat recollection every time — a photograph with a date, a message, a marked-up plan, a site diary.

For residential building work there is an extra layer. The Home Building Act 1989 and the standard NSW contracts require a variation to be recorded in writing and signed before the work is done. A contractor who did the work on a handshake is not automatically left with nothing, but they are arguing uphill, and an owner who agreed on site and now refuses to pay is in a stronger position than they deserve to be.

The other half of this page is about scope. A large proportion of what gets called a variation is not one. If the plans and specifications already required the work, it was priced in the contract sum and charging for it again is not a variation claim, it is a double charge. Working out where the line falls is usually the first real task.

How we help

What the work actually is

Establishing what the contract scope actually was

Reading the contract with the plans, specifications, inclusions and exclusions, and any priced schedule, and forming a view on what was included in the contract sum. Until that is settled, nobody can say whether an item is extra.

Testing each claimed variation against the procedure

Was it instructed, and by whom. Was it instructed in the form the contract requires. Was a price given and accepted before the work was done. Was it claimed within any time limit in the contract. We do this item by item and tell you which items are strong and which are not.

Building the record where the paperwork is thin

Site diaries, photographs with dates, messages, delivery dockets, variations to the plans, invoices from suppliers. A claim with no signed variation is not necessarily a lost claim, but it has to be proved from somewhere, and that somewhere is usually the material nobody thought was evidence at the time.

Putting the claim where it belongs

Some variation disputes belong in a payment claim under the Security of Payment legislation. Others belong in NCAT or a court alongside the defects and the delay. We advise on which route gets you paid sooner and what each one costs.

Questions

Questions people ask first

I agreed to the extra work on site. Do I have to pay for it?

It depends on what the contract said about how variations are to be agreed, on whether the work was already within the scope you had paid for, and on what was actually said. For a residential building contract, changes are required to be in writing and signed, and a contractor who ignored that has a harder claim. Harder is not the same as hopeless, so get the documents looked at before you refuse outright.

I did the extra work and there is nothing in writing. Can I still be paid?

Sometimes. The contract’s procedure matters, and for residential work the Act matters as well, but courts and tribunals do look at what the parties actually did. What decides it is the strength of the contemporaneous record: messages, photographs, site notes, orders for materials. Gather that before you send a letter, not afterwards.

The builder says the plans changed so everything after that is a variation.

A change to the plans can create variations, but it does not turn the whole remaining job into extra work. Each item still has to be tested against what the original scope required. A blanket claim of that kind is usually an invitation to go through the scope properly.

What is the difference between a variation and a provisional sum?

A provisional sum, or a prime cost item, is an allowance in the contract for something that could not be priced exactly when the contract was signed. When the real cost is known the contract sum is adjusted under the clause dealing with those allowances. That is not a variation and it does not need a variation instruction, although the contract will say how the adjustment is calculated.

The variation also delayed the job. Is that included in the price?

Not automatically. Money for the extra work and time for the extra work are usually claimed under different clauses, with different notice requirements. If you claim the cost and say nothing about time, you can find you have priced the work and accepted liquidated damages for the delay it caused. See delay and extensions of time.

Can I refuse to keep working until the variations are paid?

Suspending work is a serious step with its own requirements, whether under the contract or under the Security of Payment legislation, and doing it wrongly can put you in breach and expose you to the other side’s costs of completion. Take advice before you stop, not after.

What to bring

A variation dispute is won or lost on the record made at the time. Bring everything, including the informal material.

Official sources