What a variations clause actually controls

The variations clause is the only machinery in your subcontract for changing the work after the price is fixed: who can direct a change, the form that direction must take, how the changed work is valued, and the window you get to claim it. On a standard form that machinery is published and then amended by the special conditions bolted on top — before you sign an AS 4901 covers where those clauses sit.

Everything added to your scope runs through that clause — and so does everything taken away. Queensland's Act defines a variation, for its statutory-trusts and subcontractors'-charges chapters, as an addition to, or an omission from, the contracted work (Building Industry Fairness (Security of Payment) Act 2017 (Qld) ss 8, 104). An omission is a change too, which matters the day work you priced and resourced is handed to someone else.

Six checks to run on your own variations clause

  1. Who can direct a variation. Check which named role can instruct a change — superintendent, contract administrator, project manager, "the Contractor's representative" — and whether anyone else's say-so counts. A direction from someone the clause does not name can leave you doing work with no claim attached to it.
  2. What form the direction has to take. Read whether it requires a written direction, allows a verbal one confirmed in writing within a set time, or counts a variation only when issued on a particular form or through a particular system. This is the requirement most often tightened by amendment, and it decides whether a change you built becomes a change you can bill.
  3. How the changed work gets valued. Work out which valuation route your clause actually sets, and in what order it applies them: an agreed lump sum, rates in the contract's own schedule, reasonable rates, or daywork. Check the rates schedule is attached, whether those rates apply to quantities far outside what they were priced on, and whether preliminaries, supervision and margin are recoverable or deemed included.
  4. How long you have to claim it, and from when. Find the notice period and what starts the clock — the date of the direction, the date you became aware of the change, or the date you start the work. A short window hung off the wrong trigger is how a priced variation becomes an unpaid one, and the discipline that applies to delay notice time limits applies here.
  5. Whether you must keep working while the price is in dispute. Many forms require directed work to proceed and leave the valuation to be settled later. Check whether your copy says that, because it decides whether an unagreed price is a cash-flow problem you carry while you build it.
  6. What the variation does to time, not just money. Added work usually adds duration. Check whether the clause moves the date for completion as well as the price, or whether that needs a separate extension of time claim under a different clause with its own notice period.

How is a variation valued if the contract says nothing?

Where the contract is silent, the security of payment legislation supplies a fallback — and the first thing that fallback does is point straight back at your contract. In Queensland a progress payment is calculated in accordance with the contract where the contract provides for the matter (Building Industry Fairness (Security of Payment) Act 2017 (Qld) s 71), and construction work is valued in accordance with the contract on the same condition — failing which, having regard to the contract price, any other rates or prices stated in the contract, any variation agreed by the parties that adjusts a price by a specific amount, and the estimated cost of rectifying defective work (s 72(1)).

That is Queensland's Act; every state and territory has its own wording, so check the one covering your project. The point travels: the rates written into your subcontract are what get used, so the rates schedule deserves as much reading as the clause pointing to it.

What if the variation is short-paid?

Then you are in payment-claim territory, not variations territory. A variation is claimed as part of a payment claim, and in Queensland a payment claim is a written document that identifies the construction work, states the claimed amount and requests payment — a document bearing the word "invoice" is taken to satisfy that last requirement (Building Industry Fairness (Security of Payment) Act 2017 (Qld) s 68(1), (3)). If the respondent proposes to pay less than claimed, its payment schedule must state why, including its reasons for withholding payment (s 69(c)), and it must not put reasons for withholding into an adjudication response that were not in that schedule (s 82(4)). So the reasons written against your variation at the time are the reasons on the record, and the same goes for what a set-off clause lets them deduct.

What to record the day a change is directed

The paperwork that settles a variation argument is made on the day, not reconstructed at the end of the job. Record who gave the direction and in what form, what the original scope said, what changed, and the labour, plant and materials the change consumed. Where the price is settled after the work, those resource records are what the price gets built from — see daywork or variation for how the two records differ. Photograph the position before anyone starts and again once the changed work is in. If you are keeping this on a phone at the gate, the free tools are a place to start.

Whether a particular clause holds up on your job turns on its wording and the state you work in — one for your own adviser. What you can read for yourself, tonight, is the handful of sentences that decide whether a change to your scope turns into money.