Documents · Glossary

What is a variation in a contract?

A variation is an agreed change to a contract already in force, altering the scope, the price, the timing or the terms. It is made the same way the contract was made, by agreement between the same parties, and it needs to be in writing and signed if the original required changes to be written.

Every long job produces them, and the paperwork is done properly on roughly half. The other half becomes the dispute, because two people remember a corridor conversation differently a year later.

Nuwan Madhusanka · Co-founder

6 min read · Published 12 September 2026

The words used for a change, and where each belongs
Term	Where it is used	What it covers
Variation	Australia and the United Kingdom, building and services	A change to scope, price or time under an existing contract
Change order	North America, and construction software everywhere	The same thing, usually with a numbered form
Amendment	Everywhere, legal drafting	A change to the words of the agreement itself
Provisional sum adjustment	Building contracts	Replacing an allowance with an actual cost
Extension of time	Building contracts	A change to the date only, without a change to price

What a valid variation actually needs

Three things. Agreement by both parties, which means somebody with authority on each side, not a site supervisor and a client's brother in law. Consideration, or execution as a deed, because a change is a new bargain and a promise to do more for nothing is as unenforceable as any other unsupported promise. And compliance with whatever the contract itself says about changes, which usually requires writing and signature. That last requirement matters more than people expect: a contract containing a clause saying no variation is effective unless in writing and signed will generally be held to it, so an agreed change that never made it onto paper may not be a variation at all.

What the document should contain

A number, so variations can be counted and referenced. The date of the original contract and the clause under which the change is made. A plain description of what is changing, written as a difference rather than as a restatement, so a reader can see what moved. The effect on the price, shown as an amount and as a revised contract total, since the running total is what the client's finance team needs. The effect on the completion date, in working days added rather than a new date that nobody recalculates. A line confirming that everything else in the contract is unchanged. And signatures from the same parties, or their authorised representatives, on the same day if possible.

Building work, where the rules are stricter

Residential building contracts in Australia are regulated at state level, and the requirements for variations are specific rather than general. Most states require a variation to be in writing, signed by both parties, to describe the change and to state the price effect and any time effect before the work is carried out. Some limit what can be charged for a variation initiated by the builder, and some require a cost estimate to be given before the owner agrees. Builders who carry out variations on a handshake can find the amount unrecoverable, which is a harsh outcome for work genuinely done and requested. The requirements differ by state, so the relevant fair trading or building authority is the place to check before the first job.

The verbal variation problem

Work is agreed on site, done, and invoiced, and the client says they never approved it at that price. The supplier is then arguing about what was said, against a contract that required writing, with a client who has the money. Even where the law would allow a claim for the value of work accepted, the process is slow and the outcome uncertain. The practical protection costs a few minutes: confirm every on site agreement by email the same day, with the scope, the price and the time effect, and say that work will proceed unless the client objects within a stated period. That is not a signed variation, and it converts an argument about memory into an argument about a document, which is a much better position.

Pricing a variation fairly

Two temptations pull in opposite directions. Pricing generously to keep the relationship, which trains the client to expect it and erodes the margin on the job. And pricing punitively because the client has no alternative supplier mid project, which is remembered long after the job finishes and costs the next one. The defensible position is a published or agreed basis: the rates in the contract, the same margin as the original work, and any genuine disruption cost shown separately with an explanation. Where a variation causes work already done to be redone, say so and price it, because that cost is invisible to a client who only sees the new item.

Keeping a register

Variations accumulate, and the effective contract after nine of them is not the document anybody signed. A one page register listing each variation by number, date, description, amount and days added, with a running revised total and completion date, solves several problems at once. It shows the client where the budget has gone, which prevents the shock at the final invoice. It gives the delivery team the current scope in one place. And it makes the final account straightforward, since the reconciliation is already written. Update it the day each variation is signed rather than at the end, because reconstructing it later is exactly the task nobody has time for.

Questions people ask

Can a contract be varied verbally if it says it cannot?

Generally not, where the contract contains a clause requiring changes to be in writing and signed. Courts have sometimes found ways around such clauses, but relying on that is expensive and uncertain. Treat the clause as meaning what it says and get the paper, particularly where the amount is significant or the relationship is new.

Does a variation need consideration?

Yes, unless the change is executed as a deed. Where both parties are giving something, more work for more money, consideration is obvious. Where one party is simply agreeing to accept less or to release an obligation, it is not, and that is the situation where a deed of variation is the safer instrument.

What is the difference between a variation and a new contract?

A variation changes an existing agreement and leaves the rest in force. A new contract replaces it. The distinction matters for the terms that were negotiated originally, since a replacement starts from whatever the new document says. Where a change is fundamental enough to rewrite the commercial basis, a restated agreement is often cleaner than a fifth variation.

Who can sign a variation?

Whoever has authority to bind the party, which is not always the person on site. For anything material, the same person who signed the original contract, or somebody with written delegated authority. A variation signed by an unauthorised person is a real risk in larger organisations and is the reason contracts usually name the authorised representatives.

Can a client refuse a variation?

They can refuse the change, in which case the original scope stands. What they cannot usually do is insist on the additional work at the original price. Where a variation is required by something outside both parties' control, such as a regulatory change, the contract should say who bears that risk, and the answer is often shared.

Should variations be invoiced separately?

Yes, referencing the variation number, so the client can match each charge to an approved change. Bundling variations into a progress claim makes the claim harder to approve and slower to pay. The same logic applies to the final account, which should list every variation as its own line rather than as a single adjustment.

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Sources

Written and checked by the OneCraft team. Last checked 12 September 2026.