In the final episode of this season, Bill Barton of Barton Legal provides an in-depth overview of variations in construction and engineering contracts.
Variations are contractual mechanisms that enable an employer or contractor to change aspects of the work during a project. These changes can go on to impact the completion date and overall cost of a project.
In this bite-sized episode, Bill covers:
- What are Variations?
- How do Variations Arise? Changes to the employer's requirements, an existing design being unsuitable or requiring extra work, or the agreed works becoming impossible to carry out in their original form can all lead to variations.
- Determining a Variation: To assess if an instruction is a variation, one must understand the original scope of work. If an instruction falls outside that scope, it is likely a variation. A variation must involve an alteration of work included in the contract.
- Written Instructions and Notice Provisions: Most contracts require written instructions for varied work, allowing the employer to reassess costs or withdraw the instruction. It is crucial to comply with all notice provisions regarding variations, as failing to do so can result in losing entitlement to payment or additional time for the varied work.
- Valuation of Variations: Bill references Clause 5.2.1.2.1 of the standard JCT Design & Build 2016 contract, which states that the value of a variation should be agreed upon by the employer and contractor or, if not agreed, valued by the quantity surveyor. The valuation process can, however, differ across different contract suites (e.g., JCT, NEC, FIDIC).
- Purpose of Variations: Variations are essentially an "invention" designed to keep contracts alive and prevent frustration by adding additional flexibility. Without them, a new contract would be needed for every minor change, which would be impractical and costly.
This is only a brief overview of this topic; for detailed information or advice, Bill encourages listeners to contact Barton Legal.
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