Variations in Building Contracts
Variations in Building Contracts can cause problems for builders and homeowners.
Building or renovating a property is an exciting venture, but it rarely unfolds exactly as planned.
Changes in design preferences, unexpected site conditions, or updated regulatory requirements can all lead to modifications in the original construction agreement.
These changes, known as variations, are inevitable in many building projects and can significantly affect timelines, costs, and even the relationship between homeowners and builders.
Understanding variations is essential for homeowners to ensure that any alterations to the agreed scope of work are properly documented and fairly priced. Clear knowledge of the process also helps prevent disputes and protects against unexpected financial liabilities.
For builders, effectively managing variations is critical to maintaining profitability, meeting client expectations, and complying with legal obligations. Failure to correctly address variations can result in costly disputes, reputational damage, or contract termination.
Understanding Variations in Building Contracts
Both homeowners and builders are vested in ensuring variations are handled transparently and efficiently.
Being informed about how variations work empowers homeowners to make confident decisions when changes arise. It also clarifies how those changes might impact the project’s timeline and overall cost.
Builders, on the other hand, must balance accommodating client requests and maintaining control over project delivery and budget.
Understanding the legal requirements and best practices surrounding variations minimises risk and promotes smooth project execution.
When both parties understand their rights and responsibilities regarding variations, it fosters trust and reduces the likelihood of conflicts.
This shared knowledge lays the groundwork for a collaborative working relationship throughout construction.
Overview of Legal and Practical Challenges
While variations are common, they are also one of the leading causes of construction disputes, requiring building and construction lawyers.
The legal framework governing variations requires that any changes to the contract be documented and agreed upon by both parties before work begins.
Failing to follow proper procedures can lead to disagreements over costs, delays, or even litigation.
Practical challenges also abound. Variations can disrupt project schedules, strain budgets, and complicate demanding construction timelines.
Miscommunication between homeowners, builders, and subcontractors can further complicate matters.
Additionally, external factors such as changing building codes or unforeseen site conditions can trigger variations that must be managed swiftly and lawfully.
To successfully navigate these challenges, all parties must approach variations with diligence, clear communication, and a thorough understanding of the relevant legal obligations.
What Are Variations in Building Contracts?
Variations in building contracts are changes to the original terms of a construction agreement that may affect the work’s scope, quality, or quantity.
They allow flexibility as client needs or circumstances evolve, but must be carefully managed to prevent disputes, cost overruns, or delays.
Variations typically fall into three categories: additions (new work or features added), omissions (removal of agreed work), and substitutions (replacing agreed materials or methods).
All variations should be documented and formally approved by the homeowner and the contractor before work begins to clarify cost, timing, and contractual obligations.
Definition of Variations in Building Contracts
In the construction industry, a variation refers to any change made to the original terms of a building contract after it has been signed.
These changes can affect the scope, quality, or quantity of the work agreed upon and may arise for various reasons throughout the project’s life cycle.
In section 67A of the QBCC Act, variation is defined as:
variation, of a building contract, means an addition to, or an omission from, the building work the subject of the contract.
Variations are routine in building projects, offering flexibility when circumstances or client preferences evolve. However, they must be managed carefully to avoid misunderstandings, cost overruns, and potential disputes.
Typically, the property owner and the contractor must agree on a variation before any additional work commences.
Proper documentation is essential, detailing the nature of the change, its impact on the project timeline, and any adjustments to the contract price. Without formal approval, disputes about payment or the scope of work can quickly arise.
Types of Variations in Building Contracts
Variations generally fall into three key categories:
- Variation by Addition
- Variation by Omission
- Variation by Substitution
We will explain these in more detail below:
Variation by Addition
A variation by addition occurs when new work or features that were not part of the original contract are incorporated into the project.
This is one of the most common types of variation, often arising from the homeowner’s evolving preferences or unforeseen opportunities to enhance the design.
For example, a homeowner may install extra cabinetry for additional storage, add an alfresco entertaining area, or upgrade to higher-end finishes or appliances midway through the build.
While such additions can significantly improve the property’s functionality and aesthetic appeal, they almost always require adjustments to both the contract price and the construction schedule.
Additional work typically involves extra labour, materials, and potentially even specialist subcontractors.
These changes must be documented, with the scope, cost implications, and any expected delays fully detailed and agreed upon by both parties before the work commences.
Variation by Omission
A variation by omission involves removing some aspects of the agreed work from the contract.
This may be driven by budget constraints, changes in design preferences, or practical considerations encountered during the project.
For instance, a homeowner might eliminate decorative features, reduce the size of planned outdoor areas, or choose more economical materials to keep the project within financial limits.
While omissions can help control costs, they can also affect the overall design and functionality of the finished build.
Any omissions must be carefully considered and formally documented to avoid misunderstandings or disputes later.
The reduction in work should be reflected in a revised contract price and may also result in changes to the project timeline.
Variation by Substitution
A variation by substitution occurs when an agreed-upon material, product, or construction method is replaced with an alternative. This can be due to supply chain issues, changes in availability, cost considerations, or personal preference.
For example, a particular type of flooring specified in the contract might be out of stock or discontinued, prompting the selection of a comparable alternative.
Similarly, a homeowner may upgrade to a different brand of kitchen appliances offering better performance or aesthetics.
While substitutions can sometimes be cost-neutral, they often have implications for pricing, timelines, and sometimes even compliance with building codes or warranty conditions.
As with other variations, substitutions must be properly documented and approved by both parties to ensure transparency and to avoid potential disputes over quality, pricing, or performance standards.
Why Formal Processes Matter
Whether a variation involves an addition, omission, or substitution, it has the potential to impact the project’s cost, duration, and quality outcomes.
Without a clear, formal process for identifying, approving, and recording variations, homeowners and builders risk significant risks, including cost blowouts, delays, and legal disputes.
A robust variation process ensures that all parties have a shared understanding of the changes, their reasons, and the agreed-upon outcomes.
It protects both the homeowner’s investment and the builder’s interests, fostering trust and accountability throughout the project.
Common Triggers for Variations in Building Contracts
Several factors frequently cause variations in building contracts. While some are within the homeowner or builder’s control, others result from unforeseen circumstances or changes to external requirements.
Understanding these causes is vital to managing variations effectively and mitigating cost, time, and project outcomes risks.
We explore the most common triggers below:
Variations Because of Client Changes
As building projects progress, homeowners often rethink elements of the original design or scope.
Changes in personal preferences, evolving lifestyle needs, or the desire to incorporate new trends or technologies can all prompt modifications to the agreed-upon work.
For example, a homeowner might upgrade standard fixtures to premium options, alter room layouts for improved functionality, or add features such as built-in storage, additional lighting, or expanded outdoor living areas.
While such changes can enhance the value and enjoyment of the finished property, they typically result in increased costs and potential delays.
Clear communication between the homeowner and the builder is essential to ensure that any requested changes are feasible, priced appropriately, and integrated into the project timeline without disrupting progress.
Variations Because of Unforeseen Conditions
Even with detailed planning and site investigations, construction projects can encounter unforeseen conditions that necessitate variations. These may include:
- Environmental or heritage constraints are identified during construction.
- Hidden structural defects are discovered during renovation or demolition.
- Unexpected utility locations or underground services interfering with planned works.
- Unstable or contaminated soil requiring additional foundations or soil treatment.
Such circumstances can pose significant challenges, requiring prompt decision-making and specialist advice to develop practical solutions.
Variations arising from unforeseen conditions may lead to cost and project duration adjustments, emphasising the importance of flexibility and contingency planning in building contracts.
Variations Because of Regulatory Shifts
Construction projects are subject to a wide range of statutory and regulatory requirements.
Changes to building codes, planning laws, environmental standards, or workplace health and safety regulations may occasionally occur after a contract has been executed.
For instance, updated energy efficiency requirements might necessitate alterations to insulation or glazing specifications, or new fire safety standards could impact design elements such as materials or building layout.
Compliance with such regulatory changes is mandatory and can involve design modifications and additional construction work.
Builders and homeowners must stay informed about regulatory updates and be prepared to accommodate necessary variations to ensure ongoing compliance and avoid penalties or project delays.
The Importance of Planning for Variations in Building Contracts
Recognising the common triggers for variations allows homeowners and contractors to adopt proactive strategies. This includes:
- Allowing for reasonable contingencies in project budgets and timelines.
- Clear variation clauses should be included in the building contract.
- Maintaining open lines of communication to address changes promptly.
- Documenting all agreed-upon variations thoroughly to avoid misunderstandings.
By anticipating and managing potential changes effectively, parties can maintain control over the project, minimise disruption, and foster a collaborative working relationship.
Legal Foundations for Variations in Building Contracts
Building contracts in Queensland are governed by a clear legal framework that outlines how variations must be managed.
This framework protects homeowners and builders by promoting transparency, fairness, and accountability throughout construction.
QBCC Act 1991 — Key Provisions
The Queensland Building and Construction Commission Act 1991 establishes the statutory requirements for variations to domestic building contracts.
Under this legislation, any change to the original contract must be documented in writing and agreed upon by both parties before the variation work commences.
This includes the description of the proposed changes and any adjustments to the contract price and timelines.
Section 40 of schedule 1b of the QBCC Act states:
(1) This section applies if there is to be a variation of a regulated contract.
(2) The building contractor must give the building owner a copy of the variation in writing before the first of the following happens—
(a) 5 business days elapse from the day the building contractor and the building owner agree to the variation;
(b) any domestic building work the subject of the variation starts.
Penalty—
Maximum penalty—20 penalty units.
(3) The building contractor may give the building owner the variation under subsection (2) —
(a) personally; or
(b) by sending it by post, facsimile or email; or
(c) in accordance with any provision in the contract providing for service of notices on the building owner by the building contractor.
(4) In a proceeding for a contravention of subsection (2) , it is a defence for the building contractor to prove that—
(a) the variation is for domestic building work that is required to be carried out urgently; and
(b) it is not reasonably practicable, in the particular circumstances, to produce a copy of the variation in writing before carrying out the work.
(5) The building contractor must not start to carry out any domestic building work the subject of the variation before the building owner agrees to the variation in writing.
The Act requires builders to present variation proposals to homeowners clearly and promptly.
Homeowners, in turn, must provide written approval before any varied work proceeds, except in limited circumstances involving urgent work where prior written agreement is impractical.
The legislation aims to minimise disputes by ensuring that both parties understand and agree to the implications of changes before they are carried out.
In addition, the Act restricts contractors from demanding payment for variation work until that work has started and all relevant approvals are in place, further safeguarding homeowners from unexpected financial liabilities.
Section 41 of schedule 1b of the QBCC Act outlines the requirements of the variation document, to include:
41 General contents of document evidencing a variation
(1) The building contractor under a regulated contract must ensure a document evidencing a variation of the contract complies with the formal requirements for a variation.
Penalty—
Maximum penalty—20 penalty units.
(2) The document evidencing the variation complies with the formal requirements if it—
(a) is readily legible; and
(b) describes the variation; and
(c) states the date of the request for the variation; and
(d) if the variation will result in a delay affecting the subject work—states the building contractor’s reasonable estimate for the period of delay; and
(e) states the change to the contract price because of the variation, or the method for calculating the change to the contract price because of the variation; and
(f) if the variation results in an increase in the contract price—states when the increase is to be paid; and
(g) if the variation results in a decrease in the contract price—states when the decrease is to be accounted for.
(3) Any increase in the contract price as a result of the variation can not be required to be paid before work the subject of the variation is started.
A building contractor must ensure any document recording a contract variation is legible and includes: a description of the variation, the request date, estimated delay (if any), changes to the contract price or how they’ll be calculated, and payment timing for any price increase or decrease.
Importantly, no price increase can be demanded before the variation work starts.
Failing to meet these requirements can result in a penalty of up to 20 penalty units.
Read a detailed article here – Price Increases in Fixed Price Building Contracts Qld
Standard Contract Clauses — AS 4000, and CIC-1
Standard form construction contracts widely used in Queensland incorporate detailed provisions for managing variations.
These clauses provide a structured process for proposing, approving, and valuing changes to the work. For example:
AS 4000 contracts require that variations be instructed or approved in writing and outline how such changes’ cost and time implications are to be assessed.
These contracts also detail the process for extending timeframes where variations impact the construction schedule, including:
- Authority – The Superintendent has the power to direct variations or accept contractor proposals for variations.
- Form – Variations must be in writing. Oral instructions are generally not sufficient unless later confirmed in writing.
- Scope – Can cover additions, omissions, substitutions, changes in sequence, or the timing of work.
- Valuation – If the variation price is not agreed upfront, it is valued based on contract rates or reasonable costs (labour, materials, overheads, profit).
- Time Extensions – The contractor may be entitled to a time extension if the variation affects progress or completion, subject to proper notice and assessment.
The Construction Industry Contract (CIC-1) similarly includes mechanisms for documenting variations and determining their effect on project cost and completion dates, including:
- Authority – The contract administrator or superintendent (if appointed) can instruct variations or approve variation proposals submitted by the contractor.
- Form – Variations must be in writing. Any verbal instructions or agreements must be confirmed in writing to be enforceable.
- Scope of Variations – Variations under CIC-1 can include – adding or omitting work – changing the quality, quantity, or character of the work – or altering the sequence or timing of the work.
- Valuation – If the parties don’t agree on the price of a variation upfront, CIC-1 provides a method to calculate the cost. This usually involves applying any relevant contract rates or prices, or if no applicable rates exist, using reasonable labour, materials, and other expenses costs, plus a margin for overheads and profit.
- Time Extensions – If the variation impacts the project’s timeline, the contractor may claim an extension of time. The contractor must notify the principal (or superintendent) and provide details of the expected delay.
- Procedure – CIC-1 sets out a straightforward process for proposing, approving, valuing, and recording variations to prevent misunderstandings and ensure both parties agree on changes before work begins.
These standard contract provisions promote consistency across the industry and help prevent ambiguity when changes arise.
Both homeowners and builders are encouraged to familiarise themselves with the specific variation clauses in their chosen contract to ensure compliance and avoid potential disputes.
Comparison of Variations in Building Contracts — AS 4000, CIC-1, and QBCC Act
The table below shows what the legislation looks like stacked side by side:
| Aspect | AS 4000 | CIC-1 | QBCC Act 1991 |
| Who can instruct/approve variations? | Superintendent | Contract administrator or superintendent | Both homeowner and contractor must agree |
| Form requirement | Must be in writing | Must be in writing | Must be in writing and meet formal requirements (s. 41) |
| Scope of variations | Additions, omissions, substitutions, changes in sequence or timing | Additions, omissions, changes in quality, quantity, sequence or timing | Any change to scope, price, or timeline |
| Pricing/valuation | Contract rates or, if none apply, reasonable cost plus overheads and profit | Contract rates or reasonable costs plus overheads and profit | Must state price change or calculation method clearly |
| Time extensions | Permitted if variation affects progress/completion, with formal notice | Permitted if variation affects timeline, with formal notice | Must state estimated delay period if applicable |
| Urgent/necessary work | Allowed if directed, but should be confirmed in writing | Allowed but must be documented and confirmed | Urgent work can proceed without prior approval, but written record required ASAP |
| Payment timing | As per contract terms or agreement | As per contract terms or agreement | No payment for a price increase can be demanded before variation work starts (s. 41(3)) |
Variations in Building Contracts – Quantum Meruit
In certain situations, additional work requested during a project may not qualify as a variation under the original contract.
This can occur when the work is so fundamentally different from the agreed scope that it falls outside the contract’s variation provisions.
When this happens, the extra work may give rise to a new, implied agreement between the parties.
In legal terms, a contractor may seek payment on a quantum meruit basis, which means “as much as is deserved.”
This principle allows a contractor to recover a reasonable payment for work completed outside the original contract, even if no formal agreement or price was set beforehand.
However, claiming payment under quantum meruit is not automatic. Courts will examine whether the parties intended to form a new contract and whether the homeowner benefited from the additional work.
To avoid uncertainty, it is always preferable to document any significant changes as formal variations within the original contract wherever possible.
Variations in Building Contracts: How It Should Work
Variations are inevitable in many building projects, but they must be managed within a clear and structured approval process to protect both the homeowner and the builder.
Failing to follow the proper procedures can lead to confusion, cost disputes, project delays, and potential legal action.
Read our article – Construction Lawyers – Why Do I Need One?
A well-managed variation approval process ensures that any changes are agreed upon transparently and that both parties understand their rights and responsibilities.
Written Agreement Requirements
Before any variation work begins, the builder and the homeowner must agree to the proposed changes in writing. This written agreement should include:
- A detailed description of the variation.
- The date the variation was requested.
- Any expected changes to the contract price or how those changes will be calculated.
- The estimated period of any delay caused by the variation.
- Payment terms for any increase (or credit for any decrease) in the contract price.
The written agreement is a formal record that both parties have consented to the change and understand its financial and scheduling implications.
Without this documentation, disputes over the variation’s scope, cost, or timing can easily arise.
The 5-Business Day Rule
Under Queensland regulations, once a variation has been agreed upon, the builder must provide the homeowner with a written copy within five business days.
This timeframe is designed to ensure that homeowners receive timely and accurate information about any changes to their project and can maintain proper records.
The five-day rule also protects builders by creating a clear deadline for providing formal notice, reducing the risk of delays or misunderstandings that can occur when variation agreements are made verbally or informally.
When Urgent Variations in Building Contracts Without Written Approval
There are limited circumstances where variation work can commence without prior written approval. Urgent variations may proceed immediately if the work is necessary to:
- Address a health or safety risk.
- Prevent damage to the property.
- Comply with a statutory requirement or building regulation that demands immediate action.
In such cases, preparing a written variation agreement may not be reasonably practicable before starting the work.
However, even when urgent work is carried out, a written record of the variation should be prepared and provided to the homeowner as soon as possible after the work begins.
This ensures that all changes are properly documented, even when time constraints prevent full compliance with the usual approval process.
The Role of the Superintendent
In many construction contracts, particularly in larger or more complex projects, a superintendent is appointed to oversee the contract’s administration and act as an intermediary between the builder and the property owner.
While their role can vary depending on the contract terms, superintendents commonly have the authority to assess progress, approve work quality, certify payments, and, importantly, instruct variations.
Authority to Instruct Variations in Building Contracts
The authority of a superintendent to instruct variations is usually defined within the contract itself.
Most standard building contracts grant the superintendent the power to order or approve variations to the works.
This can include changes to the scope, design, materials, or construction methods.
The superintendent’s power to direct variations allows for flexibility during construction. Projects rarely proceed exactly as planned, and unforeseen challenges or changes in client requirements can necessitate adjustments.
A superintendent’s ability to quickly and efficiently authorise variations ensures that these changes can be implemented without halting work or causing lengthy delays while new agreements are negotiated.
However, this authority is not unlimited. The superintendent’s powers are confined by the express terms of the contract and by the general principles of contract and agency law.
Limits of Power and Legal Risks
A superintendent does not have unrestricted power to alter the contract or impose obligations beyond the parties’ agreed.
Their ability to instruct variations must stay within the boundaries set out in the contract and reflect the contracting parties’ intentions.
If the superintendent directs work that exceeds the contract’s original scope without proper authorisation or outside the powers granted by the contract, this can create significant legal risks.
Builders who proceed with unauthorised variations may be unable to recover payment for the extra work, while owners may dispute the necessity or cost of the changes.
Furthermore, without apparent contractual authority, the superintendent cannot enter into separate agreements or make decisions that fundamentally alter the contractual relationship between the owner and the builder.
Doing so could expose the superintendent and the party they represent to claims of breach of contract or even repudiation.
Variations in Building Contracts – Superintendent Oversteps
If a superintendent exceeds their contractual authority and orders work that is not properly authorised, several legal outcomes may follow:
- No entitlement to payment – Builders may be unable to claim payment for unauthorised work unless a new agreement is later reached or a claim for reasonable payment (quantum meruit) can be established.
- Repudiation of the contract – An overreach by the superintendent may amount to a repudiation of the contract by the party they represent (usually the property owner). This can give the other party grounds to terminate the contract and seek damages.
- Ratification or estoppel – In some cases, if the property owner knowingly accepts or benefits from the unauthorised work and does not object, they may be taken to have ratified the superintendent’s instructions. Alternatively, the owner may be legally prevented (estopped) from denying the validity of the variation.
- Personal liability – While rare, a superintendent may be liable if they act negligently or breach their duties under the contract or applicable laws.
To prevent such issues, it is vital that both homeowners and builders understand the limits of the superintendent’s role and ensure that all variations are properly authorised and documented before work proceeds.
Variations in Building Contracts: Transparency and Fairness
One of the most sensitive aspects of managing variations in building contracts is determining how changes will affect the project’s overall cost.
Pricing variations require a transparent and fair approach to avoid misunderstandings, disputes, and potential breaches of contract.
Both homeowners and builders have essential rights and responsibilities in this process.
Setting and Agreeing on Variation Costs
When a variation arises, the builder must provide a clear and reasonable estimate or quotation for the additional or reduced work cost.
This price should reflect not only the direct cost of materials and labour but also any indirect costs such as project management, design changes, subcontractor adjustments, and potential delays that could impact the overall timeline.
Before any variation work begins, both parties must agree in writing to the price adjustment or, if the exact amount cannot be determined upfront, the method by which the cost will be calculated.
This agreement should also specify when payment for the variation is due and how it will be incorporated into the overall contract sum.
Builders should exercise care to ensure the variation price is fair, competitive, and consistent with market rates.
Homeowners, in turn, should review proposed costs carefully and seek clarification or independent advice if any aspect of the pricing appears unclear or excessive.
Homeowners’ Rights to Detailed Cost Breakdowns
Homeowners are entitled to request and receive a detailed breakdown of the costs associated with any variation. This breakdown should itemise:
- Administrative or project management fees.
- Any contingency allowances or provisional sums.
- Any specialist subcontractor fees.
- Equipment or machinery hire costs.
- Labour costs, including hourly rates where applicable.
- Materials and their quantities.
A transparent cost breakdown builds trust and ensures homeowners fully understand what they are paying for.
It also enables more informed decision-making about whether to proceed with the variation or explore alternative solutions.
For more significant or complex variations, homeowners may seek independent estimates or engage a quantity surveyor to assess the reasonableness of the builder’s pricing.
Common Variation Disputes and How to Avoid Them
Despite best efforts, disagreements over the cost of variations are not uncommon. Typical sources of dispute include:
- Builders including excessive margins or unanticipated charges.
- Discrepancies between the estimated cost and final charges.
- Variations are being carried out without prior written agreement.
Disputes over whether specific work qualifies as a variation or should have been included in the original contract price.
To minimise the risk of such disputes, homeowners and builders should:
- Always formalise variations in writing before work begins.
- Ensure cost estimates are as detailed and accurate as possible.
- Keep thorough records of all communications and agreements.
- Maintain open and honest dialogue throughout the project.
- Refer to the variation provisions in the contract and comply strictly with their requirements.
If a pricing dispute cannot be resolved through negotiation, parties may seek assistance through dispute resolution mechanisms such as mediation, adjudication, or, if necessary, legal proceedings.
By prioritising transparency, fairness, and proactive communication, homeowners and builders can effectively manage variation pricing, maintain positive working relationships, and protect the project’s financial integrity.
Read a more detailed article here – How to Avoid and Manage Building Disputes in Queensland
Impact of Variations on Project Timelines
Variations can affect the scope and cost of a construction project and have significant implications for its timeline.
Managing these impacts requires careful planning, timely communication, and strict adherence to contractual obligations to avoid delays and disputes.
Extensions of Time and Notification Requirements
When a variation is likely to delay the completion of the works, the builder must notify the homeowner promptly.
Most building contracts require the builder to provide written notice detailing:
- Any revised completion date.
- The expected period of delay.
- The nature of the variation.
This notice must generally be provided within a specified timeframe, often within five business days of the variation being agreed or the delay becoming apparent.
Failing to notify the homeowner properly may prevent the builder from later claiming an extension of time, exposing them to late completion penalties.
Once the variation and any associated time extension are agreed upon, the contract’s completion date should be formally adjusted.
This ensures both parties have a clear, shared understanding of the revised project timeline and reduces the likelihood of future misunderstandings or claims for damages.
Properly documenting time extensions protects the builder from liability and helps homeowners plan around any changes to the expected completion date, particularly where move-in dates or financing arrangements are involved.
Dealing with Inclement Weather Delays
In Queensland, the unpredictable nature of the climate can present significant challenges for construction projects.
Heavy rainfall, storms, and other adverse weather conditions can impede progress, particularly for work that depends on dry conditions or outdoor access.
Most building contracts provide for a certain number of inclement weather days, which are allowances built into the project schedule to account for expected weather-related delays.
These allowances reflect historical weather patterns and provide the builder a fair and reasonable buffer.
If inclement weather exceeds the allocated allowance, the builder may be entitled to claim additional extensions of time.
However, to do so, the builder must provide evidence that the allocated days have been used and that the additional delays were beyond their control.
As with variations, the homeowner must be given timely written notice of the delay, outlining the nature and duration of the weather event and its impact on the project.
Please read our article on Delays in Construction Contracts in Qld
Builders are also expected to take reasonable steps to mitigate delays caused by bad weather, such as rescheduling work or protecting partially completed areas from further damage.
By systematically and transparently managing variations and external factors like weather, homeowners and builders can minimise disruptions and maintain a cooperative approach to the challenges that often arise during construction projects.
Clear communication, accurate record-keeping, and proactive planning are essential in keeping projects on track, even when unexpected changes occur.
Work Within and Outside the Contract Scope
Determining whether particular work falls within the original contract scope or constitutes a variation is critical in construction projects.
This distinction affects pricing and timelines and has significant legal implications for homeowners and contractors.
How to Identify If Work Is Within the Original Scope
The contract itself is the starting point for identifying whether work is within the original scope. The contract documents—including the scope of works, plans, specifications, and any included schedules—set out the agreed deliverables and standards.
Work expressly described or reasonably inferred from these documents will generally be considered within the original scope.
However, interpreting the scope is not always straightforward. Courts and adjudicators will consider not only the contract’s wording but also the parties’ intentions at the time the contract was formed, industry standards, and, in some cases, past dealings between the parties.
Ambiguities are often resolved by applying principles of contractual construction, aiming to give effect to the agreement’s commercial purpose.
If a contractor is asked to perform work not included in the contract or arises from circumstances not contemplated when the contract was signed, it will likely be treated as a variation requiring formal approval.
Risks of Scope Creep and Contractor Refusal Rights
Scope creep—the gradual expansion of the project’s scope without formal variations or adjustments to the contract price—is a common risk in construction projects.
It can occur when homeowners request minor changes that accumulate over time or when the parties’ assumptions about the work to be performed differ.
For homeowners, scope creep can lead to unexpected cost increases and extended timelines.
For contractors, it may result in unremunerated work, strained resources, and potential breaches of other contractual commitments.
Contractors are not obligated to perform work outside the agreed scope without a formal variation.
A contractor can refuse if asked to carry out additional work without an appropriate agreement.
Proceeding without formally addressing the change can expose the contractor to difficulties recovering payment or defending against claims of poor workmanship if disputes arise.
Maintaining a disciplined approach to identifying, pricing, and approving variations is essential to avoiding scope creep’s financial and operational risks.
Variations in Building Contracts and Repudiation
In some cases, the nature or extent of proposed changes may go beyond what can reasonably be treated as a variation.
Where a change fundamentally alters the original agreement, such as doubling the size of the project, switching to an entirely different design concept, or requiring work that falls outside the contractor’s expertise, it may constitute a repudiation of the contract.
Repudiation occurs when one party demonstrates an unwillingness or inability to be bound by the contract’s essential terms.
If a homeowner insists on changes so significant that they are incompatible with the existing agreement, the contractor may treat this as a repudiation, potentially entitling them to terminate the contract and seek damages.
Similarly, if a contractor unreasonably refuses to perform agreed work or withdraws from the project without justification, they may be found to have repudiated the contract.
To avoid reaching this point, both parties need to approach significant changes collaboratively and, where necessary, consider negotiating a new contract or formal amendment that reflects the revised scope of the project.
A clear understanding of the boundaries between work within the original scope and variations and adherence to proper variation processes is essential to preserving the contractual relationship and ensuring the successful delivery of construction projects.
Dispute Resolution for Variations in Building Contracts
Even with thorough documentation and clear communication, disputes over variations can still arise during a building project.
Common issues include disagreements about whether certain work constitutes a variation, the cost of variations, delays resulting from changes, or the quality of the varied work.
Fortunately, several dispute resolution pathways are available to homeowners and contractors to address these challenges fairly and efficiently.
QBCC Processes and Mediation Options
The Queensland Building and Construction Commission (QBCC) provides a structured process for resolving building disputes, including variations disputes.
The QBCC encourages parties to first attempt informal resolution through direct negotiation. Clear communication and a willingness to compromise can often resolve many disputes before formal action is necessary.
If negotiation fails, parties can access the QBCC’s dispute resolution services. This may involve conciliation or mediation, where an independent third party facilitates discussions to help the parties reach a mutually acceptable solution.
Mediation can be a cost-effective and timely way to resolve variation disputes without escalating to formal legal proceedings.
In cases where building work is defective or incomplete due to variation-related disagreements, the QBCC also has the power to issue directions to rectify work or take enforcement action where appropriate.
Quantum Meruit Claims
If a builder performs work outside the original contract scope without a formal variation agreement—whether due to oversight, urgent necessity, or at the homeowner’s informal request – they may seek compensation under the principle of quantum meruit.
This Latin term means “as much as is deserved”. It allows a party to recover reasonable payment for work completed, even without a binding contractual agreement for that specific work.
To succeed in a quantum meruit claim, the builder must demonstrate that:
- The work was performed at the request or with the homeowner’s knowledge.
- The homeowner accepted or benefited from the work.
- No agreement existed regarding payment for the work, or the agreed-upon fee is unenforceable.
Quantum meruit claims can be complex and are often used as a last resort when formal variation procedures were not followed.
Both parties should avoid relying on such claims by ensuring all variations are documented and agreed upon in advance.
When to Escalate to QCAT or Court
If informal negotiations and mediation fail to resolve the dispute, parties may escalate the matter to the Queensland Civil and Administrative Tribunal (QCAT).
QCAT provides a relatively accessible and affordable forum for resolving building disputes, including those involving variations. It has the power to:
- Determine whether a variation is valid.
- Assess and order payment for variations.
- Make binding decisions on contract interpretation and enforcement.
For larger or more complex disputes—especially those involving substantial financial claims or legal principles beyond QCAT’s jurisdiction—parties may need to seek resolution through the courts.
Court proceedings can address contractual breaches, quantum meruit claims, and issues of repudiation or damages.
Before taking formal legal action, homeowners and contractors should carefully weigh the potential costs, time commitments, and risks.
Legal advice is highly recommended to assess the case’s strengths and weaknesses and to explore alternative dispute resolution options where appropriate.
Effective dispute resolution requires a clear understanding of rights and obligations, diligent record-keeping, and a willingness to engage in constructive dialogue.
Homeowners and builders can often avoid costly and stressful litigation by following proper procedures and seeking early resolution.
Managing Variations in Building Contracts
Successfully managing variations in building contracts requires diligence, clear communication, and strict adherence to legal and contractual procedures.
Both homeowners and contractors play essential roles in ensuring that variations are handled smoothly, minimising the risk of disputes and maintaining the project’s integrity.
Documentation, Approvals, and Communication
Homeowners should thoroughly document all variations, including detailed descriptions, cost changes, timeline impacts, and payment terms.
Prompt written approvals should be provided after careful review, and any uncertainties should be clarified before proceeding.
Maintaining open and timely communication with the builder is essential to managing changes effectively.
Additionally, homeowners should understand the variation clauses in their contract to safeguard their rights and maintain realistic expectations throughout the project.
Maintain Thorough Documentation
Homeowners should ensure that all proposed variations are clearly documented before work begins. This documentation should include a detailed description of the changes, the agreed cost adjustments, any potential impact on the project timeline, and payment terms.
Keeping copies of all variation requests, approvals, and related correspondence creates a valuable paper trail that can help resolve misunderstandings or disputes if they arise.
Provide Prompt and Clear Approvals
To avoid delaying the project, homeowners should review variation proposals promptly and provide written approvals when satisfied with the terms.
If further clarification is needed, homeowners should not hesitate to ask for a breakdown of costs or explanations regarding how the changes will affect the overall build.
Maintain Open Communication
Regular and open communication with the builder or contractor is essential. Discussing potential changes early allows both parties to assess feasibility and plan for any financial or scheduling impacts.
Homeowners should notify the builder promptly if they change their mind about a variation or if financial or other considerations might affect decision-making.
Understand the Contract
Homeowners should familiarise themselves with the variation clauses in their contract to fully understand their rights and obligations. This knowledge can prevent unrealistic expectations and promote fair dealings throughout the project.
Legal Compliance and Record-Keeping
Contractors must strictly follow legal and contractual procedures when managing variations, including securing written approvals and clearly stating any cost or time impacts.
They should provide detailed, transparent cost breakdowns and maintain comprehensive records of all variation-related documents and communications.
Proactive communication with homeowners about potential changes is essential to manage expectations and maintain trust.
Contractors must also carefully monitor the project scope and advise homeowners when proposed changes require a new agreement rather than a simple variation.
Follow Legal and Contractual Procedures
Contractors must comply with all legal requirements and the terms of the contract when handling variations.
This includes obtaining written approvals before commencing any variation work, adhering to notification timeframes, and clearly stating any cost or time impacts.
Provide Detailed Costings
Transparent pricing is critical to maintaining trust. Contractors should provide homeowners detailed cost breakdowns for each proposed variation, including materials, labour, and additional overheads or contingency allowances. These should be as accurate and realistic as possible, where estimates are necessary.
Keep Comprehensive Records
Contractors must maintain accurate and complete records. These should include variation proposals, homeowner approvals, correspondence, site records, and any changes to project timelines or payment schedules. Good record-keeping can be invaluable if disputes arise or compliance with regulatory requirements must be demonstrated.
Communicate Proactively
Contractors should inform homeowners of potential variations as soon as they arise, discussing the implications openly and professionally. Clear communication fosters cooperation and helps manage expectations regarding costs, timeframes, and project outcomes.
Manage Scope Carefully
Contractors must be vigilant in monitoring the scope of work. If requested changes exceed what is permissible as a variation under the contract or would significantly alter the nature of the project, contractors should advise the homeowner accordingly and, if necessary, negotiate a new agreement.
By following these best practices, homeowners and contractors can work collaboratively to manage variations effectively, safeguard their respective interests, and ensure the successful completion of the building project. A proactive and transparent approach reduces the likelihood of conflict and contributes to a positive working relationship.
Do Variations in Building Contracts Always Require Payment?
Variations often involve adjustments to a building project’s cost, but not every variation necessarily results in an obligation to pay additional sums.
The entitlement to payment for variation work depends on several factors, including the nature of the change, compliance with contractual and legal procedures, and whether the variation increases or decreases the contractor’s workload or costs.
A clear understanding of these principles is essential for homeowners and contractors to avoid misunderstandings and potential disputes.
Authorised Variations
Where both parties have agreed to a variation in writing before the work commences—and have included details such as the nature of the change, its cost implications, and any impact on the project timeline—the builder is ordinarily entitled to payment in accordance with that agreement.
Authorised variations typically fall into two categories:
- Additions or Substitutions: Where extra work is required or existing work is altered, resulting in additional labour, materials, or specialist services.
- Owner-Initiated Changes: Where the homeowner requests upgrades, changes in materials, or design alterations.
In these cases, payment forms part of the revised contract price, and the contractor can recover the agreed amount once the variation work has commenced or been completed, depending on the payment terms.
Key point: Without a formal agreement, even completed work may not attract payment, regardless of the builder’s time, effort, or costs.
Variations by Omission
When a variation results in removing or reducing work from the contract scope, it generally leads to a credit against the contract price.
This means the homeowner is entitled to a corresponding reduction in the amount payable under the contract.
Omissions may arise for various reasons, such as:
- Budget constraints requiring scope reduction.
- Design changes eliminating certain features.
- Practical considerations discovered during construction.
It is important that both parties agree on the value of the omitted work and formally document the reduction to avoid disputes about the adjusted contract price.
Key point: Not all variations increase the contract price—omissions can reduce costs, and contractors must be prepared to reflect these reductions in progress claims or final accounts.
Unauthorised or Unapproved Work
One of the most common causes of payment disputes is the variation of work undertaken without prior written approval from the homeowner.
In such cases, builders face significant risks:
- Contractual Non-Compliance: Most building contracts—and legislation regulating domestic building work—require that variations be approved in writing before work begins. Non-compliance can result in the builder losing the right to claim payment for that work.
- Homeowner Disputes: If the homeowner has not agreed to the variation, they may dispute the necessity or value of the additional work, leaving the builder unable to recover costs.
However, there are exceptions. In situations where urgent work is required—for example, to address health and safety hazards or prevent damage to the property—builders may proceed without prior written approval.
Even then, the builder must notify the homeowner and document the variation as soon as practicable.
Key point: Builders should avoid undertaking any variation work without proper approval unless it is legally justifiable under urgent circumstances.
Instances Where Homeowners Do Not Have to Pay
There are several instances where a homeowner may not have to pay for a variation. These include (inter alia):
- Variation not approved in writing.
- Superintendent or contractor oversteps authority.
- Omissions or scope reductions.
- Non-compliant variation documentation.
- Variation work performed unreasonably or without notice.
- Urgent work not adequately justified.
We will explain these in a little more detail below.
Variation Not Approved in Writing
Under the QBCC Act and all standard contract forms (AS 4000 and CIC-1), variations must be agreed upon in writing before work begins.
If the builder performs variation work without first obtaining the homeowner’s written consent, the homeowner is generally not liable to pay for that work.
Exception: The builder might attempt a quantum meruit claim, but success is not guaranteed and depends on strict legal tests (benefit to the homeowner, knowledge of the work, etc.).
Superintendent or Contractor Oversteps Authority
Payment may not be enforceable if a superintendent or contract administrator directs a variation outside their contractual authority—for example, ordering significant work without the homeowner’s approval.
Your PDF specifically highlights that even if a superintendent instructs a variation, the contract limits their authority, and exceeding it can mean the homeowner is not obligated to pay.
Omissions or Scope Reductions
If the variation involves removing or reducing work from the contract (a variation by omission), the contract price is usually reduced, not increased.
In these cases, the homeowner may even receive a credit or price deduction rather than owing additional money.
Non-Compliant Variation Documentation
Under section 41 of the QBCC Act, variation documents must:
- Be legible.
- Describe the variation.
- State the date of the request.
- Include pricing details.
- Confirm payment timing.
If the builder fails to comply with these formal requirements, the homeowner can refuse payment until a compliant variation document is provided.
Variation Work Performed Unreasonably or Without Notice
If the variation work causes unreasonable delays or cost overruns or was carried out without giving the homeowner notice of delay or price changes, as required under the contract, the homeowner may dispute or refuse payment.
Urgent Work Not Properly Justified
Even though urgent variations (to prevent damage or comply with laws) can proceed without prior written approval, the builder must:
- Prove the urgency.
- Provide written notice and variation details as soon as practicable.
If the builder cannot justify the urgency or fails to document the work properly afterward, the homeowner can lawfully refuse to pay.
Quantum Meruit Claims
If variation work is completed without a formal agreement, builders may still have a remedy through a quantum meruit claim.
Under this legal principle—meaning “as much as is deserved”—a party can seek reasonable payment for work performed where:
- The work provided a benefit to the other party.
- The original contract did not cover the work.
- It would be unjust for the other party to retain the benefit without payment.
Quantum meruit claims are complex and often require the builder to prove:
- The homeowner requested or knowingly accepted the additional work.
- There was no enforceable agreement as to the price of the extra work.
- The value of the work performed is reasonable.
While quantum meruit provides a potential safety net, it is generally seen as a remedy of last resort.
Courts may scrutinise such claims closely, especially where the builder has failed to follow proper variation procedures.
Key point: Builders should not rely on quantum meruit as a standard practice. Formal variation agreements remain the safest and most enforceable approach.
The Importance of Following Proper Procedures
For both homeowners and contractors, the key to avoiding payment disputes over variations lies in strict adherence to agreed-upon processes:
- Document Everything: Before work begins, every proposed variation should be described, costed, and approved in writing.
- Communicate Clearly: Both parties should discuss potential variations openly and in a timely manner.
- Understand the Contract: Contracts typically outline specific requirements for handling variations, including pricing, approvals, and notification timeframes.
- Avoid Assumptions: Builders should not assume they will be paid for additional work without formal approval, and homeowners should not assume that requested changes will be absorbed into the existing contract price without agreement.
By taking a disciplined, transparent approach to variations, both parties can protect their legal and financial interests while maintaining positive working relationships.
Variations in Building Contracts – Queensland Case Law
Court decisions are crucial in shaping how variations are interpreted and managed in building contracts across Queensland.
Several landmark cases provide valuable guidance on issues such as the scope of work, the validity of variations, and entitlement to payment for extra work.
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251, the main issue was whether the contractor was entitled to payment for additional work performed without written approval.
The court confirmed that contractors are generally not entitled to payment for unauthorised variation work unless the contract’s variation procedures are strictly followed.
Oral agreements or implied approvals could not override the requirement for written approval as set out in the contract.
This case is a leading authority on the importance of properly documenting and approving variations, which can prevent a contractor from recovering payment.
Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd
In Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd [1989] 2 Qd R 107, the issue was whether the contractor was entitled to claim payment under quantum meruit for work performed outside the contract scope.
The Queensland court held that a contractor may recover reasonable payment (quantum meruit) where work falls outside the original contract scope and the principal knowingly accepts and benefits from that work, even if there was no formal agreement on price.
The case established important principles regarding the right to fair compensation when extra work benefits the principal, even where contractual procedures were not strictly followed.
Wren v Emmett Contractors Pty Ltd
In Wren v Emmett Contractors Pty Ltd [1969] 1 NSWR 91, the issue was whether the contractor’s refusal to perform varied work amounted to repudiation of the contract.
The court ruled that a contractor has the right to refuse to carry out variation work that goes beyond the contractual scope unless there is a new agreement covering the changes.
Attempting to force a contractor to undertake excessive changes may itself amount to repudiation by the principal, potentially entitling the contractor to terminate the contract and seek damages.
Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd
In Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd [1995] 2 Qd R 350, the issue was the contractor’s failure to comply with written notice and procedural requirements for variations and extensions of time.
The Queensland court reinforced the critical importance of compliance with contractual procedures, especially those requiring notice of variations or delays.
Failure to comply may prevent contractors from claiming extra time or additional payment, even if the underlying claim might otherwise have merit.
This case is a common authority in Queensland for enforcing strict compliance with notice and variation procedures.
Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd
In Peninsula Balmain Pty Limited v Abigroup Contractors Pty Limited [2002] NSWCA 211, the issue was how variations should be valued when the contract does not provide applicable rates.
The court held that where a variation cannot be priced under the existing contract rates, it should be valued based on the reasonable cost of the work, including labour, materials, and a margin for overheads and profit.
This approach ensures that contractors receive fair compensation for varied work when contract pricing mechanisms do not cover the change.
While a New South Wales case, it is widely cited in Queensland pricing disputes.
Gaymark Investments Pty Ltd & Anor v Walter Construction Group Ltd
In Gaymark Investments Pty Ltd & Anor v Walter Construction Group Ltd [1999] NTSC 143, the main issue was whether a contractor was entitled to an extension of time for variations not properly assessed by the principal.
The court found that principals must act fairly and reasonably when assessing the impact of variations on the construction timeline.
If a principal unreasonably denies extensions of time that should result from variations, they may be liable for delay damages.
Although a Northern Territory case, it has been influential in Queensland disputes involving time extensions and the fair treatment of variations.
Summary of Legal Principles – Variations in Building Contracts
- Written approvals are critical – courts will not lightly excuse non-compliance.
- Superintendents/contract administrators have limited powers to approve variations.
- Quantum meruit claims are possible but require proof that the owner ordered, accepted, and benefited from the extra work.
- Failure to comply with the variation notice or pricing requirements can prevent a contractor from claiming time or money.
- Significant variations may constitute repudiation if they change the fundamental nature of the original contract.
Variations in Building Contracts (Queensland) – Key Takeaways
Variations are an almost inevitable part of construction projects, reflecting the evolving nature of design, unforeseen site conditions, and changing regulatory requirements.
However, without proactive and disciplined management, variations can quickly become a source of cost overruns, delays, and disputes.
For homeowners, understanding the variation process empowers them to make informed decisions, control costs, and ensure that changes align with their expectations and budget.
For contractors, adhering to legal and contractual requirements for variations protects against unpaid work, reputational damage, and potential litigation.
The key to success is maintaining clear documentation, seeking written approvals before undertaking additional work, and communicating openly throughout the project.
By anticipating potential changes and addressing them transparently and collaboratively, both parties can minimise risks and contribute to the timely and successful completion of the project.
A proactive approach to managing variations is not just a best practice—it is essential for preserving the financial and legal integrity of building contracts and maintaining positive, productive working relationships.
Variations in Building Contracts (Queensland) FAQ
Variations are a common but often misunderstood aspect of building contracts in Queensland.
Whether you’re a homeowner or a contractor, understanding how variations work – and their legal and financial implications – is essential to managing changes smoothly and avoiding costly disputes.
Below are answers to some of the most frequently asked questions about variations, approvals, payments, and the impact on construction projects.
What is a building contract variation in Queensland?
A building contract variation is any change to the original terms of a construction contract after it has been signed. This can include alterations to the design, materials, scope of work, quality standards, or even construction methods. Variations must be documented and approved in writing to be enforceable and may affect both the cost and completion date of the project.
Do both parties need to approve variations in building contracts?
Yes. Before any work begins, both the homeowner and the builder must agree to the variation in writing. Queensland law requires this to ensure transparency and prevent disputes. There are limited exceptions, such as urgent works to prevent damage or meet safety requirements.
Can a builder refuse a variation request?
Yes. A builder can refuse a variation request if the requested work exceeds the agreed scope, is impractical, or would cause unreasonable delays or costs. The contractor is not obligated to perform work outside the original contract without mutual agreement on the change, pricing, and time impact.
How does a variation affect the completion date?
Variations can extend the project timeline if the changes require additional work or affect the construction sequence. Builders must notify homeowners of any expected delay and agree on a new completion date. This extension must be formally documented to avoid potential liquidated damages or penalties for late completion.
What is a variation in a construction contract?
In a construction contract, a variation is a formally agreed-upon change to the scope of work, quality, design, or cost specified initially. Variations can involve additions, omissions, or substitutions and must comply with the contract’s variation procedures.
What counts as variations in building contracts?
Examples of variations include adding extra rooms, upgrading fixtures, changing materials, omitting planned works, or substituting specified products with alternatives. Even seemingly small changes can count as variations if they differ from the original contract documents or scope of work.
What is an example of a variation?
A common variation example is when a homeowner decides to upgrade from standard kitchen benchtops to high-end stone mid-project. This change affects both the materials and potentially the project timeline, requiring formal approval and adjustment to the contract price.
What is the purpose of variations?
Variations allow flexibility in building projects. They enable homeowners to adjust designs or specifications as needs or preferences change and allow builders to address unforeseen site conditions or regulatory changes that may arise after the contract has been signed.
Do all variations increase the contract price?
No. While many variations increase costs, some reduce the contract price, for example, when the homeowner omits certain works or chooses less expensive materials. Each variation’s pricing impact must be clearly documented and agreed upon by both parties.
Can a builder carry out variations in building contracts without approval?
Generally, no. Variation work should not commence without prior written approval. The only exception is for urgent works required to prevent injury, damage, or legal non-compliance, in which case, written confirmation must follow as soon as possible.
What happens if variation work is done without written approval?
If variation work is performed without written approval, the builder may not be entitled to payment under the contract. However, in some cases, they may seek compensation through a quantum meruit claim, though success depends on proving the homeowner accepted or benefited from the work.
How are variation costs calculated?
Variation costs typically include direct labour and material expenses, plus indirect costs like project management, subcontractor fees, and potential delays. Builders must provide detailed cost breakdowns, and homeowners can request clarification or independent advice if needed.
Can variations lead to disputes?
Yes. Disputes often arise over whether specific work constitutes a variation, the cost of variations, or their impact on timelines. Proper documentation, clear communication, and compliance with variation procedures minimise the risk of disputes.
What if the variation causes significant delays?
If a variation causes significant delays, the builder must formally notify the homeowner and propose a revised completion date. If agreed, this becomes the new contractual deadline. Failure to document the delay can lead to penalties or liquidated damages claims.
Are there legal protections for homeowners?
Yes. Queensland law, including the QBCC Act, requires that variations be documented and approved in writing to protect homeowners from unauthorised changes and unexpected costs. The QBCC also provides dispute resolution services if disagreements occur.
What is the role of the superintendent in variations?
In some contracts, a superintendent can instruct or approve variations, but their authority is limited to the powers granted by the contract. If they overstep these powers, the builder may not be entitled to payment for unauthorised work.
Is a builder always entitled to payment for variations in building contracts?
No, a builder is not automatically entitled to payment for all variation work. Payment is generally only enforceable if the variation has been formally documented and approved by both the homeowner and the builder before the work begins. If a builder proceeds without written approval, they may not be entitled to recover costs unless the work was urgently necessary or qualifies for compensation under a quantum meruit claim, which can be difficult to establish.
Can a builder claim payment for unauthorised variations in building contracts?
In most cases, no. If a builder undertakes variation work without the homeowner’s written consent, they risk being unable to claim payment. However, there are limited exceptions. If the work was urgently required to prevent harm or property damage, or if the homeowner knowingly accepted and benefited from the unauthorised work, the builder may have a basis to seek payment. However, success depends on the specific circumstances and may require legal action.
What if the homeowner benefits from unapproved variation work?
Suppose the homeowner knowingly accepts and benefits from unapproved variation work. In that case, the builder may be entitled to reasonable payment under a legal principle called quantum meruit (“as much as is deserved”). However, this is not guaranteed. The builder must prove that the work was beyond the original contract scope, benefited the homeowner, and that it would be unjust for the homeowner to retain the benefit without paying. Courts scrutinise these claims closely, especially where builders failed to follow required variation procedures.
