Variations
| Author | Julian Bailey |
| Pages | 659-691 |
659
CHAPTER 7
VARIATIONS
Introduction 660
Varied work 661
(i) Generally 661
(ii) Dierent quantities 662
(iii) Alternative materials 663
(iv) Instruction to correct defective works 664
(v) Instruction to change work methods 664
(vi) Instruction to comply with legislative requirements 665
(vii) Extensions of time, acceleration and disruption 665
(viii) Concessions and interim payments 666
Variation instruction 666
(i) Need for express power to instruct variations 666
(ii) Express power to instruct variations 667
(iii) Request by contractor for variation instruction/requirement to issue a
variation instruction 668
(iv) Timing of instruction 669
(v) Form of variation instruction 669
(vi) Submission of quotation for work by contractor 669
Limits of the power to direct variations 670
(i) General scope of the variations power 670
(ii) Increases in the volume of work 671
(iii) Omissions 672
(iv) Instruction beyond scope of variations power 675
(v) No power to instruct variations after practical completion 676
(vi) Variation preventing completion of work within time allowed by
contract 676
Variations where contract formalities are not followed 677
(i) Introduction 677
(ii) Need for a written instruction 678
(iii) No consequence if notication not given 679
(iv) Absence of written variation instruction no bar to recovery 680
(v) Disagreement over whether work is a variation 683
(vi) Work outside of the contract 683
Mutual abandonment 683
Valuation of variations 684
(i) Generally 684
(ii) e application of contract rates and prices 685
(iii) Cost or cost plus 687
VARIATIONS
660
(iv) Omissions 687
(v) No applicable mechanism for valuation 688
(vi) Non-contractual work 688
(vii) Payment 689
Variations and insurance 689
Variation of contractual terms 689
Introduction
7.01 e term “variation”1 refers to work performed by a contractor, or omitted from
its scope of works, usually at the express direction of the contract administrator (acting
on behalf of the owner) pursuant to a contractual power, where the instructed work is
dierent to that which was in the original scope of works, or it represents an omission of
work that the contractor was otherwise required to perform.2 A variation may also occur
where a contractor is lawfully directed to change its manner of work, or to resequence
its work, which may occur, for example, where a contractor is instructed to perform its
work in a manner dierent to that indicated in a work method statement that forms
part of the contract.3 A variation may also arise where a contractor is lawfully instructed
to suspend its work for a period of time. e circumstances in which a variation may be
instructed are manifold.
7.02 e use of variations provisions in construction and engineering contracts is both
longstanding and usually essential to the successful completion of any given project.
Changes to the works may be required or desired for all sorts of reasons, and construc-
tion and engineering contracts use variations clauses to provide contractual exibility, so
as to ensure not only that there is a mechanism that permits changes to be made to the
works, but that there will be an appropriate adjustment (if any) to the respective rights
and obligations of the contracting parties to reect the changes made. As Bingham LJ
observed in one case:
“I do not, however, think that there is any class of contract in which the content of … funda-
mental terms is potentially as uid as in the familiar forms of building and civil engineering
contract. ese contain terms which enable the contractor’s work to be increased, decreased or
varied, perhaps substantially, the period for performance to be extended, again substantially,
and the contract price to be recalculated, upwards or downwards, in the light of events during
the currency of the contract.”4
1 Sometimes also referred to as an “alteration”, “addition”, “extra” or “change to the works”. In the US, variations
are referred to as “changes”.
2 Rotol Projects Pte Ltd v CCM Industrial Pte Ltd [2014] SGHC 72 at [10]–[11], per Quentin Loh J.
3 Yorkshire Water Authority v Sir Alfred McAlpine & Son (Northern) Ltd (1985) 32 BLR 114. Where a contractor
seeks to make a claim founded on a direction to resequence its works, it will usually be insucient, for pleading
purposes, for the contractor simply to refer to the instruction itself. e contractor must identify the original
work sequence, and how the instruction given required a change to that sequence: see Downer Connect Pty Ltd
v McConnell Dowell Constructors (Aust) Pty Ltd [2008] VSC 77 at [30]–[31], per Harper J. See also De Grazia v
Solomon [2010] NSWSC 322 at [67]–[68], per Einstein J (considering the SBW2 form).
4 Ashville Investments Ltd v Elmer Contractors Ltd [1989] 1 QB 488 at 507. See also Bingham, “Keynote address to
the 1996 conference – new challenges in construction law” in U and de Zylva (eds), New Horizons in Construction
VARIATIONS
661
Varied work
(i) Generally
7.03 e question of whether work that a contractor is instructed to perform amounts to
a variation, or simply a direction that the contractor perform work that it was previously
required to undertake, necessarily involves a comparison between what the contractor
was required to do (and how it was required or permitted to go about doing it), and what
it is being instructed to do. e making of such a comparison involves consideration of
what the contractor’s original work scope is under the terms of the relevant construction
contract.5 In this regard, it is important to distinguish between work that the contractor
has undertaken to perform, even if it is not specied but is necessary for the proper per-
formance by it of the contract, and work that the contractor has not agreed to perform,
unless a variation instruction is issued. us, in Jackson v Eastbourne Local Board,6 where
a contractor had undertaken to build a sea wall, the Earl of Selborne held:
“[I]t is for [the contractor], undertaking that obligation [scil, to construct the sea wall], which
he is the only judge of before he undertakes it, to satisfy himself that he can full and perform
it. Whatever is possible and necessary for the fullment and performance of it by him, he must
do. If it be a specied work, of course, then, it is part of the contract to do that specied work.
If it is required as an additional work, he will get paid for it; but if it is neither a specied work
nor an additional work, yet it be the sine qua non to the performance by him of the contract,
as he binds himself absolutely to perform the contract he must use, for his own protection and
on his own account, and not as a specic obligation due to the other party, the proper means,
whatever they are, of enabling him to perform the contract.”7
7.04 It can therefore be seen that the essential feature of a variation is that it requires
the contractor to do something dierent from what it is otherwise required to do by
the relevant contract. An instruction to a contractor to perform work that it was already
obliged to perform will thus not constitute a variation instruction.8 Nor does the fact
that the work that a contractor has agreed to perform turns out to be more dicult or
expensive than the contractor anticipated give rise to a variation of the work.9
Law (Construction Law Press, 1998) page 2; VK Holdings (HK) Ltd v Panasonic Eco Solutions (Hong Kong) Co Ltd
[2014] HKCFI 2358 at [26], per Mimmie Chan J.
5 e concept of a variation is of little or no relevance where work is performed on a non-contractual basis. In
such cases, the entitlement of the contractor is to be paid a quantum meruit for the work which it was requested to
perform, regardless of whether that work formed part of some initial scope of works, or it was requested during the
course of the project: Serck Controls Ltd v Drake & Scull Engineering Ltd (2000) 73 Con LR 100 at 105–106 [18],
per HHJ Hicks QC; Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141 at [41]–[44] ([2009] BLR 468).
6 (1886) Hudson’s BC (4th edition, volume 2) 81.
7 (1886) Hudson’s BC (4th edition, volume 2) 81 at 89–90. See also WI Bishop Ltd v James Maclaren Co [1937] 2
DLR 625 (PC), and compare Morrison’s Associated Companies Ltd v James Rome & Sons Ltd 1964 SC 160.
8 Simplex Concrete Piles Ltd v Borough of St Pancras (1958) 14 BLR 80 at 98, per Edmund Davies J; Martifer UK Ltd
v Lend Lease Construction (EMEA) Ltd [2016] CSOH 98 at [20]–[25], per Lord Tyre. If instructed work is already
within the contractor’s scope of works, there will be no variation that may entitle the contractor to additional
payment. Nor, in such a case, will the contractor be entitled to payment for the work on a non-contractual quantum
meruit basis: CMA Assets Pty Ltd v John Holland Pty Ltd [No 6] [2015] WASC 217 at [251], per Allanson J.
9 C Bryant & Son Ltd v Birmingham Hospital Saturday Fund [1938] 1 All ER 503 at 503, per Lewis J.
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