When delivering commercial or construction projects, unexpected changes to scope or timing are almost inevitable. Understanding how to manage and submit variation claims properly can be the difference between maintaining profitability and absorbing unrecoverable costs.
This article, written by our contract lawyers, outlines the essential legal steps and practical tips for preparing variation claims under Australian contract law.
Key Takeaways
Comply strictly with your contract’s variation provisions
Record all changes in writing and act within agreed timeframes
Understand how your actions may affect entitlements
Approach disputes with a strategic mindset
Seek legal advice for complex or high-value variations
What is a Variation Claim?
A variation claim is a formal request to amend the terms of an existing contract, usually involving changes to the scope of work, cost, timeline, or methodology. In Australia, these claims are common in construction and service contracts where unforeseen changes impact project delivery.
Step-by-Step Guide to Making a Variation Claim
Review the Contract in Detail
Start by carefully reviewing your contract’s variation clause. Most contracts should specify:
Scope of Works: What is and isn’t included in the agreed work
Variation Procedures: Notice periods, required forms, and approval steps
Valuation Methods: How changes will be priced—by agreement, schedule of rates, or cost-plus
Time Bars: Deadlines for notifying or claiming variations
Failure to follow these clauses can legally bar you from making a successful claim.
Document the Variations
Even where a contract allows verbal instructions, it’s best practice to:
Confirm variations in writing (emails, change notices, variation orders)
Maintain detailed records, including drawings, costs, and correspondence
Keep dated logs and site records to support your position
Courts and adjudicators in Australia place significant weight on written documentation in disputes.
Consider Your Role in the Change
Many contracts include exclusion clauses where the contractor’s own delay, error, or omission voids variation entitlements. Be honest in evaluating whether your own actions may have contributed to the variation.
Understand the Client's Position
Clients under tight budgets or fixed timelines may resist variations. Tailor your communication style and evidence accordingly.
For ongoing or future work, consider negotiating rather than escalating. A collaborative approach may preserve goodwill and long-term value.
What If a Variation Is Rejected?
Continue Work Under Protest
If your variation claim is rejected but you believe you are contractually entitled, you may consider continuing the work under protest. However, this approach carries legal and financial risks and should only be taken after reviewing your contract terms and, ideally, obtaining legal advice.
If proceeding, ensure your disagreement is clearly documented in writing (e.g. via email or formal site instructions). This may help preserve your legal position for later dispute resolution, depending on the terms of your contract.
Open Negotiation Channels
Before escalating the matter, attempt to resolve the dispute through informal negotiation. Provide clear supporting evidence (such as emails, site instructions, and cost breakdowns) to strengthen your position and encourage compromise.
Consider Legal Advice
For disputes involving substantial amounts or legal complexity, consider seeking advice from a commercial contract lawyer. They can help you assess your legal position and prepare your claim for formal resolution processes, such as adjudication, mediation, or litigation under relevant legislation (e.g. Building Industry Fairness (Security of Payment) Act 2017, where applicable).
Learn more about the Security of Payments Act in our article.
Tips for Successful Variation Claims
Here are some tips to help obtain a successful variation claim:
Follow the contract’s procedures to the letter
Document every variation and response
Keep communication clear and professional
Don’t delay—notify and claim within required timeframes
Involve a lawyer early if issues arise
Frequently Asked Questions (FAQs)
What qualifies as a variation in a contract?
A variation is any agreed change to the original contract terms—scope, timing, methodology, or price.
Learn more about how we can help with your constructions contracts.
Do variation claims have to be in writing?
Not always, but written documentation is strongly recommended and often required under contract.
What if I miss the deadline for notifying a variation?
You may lose the right to claim the variation. Courts in Australia generally enforce strict compliance with contractual time bars.
Can I stop work if a variation is rejected?
Only if the contract allows. Otherwise, stopping work may amount to repudiation of the contract, exposing you to liability.
When should I seek legal advice on variation claims?
It’s recommended to seek legal guidance for complex claims, disputes, or if you anticipate difficulty with your client
