Documenting disputed variations

Resources · Practical guide

A variation dispute usually involves more than whether extra work was performed. The preparation needs to explain what changed, why payment is claimed under the contract, who directed or requested the change and how the amount was calculated.

Identify the original scope

Start with the executed contract, scope documents, drawings, specifications, schedules and relevant exclusions. Record the document revisions that formed the agreed scope. Then identify the later instruction, drawing revision or site requirement said to have changed it.

Place the original requirement and the changed requirement side by side in the working file. A description such as “additional works” is difficult to assess unless the difference is explained. State the location, trade, activity and quantity affected.

Trace the instruction

Collect the instruction itself and the surrounding correspondence. This may include an email, site instruction, request for information response, meeting record or marked-up drawing. Record who issued it, their role, when it was received and what was done in response.

Where an instruction was verbal, identify who heard it and look for contemporaneous confirmation, diary entries, messages or later acknowledgment. Do not present a later recollection as a written instruction. The preparation should accurately distinguish the different forms of evidence.

Check the contract procedure

Identify the provisions dealing with variations, directions, notices, quotations and valuation. Assemble the notices actually given and evidence of delivery. If the parties dealt with a change outside the stated procedure, collect the full correspondence showing those dealings.

Do not assume that every requested change is payable, or that the absence of a signed variation automatically resolves the dispute. The claim needs to address the contract and the established facts. This guide is a method of organising those facts, rather than a conclusion about entitlement in a particular matter.

Explain the value

Show the calculation in a form that can be checked. Identify the quantities, rates, labour hours, plant, materials and any margin relied on. State where each rate comes from: an agreed quotation, a contract schedule or another valuation basis that needs to be explained.

Account for omitted or replaced work as well as additions. Check whether the same labour, material or quantity has already been included in the original scope, another variation or a previous claim. Keep GST treatment consistent throughout the calculation.

Use a consistent variation register

Give each variation one reference number and use it throughout the claim and supporting documents. Record the description, instruction date, notice date, amount claimed, amount assessed, payments and remaining dispute. Preserve the history where an assessment has changed.

For each disputed variation, finish with a short explanation linking the scope change, contractual basis and calculation to the supporting records. If the other party has given a reason for rejecting or reducing the item, address that reason directly.

Prepare the wider payment claim

A variation register must reconcile with the payment claim as a whole. Our guide to reconciling a payment claim explains how to bring contract work, variations, payments and credits together. See also preparing evidence for adjudication.