Variation claims are the single most common source of payment disputes in Australian construction. A subcontractor performs work that falls outside the original scope, issues a variation claim, and the head contractor or principal disputes the amount — or disputes that the variation was instructed at all. The outcome of that dispute depends substantially on the documentation created at the time the variation was performed.
What constitutes a valid variation claim
Most construction contracts define what constitutes a valid variation instruction. Under the AS 4000 and AS 2124 standard form contracts, a variation instruction must be in writing (issued by the superintendent or principal) to be formally valid. Many contracts also contain "no variation without written instruction" clauses that purport to exclude verbal variation claims entirely.
In practice, many variations are instructed verbally on site — a site manager says "do it, we'll sort the paperwork later." The problem arises when the paperwork never arrives. A subcontractor who performs work on a verbal instruction, without contemporaneous documentation, faces a harder recovery than one who documents the instruction immediately.
Documentation in the moment
When a variation is instructed verbally, take the following steps immediately:
- Send a written confirmation email or text to the instructing party, describing the work instructed and the basis on which it will be priced, and requesting written approval.
- Photograph the work and the site conditions before, during, and after the variation work.
- Record the labour and materials used specifically for the variation work, separately from the base contract work.
- Note the date, time, and identity of the person who gave the instruction.
If the instructing party does not respond to your written confirmation within 24-48 hours, send a follow-up noting that silence will be taken as confirmation. This creates a record that the other party had the opportunity to dispute the instruction and did not.
Pricing and submission
Variation claims should be submitted promptly — many contracts specify timeframes within which variation claims must be submitted (commonly 14 or 28 days after the variation is performed). Missing these timeframes can result in the claim being time-barred, even if the work was indisputably performed. Submit claims with supporting documentation: the instruction (written or reconstructed from contemporaneous records), a breakdown of labour and materials, and photographs.
Security of Payment as a recovery tool
Unpaid variations can be claimed as progress payments under the Security of Payment legislation applicable in each state. A payment claim under the relevant Act must identify the work performed (including variations) and the amount claimed. If the respondent provides a payment schedule disputing the variation, adjudication is available as a fast-track resolution mechanism.
Contact Merion if you have unpaid variation claims — we work with construction payment specialists and can advise on the most effective recovery pathway.