Variations

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Variations are frequently the cause of disputes, particularly where there is inadequate documentation to support them. There are provisions in the DBCA to help prevent these disputes.

There Must be a Written Variation Document

You must put any variations in writing as soon as practicable and, if the variation means additional work, it is to be put in writing and signed by the parties before the variation work is carried out. You must give the homeowner a copy of this document as soon as practicable but within five business days from when the document is signed.

A variation does not have to be in writing if the work is required urgently and it is not reasonably practicable to produce a variation document before commencing work.

Format
The DBCA stipulates that the variation document must:
• Be in English and legible
• Describe the variation
• State the reason for the variation (if the variation is being sought by the contractor)
• Provide a reasonable estimate of any delay to the work which may result from implementing the variation
• State any change to the contract price due to the variation, or at least set out the method for calculating the price change
• Give the date when any increase in the price as a result of the variation is to be paid or give the date when any decrease is to be taken into account. For example, if the price is decreased due to the variation, the variation document must indicate which progress payment is to be decreased as a result, and
• Be signed by the contractor. The contractor must also take reasonable steps to have the homeowner sign the document. If the homeowner does not understand it, the contractor should clarify the document in writing or provide further information in writing

NOTE: Where a variation results in an increase in price, you cannot require the additional payment until the homeowner has initialled the variation document and you have started to carry out the variation.

When the Contractor Requests a Variation

If you ask the homeowner to agree to a variation and it involves additional work, the homeowner is only liable to pay for that extra work if you could not reasonably have foreseen it at the time of contracting.

In any case, you must still provide the written documentation as detailed above and must not demand payment before the work is commenced.