Mastering Construction Contracts: Nine Essential Tips for Managing Variations
- Jinoy Viswan
- Sep 20
- 4 min read
Every project begins with certainty: a scope, a schedule, and a price. Yet no construction project travels a straight line. Drawings change. Specifications shift. Conditions differ. What was once a fixed boundary becomes fluid. In that moment, variations are born.
For some contractors, variations are dismissed as routine paperwork. For others, they are recognised for what they truly are contractual events with the power to reshape entitlement, cash flow, and even project viability. The difference between those two approaches is the difference between disputes and resolution, between profit and loss.
Variation management is not about raising claims after the fact. It is about disciplined compliance with contract mechanisms, backed by evidence and fortified by legal principle.
The successful management of variations requires more than recording work performed. It demands a structured approach: aligning with the contract, maintaining contemporaneous records, and proving impact. Based on decades of EPC and infrastructure dispute practice, nine essential steps consistently determine whether variation claims succeed or fail.
1. Understand the Contract for variation clauses
The variation clause is the anchor. Every standard form, FIDIC, NEC, JCT or bespoke EPC agreement defines variations differently. Some permit oral instructions confirmed in writing. Others require formal change orders before execution.
Contractors must study:
The variation clause itself (scope, approval, valuation).
Specifications, drawings, and BOQ items to establish the original scope baseline.
Conditions for valuation: Are works to be valued at contract rates, or only on actual cost?
Entitlement begins and ends with what the contract allows.
2. Document Everything
A variation not recorded is a variation lost.
Instructions, RFIs, meeting minutes, emails, and photographs provide contemporaneous proof.
Tribunals will not infer entitlement. They will demand evidence that a variation was instructed, executed, and measured. Documentation is not supportive—it is decisive.
3. Timely Notification
Notice is not courtesy, it is a condition precedent.
Most forms require notification within 14 to 28 days. Failure to notify extinguishes entitlement even if the work was done.
Contractors must issue notices as soon as variations arise. Delay opens the door for employers to argue waiver, forfeiture, or estoppel.
4. Accurate Cost Estimation
Variation valuation depends on precision.
Submissions must rely on:
BOQ rates where applicable.
Star rates built up logically where no BOQ item exists.
Actual cost records (plant, labour, materials) where contract prescribes.
Accuracy accelerates approval. Unsupported figures invite dispute.
5. Impact Analysis
Variations affect not only cost but also time.
Contractors must analyse:
Programme impacts: does the variation delay critical path activities?
Resource impacts: does it demand new crews or equipment?
Commercial impacts: does extended duration trigger prolongation costs?
Entitlement to additional time or money depends on demonstrating that a variation affected project delivery, not just scope.
6. Regular Communication
Employers often challenge whether a variation is genuine, necessary, or compensable. Silence breeds mistrust.
Regular updates, progress reports, cost impacts, programme revisions maintain transparency and reduce conflict. Communication is both defensive and persuasive.
7. Mitigation Impacts
Employers expect contractors to mitigate disruption.
Evidence of mitigation, resequencing, acceleration, procurement adjustments strengthens credibility.
Tribunals consistently scrutinise whether a contractor acted reasonably to reduce impact. A claim without mitigation is vulnerable to reduction.
8. Seek Expert Advice
Complex variations often require coordination between technical and legal teams.
External experts can ensure valuation methods are robust, entitlement is well-founded, and procedures are compliant.
In high-value disputes, expert testimony is often decisive. Contractors who integrate expert input from the outset present claims that withstand tribunal challenge.
9. Review and Learn
Variation management should not stop when the project ends.
Reviewing how variations were handled, where notices failed, records lacked, or analysis was weak builds institutional resilience.
Continuous improvement transforms variation management from reactive administration to strategic entitlement protection.
Case Law Insight: Henry Boot Construction Ltd v. Alstom Combined Cycles Ltd (2000)- Variations
In Henry Boot v Alstom [2000] EWCA Civ 99, the Court of Appeal confirmed that contract rates in the Bill of Quantities remain binding even if they prove disproportionately profitable or loss-making. Rates cannot be disregarded simply because they produce unexpected results.
Departure from BOQ rates is permitted only if:
The variation work is of dissimilar character or conditions, or
There is a substantial change in quantities such that the rate no longer applies.
This ruling underscores a critical lesson: valuation of variations is not about “fairness” in the everyday sense. It is about applying the contract’s mechanisms strictly. Contractors who attempt to renegotiate rates without contractual justification fail. Employers who disregard agreed rates because they dislike the outcome also fail.
The case remains a cornerstone authority on variation valuation, reinforcing why contractors must root submissions in contract terms rather than commercial expediency.
Tailpiece
Variations are not paperwork.
They are turning points. Managed casually, they erode margins and spark disputes. Managed rigorously anchored in clauses, supported by evidence, and analysed for impact they become enforceable entitlements.
The contractors who succeed are not those who avoid variations, but those who master them. They understand the contract, notify promptly, value accurately, and mitigate credibly. They turn employer changes into structured submissions that withstand challenge.
Because in construction, variations are inevitable. But disputes are not.
Comments