A variation is a change to the works instructed under the contract, such as an addition, omission or alteration to the design, quality or quantity of work, together with the financial adjustment that results from it.
Under JCT contracts, variations are generally valued using the contract rates where the work is of a similar character, fair rates derived from them where it is not, or daywork where the work cannot properly be measured. Loss and expense caused by disruption is dealt with under separate provisions. NEC contracts do not use the term variation: an instruction changing the Scope is a compensation event, assessed on its effect on Defined Cost plus Fee and on the Completion Date. Good practice includes:
- making sure every variation is properly instructed in writing
- recording each change in a variation account
Related terms: variation order, variation account, compensation event, daywork.
