For developers and commercial clients
Variations in Construction Contracts: How Prices Grow After You Sign
Sviatoslav JerdetchiiCEO & Founder of Craftex. Updated , 6 min read
The short answer
A variation is any change to the work, or to how it is done, after the construction contract is signed. It is where competition stops, so it is where prices grow.
- Only your contractor prices a variation, and it often brings extra time and site costs with it.
- Valuation follows the contract: its rates, fair rates, daywork or an agreed quotation.
- Instruct every change in writing and agree price and time before the work starts.
- Keep a variation register so the final account holds no surprises.
Most budgets don't break at tender. They break slowly, one change at a time, after the contract is signed. Those changes are called variations. On many projects they decide the final price more than the tender did.
This guide explains variations in construction contracts from the builder's side of the table. We price variations on our own London jobs too. So we will tell you honestly why they cost more, and how to keep them under control. Want a builder who prices every change before the work starts? Book a site visit.
This is general information for England and Wales, not legal advice. Your contract decides the detail.
What counts as a variation in a construction contract
A variation is a change to the work described in the contract, made after signing. It can also be a change to how or when the work is done. JCT design and build contracts call these Changes.
- Adding work. An extra bathroom, more sockets, a new partition.
- Omitting work. Taking something out, which should reduce the price.
- Changing work. A different floor finish, a bigger window, a new layout.
- Changing conditions. Different working hours, restricted access or a new sequence.
Some things are not variations. Work the contractor should have priced is its own risk. That includes work shown on the drawings it signed up to, and normal site costs it chose to leave out. Defects it must fix at its own cost are not variations either.
Why variations cost more than the same work in the tender
At tender, your contractor priced against several rivals. Every line was sharpened to win. After you sign, that competition is gone. The contractor is now the only firm pricing your change.
That is not sinister in itself. A change mid-job disrupts the work around it. Materials are re-ordered, trades come back, and the sequence shifts. The contractor carries that disruption, and prices it.
But there is a harder truth too. If a tender was cut to win, the margin is often made back on variations. Our guide to builder overcharging explains how that works. The fix is not to avoid changes. It is to price them before the work, with a process.
How variations are valued
The contract sets the rules. Under most UK standard forms, valuation follows a familiar order.
- Contract rates. If the change is like work already priced, the contract's own rates apply.
- Fair rates. If it is similar but not the same, rates are adjusted from the contract ones.
- Fair valuation. If nothing in the contract is comparable, a fair price is built from scratch.
- Daywork. Where work cannot be measured, it is paid as time and materials, with agreed percentages on top.
- Agreed quotation. The contractor quotes for the change, and you accept it before the work starts.
On a JCT design and build contract, changes are valued using the Contract Sum Analysis where it applies. That is why a detailed breakdown at tender matters. It is your best protection when a change is priced. Our guide to the JCT Design and Build Contract explains the documents.
Time and preliminaries: the hidden half
A variation has two prices. One is the work itself. The other is the time it adds, and the cost of keeping the site running for that time.
Site costs are called preliminaries. They include management, welfare, scaffold, plant hire and insurance. If a change adds two weeks to the job, two weeks of preliminaries come with it. On a busy London site, that can cost more than the change.
Say you move a kitchen island late in the job. The new plumbing, electrics and floor cost £12,000. It also delays the finishes by three weeks. At £8,000 a week of site costs, that adds £24,000. With a share of overheads, the change costs around £40,000, not £12,000.
So always ask two questions about any change. What does the work cost? And what does it do to the programme?
A simple variation process
Every variation should go through the same five steps. It works on a £150,000 refurbishment and on a £15M development.
With us, a variation is only agreed in writing, and it is priced before the work is done. That is the rule we work to on our own projects. One client wrote in a Google review:
"Super flexible at dealing with evolving requirements and fast deployment and execution."
- Request. You, or your agent, describe the change in writing, with drawings if needed.
- Quote. The contractor prices the work and states the effect on time and site costs.
- Agree. You accept, reject or negotiate the price and time, in writing, before work starts.
- Instruct. A written instruction confirms the change, with a number and the agreed figures.
- Record. The change goes into the variation register, and the contract sum is updated.
On a design and build contract, the client side is usually run by an employer's agent. They issue instructions and agree valuations on your behalf.
Urgent changes happen. If the work must start before the price is agreed, instruct it in writing anyway. Ask for the quote within a set number of days, and cap it if you can.
The variation register
A variation register is one list of every change on the job. It stops the final account becoming a surprise. Keep it shared, and update it every week.
| No. | Change | Requested by | Price agreed | Time agreed | Status |
|---|---|---|---|---|---|
| V01 | Extra power to meeting rooms | Client | £3,200 | 0 days | Instructed |
| V02 | Omit feature wall panelling | Client | −£6,500 | 0 days | Instructed |
| V03 | Upgraded glazing to front | Designer | £14,800 | 5 days | Quoted, awaiting decision |
| V04 | Remove hidden asbestos | Site find | Daywork | 3 days | Instructed, being valued |
Look at the net total every week, not just each change. Small changes add up faster than people expect. Our guide to construction project management on time and on budget covers cost reporting in more detail.
Disputes over variations
Most variation disputes come down to three questions. Was the change instructed? Was it really extra to the contract? And is the price fair?
Records answer all three. Written instructions, signed daywork sheets, the register and photos of the work before and after. Whoever has the better records usually wins the argument.
Commercial contracts also run on payment deadlines. Under the Construction Act, a payer who wants to pay less than the sum claimed must send a pay less notice in time. Miss it, and you may have to pay the claim first and argue later. Our guide to the construction adjudication process explains the fast route for disputes.
Design and build: who carries design changes
On a design and build contract, the contractor completes the design. So who pays when the design changes?
- The contractor's own design development is normally its risk. Turning your requirements into working drawings is part of its job.
- A change to your requirements is a variation. You asked for something different, so you pay for it.
- The grey zone is where your requirements were vague. That is where most arguments start.
The protection is clear Employer's Requirements at tender. Every vague line becomes a future variation.
We recently worked with Craftex and honestly couldn’t be happier with the results. From start to finish, the team was professional, reliable, and highly skilled. The quality of workmanship exceeded our expectations, and everything was completed on time and to a very high standard. Communication throughout the project was excellent, and they always went above and beyond to make sure we were satisfied. It’s rare to find a construction company that combines professionalism, attention to detail, and great customer service so well. Without a doubt, Craftex is one of the best construction companies we have ever worked with. Highly recommended to anyone looking for quality and trustworthy builders.
How to keep variations under control
You will change your mind on some things. Everyone does. The aim is not zero variations. It is no surprises.
- Finish as much design as you can before you sign.
- Ask for a detailed price breakdown at tender, so changes can be valued against it.
- Agree price and time in writing before any change starts.
- Keep a contingency for your own changes, separate from the build budget.
- Review the variation register with your contractor every week.
Planning a project and want every change priced before the work starts? Book a site visit.
