A contract for the execution of work confers on the contractor not only the duty to carry out the work but the corresponding right to be able to complete the work which it contracted to carry out… contracts contain provisions to enable the employer to vary the work in order to achieve lawfully what could be achieved without breaking the contract or by a separate further agreement with the contractor
Most construction contracts contain mechanisms and procedures allowing the scope of the project to change: by adding more work, changing or substituting works and/or reducing the scope of the works. During my workshop with Contract Administrators this week, it became apparent that there are some strong myths about variations that do not reflect current standard forms or the law.
Top 5 Variation Myths
The truth about variations is explained from the perspective of the contract administrator.
Myth 1: I can issue variations even if the contract does not include a procedure or right to do so.
Answer 1: If there is no variation clause in the contract, neither partner has any right to change the project – each partner is only obliged to complete the obligations as originally described and can refuse to do anything else! (Abbey v PP 2003)
Myth 2: I can order the contractor to omit works that we both agree are no longer needed.
Answer 2: You can only omit works if the definition of a variation in your contract expressly includes reducing the scope of work (SWI v P&I Data).
Myth 3: I can order the contractor to omit works to give them to a cheaper/better/quicker/more competent rival.
Answer 3: A variations clause can only be used to omit works that are no longer needed. Omitting works to pass them to another contract is not allowed (Amec v Cadmus 1997) as it smacks of terminating the contract without a proper reason (termination for convenience).
Myth 4: I can order works outside the scope of the original project using the variation procedure.
Answer 4: Works which are ‘so peculiar so unexpected and so different from what [the parties] reckoned or calculated on’ are not a variation (Thorn v London 1876)
Myth 5: I can order works which change the character of the contract using the variation procedure.
Answer 5: If the new works are of a different nature, then you need a new contract eg a dredging contract cannot be varied to include building a marina (Costain v Zanen 1996).
Under some standard form contracts, like MF/1, a contract administrator is limited in the total value of variations she can order, precisely to prevent the misuse of the variation mechanism. Whilst it is intended to minimise the need for a new contract for every change to the intended works, it is not a panacea!
Quote: Abbey Developments Ltd v PP Brickwork Ltd  EWHC 1987 (TCC).