Variation: Overview, definition, and example
What is variation?
Variation refers to a formal change, amendment, or modification to the terms of a contract or agreement. Variations may involve altering specific provisions, extending timelines, adjusting obligations, or revising financial terms. These changes are typically documented in writing and require the consent of all parties to remain enforceable.
For example, in a construction contract, a variation might involve changing the scope of work, such as adding a new feature or altering project specifications, often accompanied by a corresponding adjustment in price or timeline.
Why is variation important?
Variation is important because it provides a structured way to adapt agreements to changing circumstances while maintaining clarity and mutual consent. It allows parties to accommodate new requirements, unforeseen events, or updated objectives without breaching the original contract.
For businesses, clearly defined variation clauses ensure that changes are managed transparently, reduce the risk of disputes, and provide a legal framework for modifying agreements when necessary.
Understanding variation through an example
Imagine a company hires a contractor to build a warehouse, but mid-project, the company decides to add an additional storage wing. A variation to the original contract is agreed upon, documenting the new scope of work, extended deadlines, and adjusted costs. This ensures that both parties understand and agree to the updated terms.
In another example, a software development agreement includes a variation clause allowing the client to request changes to the project requirements. Each change must be documented, agreed upon, and may include adjustments to the delivery schedule and cost.
An example of a variation clause
Here’s how a variation clause might look in a contract:
“No variation to this Agreement shall be effective unless it is in writing and signed by authorized representatives of all Parties. Any agreed-upon variation may include adjustments to the scope, timeline, or cost as necessary to reflect the changes.”
Conclusion
Variation allows contracts to remain flexible and responsive to changing needs while maintaining legal integrity and clarity. It provides a structured way to make adjustments without breaching the original terms of the agreement.
By including a variation clause in agreements, businesses can manage changes transparently, protect their interests, and ensure that all parties remain aligned and accountable throughout the contractual relationship.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.