Contract variation

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Contract variation
  • When is a contract variation appropriate?
  • What is a contract variation?
  • Variation v rescission
  • Variation v novation
  • Variation v assignment
  • What are the methods of varying a contract?
  • Written variation
  • Variation provisions in existing contract
  • Consideration
  • More...

Contract variation

This Practice Note summarises the law, guidance and practice relating to the variation of contracts and deeds. It explains how a contract or deed can be varied in writing, orally or by conduct, and also considers unilateral variation, waiver and sustained minor breach. It sets out practical and drafting considerations, and issues to consider when varying business-to-consumer contracts, public contracts and third party guarantees. It also considers third party rights on variation.

When is a contract variation appropriate?

It is a commercial reality that parties doing business together do not simply enter into self-contained discrete contracts with each other but engage in a business relationship that evolves over time. This can lead to the need to make changes to contracts already in place.

Variations to contracts may arise and be proposed for many reasons, including:

  1. changes in the scope of goods or services required

  2. changes in the contract charges or rates

  3. extensions of time

  4. changes in resources required to perform the contract

  5. clarification of issues which the original contract has not adequately dealt with, or

  6. other changes to the underlying needs of either party

A contract variation request from one party may indicate an underlying problem in that party’s ability to perform its obligations as originally anticipated. In such circumstances, the other party should consider its options and satisfy itself that a variation is the most suitable

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