Construction disputes rarely concern whether work was done. They concern whether it was a variation, whether it was instructed, what it was worth, who caused the delay and who bears its cost. All four are determined by records made at the time, which is why the party with better documentation usually prevails regardless of the underlying merits.
What actually constitutes a variation
A variation is a change to the scope of work from what the contract required. The definitional problem is that the contract scope is defined by the contract documents — drawings, specifications, and any priority order between them — and those documents frequently disagree with each other.
Practical consequences:
- Check the priority clause. Most standard contracts specify which document prevails where they conflict. That clause decides a large share of variation arguments.
- Work required to complete the contracted outcome is usually not a variation, even if it was not drawn. Work that changes the outcome is.
- Provisional sums and prime cost sums are not variations when the actual cost differs; they are adjusted per the contract mechanism.
Instructions and the trap of proceeding without one
Most contracts require variations to be instructed in writing before the work is done, and payment for uninstructed work is a recurring source of loss for contractors.
The commercial reality is that a contractor asked verbally to do something extra, on a site where stopping costs everyone money, usually does it. The protection is not to refuse but to confirm in writing immediately — an email that day recording what was asked, by whom, what it will cost or that cost will follow, and that you are proceeding on that basis.
That email is not a formality. It converts a disputed conversation into a documented instruction, and its absence is why contractors write off legitimate work.
Time, delay and extensions
Delay claims turn on cause and on notice.
Contracts distinguish between delays entitling the contractor to more time only, and delays entitling more time and money. Broadly, delay caused by the principal or by matters at the principal’s risk tends to carry cost; neutral events such as weather often carry time alone.
Notice provisions are strict and are frequently fatal. Most contracts require notice of a delay event within a defined period, sometimes short. Missing it can extinguish an otherwise valid entitlement regardless of how clearly the delay was caused by the other party.
The discipline is to notify early and generously. Notice costs nothing; an out-of-time claim is worth nothing.
Liquidated damages for late completion are common. They are enforceable where they represent a genuine pre-estimate of loss, and a contractor facing them should be scrutinising whether extensions of time have been properly granted for events that entitled them.
Records that decide disputes
The documentation that wins construction disputes is unglamorous and must be contemporaneous:
- Daily site diary — who was on site, what was done, weather, deliveries, delays, instructions received, visitors.
- Photographs, dated, of progress and of any condition that later becomes contentious.
- The programme, and updates to it showing the effect of events as they occur.
- Correspondence confirming verbal discussions the same day.
- Site instruction and variation registers, kept current rather than reconstructed.
A site diary written daily by a foreman is worth more in a dispute than expert evidence prepared afterwards.
Payment claims remain the strongest tool
The Construction Contracts Act payment regime sits over all of this. A compliant payment claim obliges the payer to respond with a payment schedule within the required timeframe, and failure to do so generally makes the claimed sum due in full and recoverable as a debt with limited grounds to argue about the work.
Contractors who invoice casually forfeit a statutory advantage that costs nothing to hold. Getting payment claims right is the highest-return administrative task in a construction business.
Adjudication
Disputes under the Act can be referred to adjudication, producing a binding determination on a fast timetable and enforceable while any further proceedings continue. It is designed to keep cash moving rather than to reach a perfect answer.
Timeframes move quickly once started, which favours the party whose records are already in order. That is the same party who was keeping a site diary.
Practical guidance
- Read the variation, notice and time clauses before signing, and diarise the notice periods.
- Confirm every verbal instruction in writing the same day.
- Keep the site diary daily, not weekly.
- Notify delay events early even where entitlement is uncertain.
- Issue compliant payment claims every time.
MBIE publishes guidance on the Construction Contracts Act and building contracts free at building.govt.nz, and the standard form contracts published by the industry bodies come with commentary worth reading.
General information only, not legal advice.
