Home building contracts: Variations vs. price adjustments

Standard Home Building Contracts contain an array of clauses and conditions that, to the non-lawyers out there, can seem to be vague and confusing. There is often, in particular, confusion about the difference between Variations to the Contract and Contract Price Adjustments.

At face value both terms seem similar and there have typically been circumstances where the two terms have been, incorrectly, used interchangeably.

Despite their apparent similarities, each term carries a distinct meaning within the Home Building Contract which creates significantly dissimilar obligations for owners and builders.

How are they different?

In a Home Building Contract, there is generally a clearly defined 'scope of works' which sets out exactly what work a builder is required undertake.