Variations to Residential Building Contracts in SA

What it is

Start with the fact that catches most builders out. The Building Work Contractors Act 1995 (SA) has no variations section.

Part 5 of the Act runs s27 to s40. It covers formalities, price, payments, exhibition houses, statutory warranties, insurance, the right to terminate, court powers and harsh terms. Nowhere does it say a variation must be in writing, and nowhere does it bar a builder from recovering for a variation that was not.

That absence is the SA position. Variations here are a matter of contract, not statute, and the Form 1 notice every owner receives says exactly that: refer to your particular contract.

What that does and does not mean

It does not mean verbal variations are safe. It means the statutory safety net that exists in other states is missing, so everything rests on the clause you drafted.

Because there is no statutory writing rule, there is also no statutory bar on recovery and therefore no tribunal dispensing power to rescue you. There is nothing to be excused from. If your contract requires a signed variation before the work proceeds and you proceed on a phone call, you are not asking a tribunal to waive a statutory formality. You are arguing that a separate contract was formed, or falling back on quantum meruit, in front of the Magistrates Court under s37.

That is a worse position than it sounds, because you carry the onus and the owner has already had the benefit of the work.

The sections that do bite

Three provisions constrain a variation even though none of them name it.

Section 28(1)(b) requires the contract to set out in full all the contractual terms. If the contract has no variation mechanism, there is no contractual route to charge more. A verbal side agreement is also not part of the written contract the section demands.

Section 29(1) requires a domestic building work contract to stipulate a specific price for the work, being a price that is fixed and not subject to change, together with the terms of payment. A price that moves needs a lawful basis: an agreed variation under the contract, a rise-and-fall clause under s29(2) or a cost recovery provision under s29(5).

Section 29(6) requires the words "This Price May Change" or "Estimate Only" immediately alongside or below any price that may change or is an estimate only, and s29(7) requires multiple such prices to appear in a single list. Breaching s29 is an offence: $50,000 maximum for a natural person, $250,000 for a body corporate, with a $5,000 expiation fee.

What the regulator says

CBS is direct about it. Variations should be agreed by both parties, put in writing and signed, unless the contract allows for variations without the owner's consent. The terms of the contract set out whether the contract can be varied at all.

CBS also confirms the narrow exception: variations can sometimes be made without the owner's consent where the contract allows, generally where a change is needed to meet regulatory requirements.

Form 1 tells owners that most variations require their written approval in advance, that others may be unforeseen and that they should not rely on verbal promises or agreement. "Should" is doing the work in every one of those sentences. None of it is a statutory command.

The trap in a verbal instruction

The owner points at a wall on Thursday and says move it. You move it. You invoice in the next claim.

Three things now work against you. Your own clause probably made a signed variation a precondition, and you did not meet it. Section 30(1) says you may only demand a genuine progress payment in respect of work already performed, so the claim has to stand on its own feet. If the variation was not validly made, the extra amount is not a payment under the contract at all.

Then there is s38. If the owner argues your variation clause is harsh or unconscionable, the Magistrates Court can avoid the term from the beginning, modify it or order repayment of amounts paid under it. The ACL unfair contract terms regime sits over the top.

Where SA lands

SA gives you freedom and hands you the risk with it. No statutory form, no statutory time limit on notice, no statutory bar and no statutory relief.

The practical answer is to draft as if the statute did require writing. Signed variation before work starts, scope and price stated, time effect stated. Then check s29(6) labelling wherever the number can move, because that one is an offence rather than a preference.