This clause establishes the formal process and authority required to approve changes or modifications to the original contract terms. It typically specifies who has the power to authorize variations (e.g., project manager, senior management, or designated representatives), what documentation must be submitted with a variation request, and what timeline applies for approval decisions. The clause matters because without clear approval procedures, parties may dispute whether a variation was legitimately authorized, leading to disagreements about cost responsibility, timeline extensions, and scope changes. It prevents unauthorized modifications and creates an audit trail of all agreed-upon changes.
The practical importance lies in preventing scope creep and protecting both parties from unintended financial or scheduling consequences. When approval authority is clearly defined, it reduces the risk of one party claiming they never agreed to a change, and it ensures that decision-makers with proper authority are the ones authorizing variations rather than lower-level staff who lack the power to commit the organization.
Ensure the clause clearly identifies specific individuals or roles authorized to approve variations, sets a reasonable approval timeline (typically 5-10 business days), and requires written documentation of all approvals. Consider implementing a tiered approval system where minor variations (under a certain cost threshold) require less formal approval than major changes. Include language requiring both parties to sign off on variations in writing, and specify that verbal approvals or email confirmations from authorized representatives are binding. This prevents disputes about whether approval actually occurred.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause establishes the formal process and authority required to approve changes or modifications to the original contract terms.
Why should I care about this clause?
It typically specifies who has the power to authorize variations (e.g., project manager, senior management, or designated representatives), what documentation must be submitted with a variation request, and what timeline applies for approval decisions.
What are my options?
The clause matters because without clear approval procedures, parties may dispute whether a variation was legitimately authorized, leading to disagreements about cost responsibility, timeline extensions, and scope changes.
How does this affect small businesses?
It prevents unauthorized modifications and creates an audit trail of all agreed-upon changes.