You’ve hired a contractor to complete a job. Halfway through, they stop work and demand more money. Do you have to pay? Can they walk off site? What are your legal options?
This guide explains when a contractor is entitled to more money, how variation clauses work, and how to document scope changes so you don’t end up in a tribunal dispute.
When Is a Contractor Entitled to More Money?
A contractor can only claim additional payment if:
- You agreed to a variation in writing — the contract allows variations and both parties signed off on the change
- The original scope was genuinely unclear — the contract was so vague that the extra work falls outside what was reasonably contemplated
- You requested additional work — you asked for something beyond the original scope
- Unforeseen conditions arose — the contract includes a clause allowing price adjustments for genuinely unforeseen site conditions (common in building contracts)
If none of these apply, the contractor is bound by the original price. They cannot unilaterally increase the fee because the job turned out harder or took longer than expected.
If they quoted $5,000 and the scope has not changed, they must complete it for $5,000 — even if they lose money.
What Is Scope Creep?
Scope creep happens when work expands beyond what was originally agreed.
Legitimate scope creep — you ask for extras, make changes, or add requirements not in the original contract. The contractor can charge for this additional work.
Claimed scope creep — the contractor says the job is bigger than expected, but the original contract already covered the work. This is either poor quoting or an attempt to renegotiate after the fact.
The key question: was this work contemplated in the original agreement?
If the contract says “paint the exterior of the house” and you later ask them to paint the fence, that is a variation. If they now claim the eaves were not included, that is not a variation — eaves are part of the exterior.
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How Variation Clauses Work
Most properly drafted service agreements include a variation clause specifying:
- How variations must be requested (typically in writing)
- How the contractor must quote for the variation (itemised, before work starts)
- Whether variations require written approval before proceeding
- How the variation will be invoiced
A standard variation clause looks like this:
> “No variation to this agreement is valid unless requested by the client in writing and agreed to by the contractor in writing, including the additional cost and time required.”
If your contract has this clause, the contractor cannot demand more money unless you approved a written variation. If they proceeded with extra work without your written approval, they have no legal entitlement to payment.
If your contract does not have a variation clause, the position is less clear. The contractor may argue that you implicitly agreed to the variation by allowing the work to proceed.
What to Do When a Contractor Demands More Money
Step 1: Check the contract
Read the original agreement. Does it include a variation clause? Does it specify the scope of work? Is the extra work genuinely outside that scope?
Step 2: Ask for a written breakdown
Ask the contractor to provide, in writing:
- What additional work they claim is required
- Why it was not included in the original quote
- How much extra they are charging
- A revised completion date
Do not agree to anything verbally.
Step 3: Assess whether the claim is valid
Compare the contractor’s breakdown against the original contract:
- Was this work clearly part of the original scope?
- Did I request any changes or additions?
- Is the contractor trying to recover from a bad quote?
If the extra work is genuinely outside the original scope and you requested it, the claim is likely valid. If the contractor is simply claiming the job is harder than expected, the claim is not valid.
Step 4: Respond in writing
If you agree the variation is fair, confirm it in writing and agree to the new price.
If you do not agree, send a written response:
> “I do not accept that the work you have described falls outside the original scope. The contract dated [date] specifies [scope]. I require you to complete the work as agreed for the original price of $[amount]. If you refuse, I will treat this as a breach of contract.”
Step 5: Document everything
Keep copies of:
- The original contract
- All emails and messages
- Photos of the work in progress
- Any quotes or invoices
- Your written responses
Can a Contractor Walk Off the Job?
If a contractor walks off without completing the agreed work, they are in breach of contract. You can:
- Engage another contractor to complete the work
- Claim the difference in cost from the original contractor
- Refuse to pay any outstanding invoices until the work is completed
- Lodge a tribunal application for breach of contract
However, if you have genuinely requested additional work and refused to pay for it, the contractor may have a valid reason to suspend work.
How to Avoid Scope Creep Disputes
Use a written service agreement
A properly drafted service agreement should include:
- A detailed scope of work (specific deliverables, not vague descriptions)
- A fixed price or clear pricing structure
- A variation clause requiring written approval
- Payment milestones tied to completion stages
- A dispute resolution process
Be specific about the scope
Instead of “renovate the bathroom,” specify:
- Remove existing tiles and fixtures
- Install new tiles (supplier and product code)
- Install new vanity, toilet, shower screen (supplier and product code)
- Repaint walls and ceiling
- Install new lighting and exhaust fan
Approve variations in writing before work starts
If you request a change, get a written quote for the variation and approve it in writing before the contractor proceeds. Use email. Keep a paper trail.
Do not make verbal changes on site
If you have an idea for a change while the contractor is on site, say “send me a quote for that and I’ll let you know.”
What If You Don’t Have a Written Contract?
If you hired the contractor based on a verbal agreement or a vague quote, the legal position is messier. In the absence of a written contract, tribunals typically look at:
- What was discussed in emails or messages
- What a reasonable person would have understood the scope to be
- Industry standards for that type of work
- Whether the contractor raised concerns about the scope before starting
How Claim Done Helps
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Final Checklist
Before you pay a contractor’s demand for more money:
- [ ] Is there a written contract with a variation clause?
- [ ] Did I request the additional work in writing?
- [ ] Did I approve the variation in writing before work started?
- [ ] Is the extra work genuinely outside the original scope?
- [ ] Has the contractor provided a written breakdown of the extra cost?
If the answer to any of these is no, you are not obliged to pay. Send a written response, document everything, and be prepared to enforce the original contract. If you need a formal notice requiring the contractor to complete the work as agreed, generate a Notice to Remedy Breach through Claim Done in about five minutes.
Frequently Asked Questions
Can a contractor legally demand more money halfway through a job?
Only if you agreed to a variation in writing, or if the extra work genuinely falls outside the original scope. A contractor cannot unilaterally increase the price because the job turned out harder than expected.
What is a variation clause in a service agreement?
A variation clause sets out how changes to the scope of work must be requested, quoted, and approved. It typically requires both parties to agree to the variation in writing before the contractor proceeds with the extra work.
What should I do if a contractor walks off the job because I won't pay more?
If the contractor is in breach of contract, you can engage another contractor to complete the work and claim the difference in cost. Document everything and consider lodging a tribunal application for breach of contract.
Do I need a written contract with a contractor?
Yes. A written service agreement with a clear scope of work and variation clause protects both parties. Without one, disputes over scope creep are much harder to resolve.
Can I refuse to pay a contractor if they did extra work I didn't approve?
If your contract requires written approval for variations and you did not approve the extra work in writing, you are typically not obliged to pay for it. The contractor proceeded at their own risk.
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