Verbal Instructions in Construction Contracts: 8 Checks Before You Proceed

A site supervisor is walking the workfront with a client representative when the instruction comes: “Move that service run two metres and keep going. We’ll sort the paperwork later.”

The team wants to maintain progress, so the work proceeds. A week later, commercial identifies additional labour, materials and rework. The client says no formal variation was issued. The contractor says the instruction was clear and was followed in good faith.

The key question is whether the instruction changed the contractor’s obligations, came from an authorised person and complied with the contract’s required form.

Direct answer: can a verbal instruction create a construction contract variation?

A verbal instruction can create significant contractual and commercial risk, but it does not automatically become a valid variation in every construction contract. Many contracts require variations or directions to be issued in writing by a specified authorised person. Other contracts may contain mechanisms for confirming oral directions, dealing with urgent instructions or notifying that a direction is considered a variation. Applicable legislation can also impose additional requirements in particular sectors.

The safest project response is therefore not to assume that every verbal instruction is invalid, or that every verbal instruction is binding. Check the contract immediately, identify the authorised person and required form, confirm the instruction in writing where appropriate, protect any notice requirements and preserve evidence of what was said and what work followed.

Key takeaways

• A verbal instruction is first a project event; its contractual effect depends on the contract and circumstances.
• “The client told us to do it” does not necessarily establish a valid variation instruction.
• Authority matters as much as the content of the instruction.
• Written confirmation is often critical, but “Confirmation of Verbal Instruction” or “CVI” is not a universal contractual mechanism.
• Urgent or safety-related circumstances may be treated differently under some contracts or procedures.
• If the work changes scope, time, cost, procurement or sequence, the commercial consequences should be identified early.
• Site diaries, emails, meeting notes, photographs and resource records can become important evidence.
• Operational urgency and contract administration should run in parallel, not one after the other.

Start with four separate questions

When a verbal instruction is given, project teams often jump straight to: “Is this a variation?”

A better review separates four issues.

1. Did the instruction actually change the contractual requirement?

The first question is scope.

If the instructed work was already required under the contract, the fact that someone verbally reminded the contractor to perform it does not necessarily create a variation.

Compare the instruction against the contractual baseline, including the scope, drawings, specifications, design obligations, schedules, exclusions, clarifications and document-precedence provisions.

The physical work may look different, but the contractual question is whether the obligation itself changed.

Where the issue is genuinely outside the original requirement, move to the next question.

2. Did the person giving the instruction have authority?

Construction projects contain many people who can influence work but may not have contractual authority to direct variations.

A project director, client engineer, consultant, superintendent’s representative, design manager, site representative or asset operator may all give comments or requests during delivery. The contract may nevertheless reserve formal directions to one defined person or role.

The NSW Government construction procurement guide on managing variations illustrates this principle in the NSW public-sector context: its general guidance states that a variation instruction can only be given by the principal’s representative and must be in writing, subject to its guidance for urgent unavoidable circumstances.

Authority should therefore be checked rather than assumed from job title, seniority or site presence.

3. What form did the contract require?

Many construction contracts prescribe how variation instructions must be issued.

The required form might be a written direction, proposed-variation process, variation order, nominated project-system instruction, written confirmation within a specified period or a contractor notice that it considers a direction to be a variation.

Construction Law Made Easy explains that variation instructions should be issued in the manner and form prescribed by the contract and notes that many contracts use written procedures.

A generic “CVI” process should not be assumed. What matters is the actual contractual mechanism.

4. What did the parties do after the instruction?

This is often overlooked.

If the instruction was oral but the parties then exchanged emails, issued revised drawings, priced the work, certified it, incorporated it into progress claims or consistently administered the project on a particular basis, those facts may become relevant to a later dispute.

That does not mean conduct automatically overrides the written contract.

It means the evidence surrounding the instruction can matter.

The Australian case discussed later in this article, Futurepower Developments Pty Ltd v TJ & RF Fordham Pty Ltd t/as TRN Group [2019] NSWSC 1554, is a useful reminder that authority and subsequent contract administration can become factually significant.

A verbal-instruction risk map

“Confirm it in writing” — but do it intelligently

The phrase “confirm verbal instructions in writing” is sound project discipline, but the confirmation should do more than say:

“Further to our discussion, we confirm your verbal instruction.”

A useful record should identify:

• date and approximate time;
• location or meeting;
• person who gave the instruction;
• person who received it;
• precise work requested;
• relevant drawing, specification or work area;
• why the contractor considers the instruction significant;
• whether work has started;
• known or potential cost impact;
• known or potential programme impact;
• any procurement or rework consequence;
• the contractual clause or process being invoked, where appropriate; and
• any response or confirmation required from the authorised person.

The wording should remain factual and contract-aware. Avoid language that accidentally accepts an uncertain contractual position before authority and scope have been checked.

Is a verbal instruction always invalid if the contract requires writing?

It would be unsafe to make that blanket statement.

The written terms matter, but disputes can involve more than the wording of the variation clause. Authority, conduct, estoppel, waiver, deemed-variation clauses, statutory payment regimes and other legal issues may become relevant depending on the facts.

One Australian example is Futurepower Developments Pty Ltd v TJ & RF Fordham Pty Ltd t/as TRN Group [2019] NSWSC 1554.

The contract in that dispute contained written variation machinery, and an issue arose over instructions and approvals given by a person who was not the superintendent originally named in the contract. The Court’s decision considered the way the contract had actually been administered and found an estoppel by convention in relation to the person acting as superintendent.

The lesson for project teams is not “verbal instructions are enforceable”.

The lesson is narrower and more useful:

Do not assume that a later dispute will be decided by one document in isolation. The parties’ conduct, authority arrangements and actual administration can matter.

What about urgent or safety-related instructions?

Urgency can complicate formal variation procedures.

The NSW Government’s managing variations guide provides a useful public-sector example. While its general principle is that variation instructions must be written, the guide recognises that an oral instruction may be necessary where an unavoidable variation requires urgent action, such as eliminating a safety hazard. It then recommends confirming that instruction in writing as soon as possible under the relevant authorisation protocols.

This does not create a universal rule. Teams should check the actual contract for emergency, safety, urgent-direction and variation provisions, while addressing any immediate safety obligations independently of the commercial position.

Residential building contracts can have additional statutory requirements

Requirements can also differ by sector and jurisdiction. For example, the current NSW Home Building Act 1989 includes mandatory terms for certain residential building contracts requiring relevant agreements to vary the contract or plans and specifications to be in writing and signed by or on behalf of each party. That residential rule should not be imported automatically into commercial or infrastructure contracts; check the applicable contract and legislation.

Verbal direction or informal request?

Not every site conversation is intended to change the contract. A request to investigate, price or consider an alternative is different from a direction to proceed, and a technical clarification may simply confirm an existing obligation. Before committing resources, distinguish between a proposal request, a technical clarification, a direction to proceed and a formal variation instruction. Confusing those categories is a common route to disputed variation claims.

What if the site team has already started the work?

The commercial response should become more urgent, not less. Record the instruction while memories are fresh, preserve site and communication records, compare the changed work with the original scope, review the relevant variation and notice provisions, separate the cost and programme effects, and seek formal confirmation from the authorised representative where appropriate. The aim is an accurate contemporaneous record, not paperwork manufactured after the event.

Perfomir’s variation claim documentation checklist provides more detailed guidance on building the evidence trail where changed work is already underway.

What records matter most?

A practical 8-step response to a verbal instruction

When a verbal direction appears capable of changing the work, use the following framework.

1. Record the instruction immediately. Note who said what, when, where and in whose presence.
2. Check the contractual baseline. Confirm whether the requested work genuinely differs from the existing scope or design obligation.
3. Check authority. Identify who is authorised to give directions or instruct variations under the contract.
4. Check form and timing requirements. Determine whether the contract requires a written instruction, contractor confirmation, proposed-variation process or notice within a specific period.
5. Clarify whether work should proceed. If the instruction is not urgent, seek written direction or clarification before committing resources where the contract and circumstances allow.
6. Assess time and cost consequences. Consider direct work, rework, procurement, disruption, sequencing, subcontractor effects and potential completion impact.
7. Protect connected notices. A variation notice may not satisfy separate delay, EOT, cost or claim requirements. Check each relevant mechanism.
8. Track the event through closure. Link the instruction, confirmation, quotation, programme effect, records, assessment and final disposition so the event remains visible.

This framework allows site delivery to continue without allowing the contractual event to disappear.

Who should do what?

Common mistakes with verbal instructions

Common failure points include assuming seniority equals contractual authority; treating every oral direction as automatically valid or automatically invalid; using a generic CVI form without checking the contract; confirming the instruction but not its scope, cost or programme effect; waiting for a formal variation number before tracking cost; overlooking separate EOT requirements; confusing a request to price with a direction to build; and relying on memory rather than contemporaneous records.

Perfomir’s guide to contract variation disputes in construction examines how these scope, authority, notice and valuation issues can develop once positions harden.

From spoken instruction to commercial risk

The event can be mapped through the same contract-intelligence chain used across this series:

Project Event → Relevant Clause → Contractual Obligation → Notice Requirement → Potential Entitlement → Commercial Risk

Project event: a project representative verbally instructs changed work.

Relevant clauses: directions, variations, authority, communications, notices, programme and EOT.

Contractual obligation: determine whether the work changed and what formal action is required.

Notice requirement: identify any confirmation, variation, delay or claim deadlines.

Potential entitlement: assess possible price or time adjustment without assuming the result.

Commercial risk: consider unpaid work, rejected variations, delay, rework, subcontractor exposure, certification disputes and final-account pressure.

This approach is stronger than relying on a project team member to remember later that “someone told us to do it”.

How Contriqo can support earlier review

Contriqo by Perfomir is an AI contract intelligence and decision-support platform for construction and infrastructure.

It is not a substitute for formal project correspondence, variation registers or professional contract administration. It also does not decide whether a verbal instruction is legally binding or whether a contractor is entitled to payment.

Its relevant role is connecting the event to the contract earlier.

When a project team records an event such as a verbal instruction, contract intelligence can help surface the provisions that may need professional review: authority, directions, variation procedures, written-confirmation requirements, notices, EOT mechanisms and potential claim exposure.

That is the practical value of contract administration risk intelligence: the event is considered against the contract while the team can still clarify authority, preserve evidence and take required procedural steps.

If the event begins developing into wider cost, delay or dispute exposure, Perfomir’s claim exposure prediction framework provides further context for connecting ordinary project events with emerging commercial risk.

Frequently asked questions

Is a verbal instruction a valid construction variation?

It can have contractual significance, but there is no universal answer. The contract may require a written direction by an authorised person, provide for confirmation of oral instructions, or contain other mechanisms. The facts and applicable law may also matter.

What is a Confirmation of Verbal Instruction?

A Confirmation of Verbal Instruction, often called a CVI on some projects, is an administrative record used to document an oral direction. It is not a universal standard-form contractual mechanism. Whether it satisfies the contract depends on the actual terms and required communication process.

Should a contractor proceed after receiving a verbal instruction?

That depends on the contract, authority, urgency, safety considerations and circumstances. Where possible, the team should clarify the contractual status and obtain the required written direction before committing resources. Urgent circumstances may require a different response.

What should be included when confirming a verbal instruction?

Record the date, time, location, person giving the instruction, precise work requested, relevant documents, whether work has started, known or potential time and cost impacts and the contractual response being sought.

What if the verbal instruction came from the wrong person?

Check the contract immediately. Authority can be critical. Do not assume that a client employee, consultant or senior manager has power to vary the contract merely because they are influential on the project.

Can a verbal instruction affect an EOT claim?

Potentially. If the instructed change affects programme logic or completion, the variation event may also need to be considered under separate delay and EOT provisions. Compliance with one process does not necessarily satisfy another.

Key conclusion

A verbal instruction should never be treated as “just a conversation” when it may change the work.

But it should not automatically be labelled a valid variation either.

The stronger response is to separate scope, authority, form and evidence. Record what happened, compare the direction with the contractual baseline, identify who had authority, check the required written process, assess the time and cost consequences and protect any connected notices.

The spoken instruction is the project event. The contract determines what should happen next.

This article provides general educational information only and does not constitute legal, contractual or financial advice. Contract terms, legislation and project circumstances vary. Obtain appropriately qualified advice for your specific contract and situation.

Have a contract? See how Contriqo analyses project events against your contractual obligations.

References

• NSW Government — Construction procurement guide: managing variations
• Construction Law Made Easy — How do variations occur?
• NSW Legislation — Home Building Act 1989 No 147
• Construction Legal — Is a verbal instruction enough for a building contract?
• Futurepower Developments Pty Ltd v TJ & RF Fordham Pty Ltd t/as TRN Group [2019] NSWSC 1554