A variation clause (aka Work Changes clause) organises in a services agreement how the scope of the agreed specified Work may be changed (and lead to extra charges).
In a Variation clause (also known as a Work Changes clause), a service provider and customer provide how modifications to the agreed scope of work (or SOW) must be proposed by either party and the required steps before such proposed changes may be implemented (and lead to extra charges).
The purpose of the clause is to (i) permit the customer to further-specify the specifications of the Work (without extra charges), and (ii) prevent that an inadvertent instruction or request for variation of the agreed scope of work is implemented or leads to unanticipated extra charges by the service provider.
The Variation clause provides for the parameters and the ‘procedure’ to be followed by both parties. Such Variation or Work Change may obviously to disagreement, since often, the changes have already partly been implemented, in which case this clause also provides for a simple, informal dispute settlement mechanism. If such ‘dispute’ would arise, it may also be useful that an intermediate remedy be (permitted to be) implemented. After all, such dispute settlement procedure should not lead to obstruction of the entire SOW or delivery of services.
The clause anticipates that there is some sort of SOW (Statement of Work) specifying the work or agreed results. It also anticipates that the Work is subdivided into milestone deliverables. If that is not necessary, the clause should obviously be adjusted.