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A Variation order is an agreement by two members of an agreement (contract) to modify the contract to add or subtract work. (Positive / Negative Variation Order) A claim is a request by one party of the agreement for payment or other relief from some change in the agreement that they believe if due them but the other party doesn't agree with. An unresolved claim can in time result in legal action. It might also result in a Variation Order.
A "claim" can arise as a consequence of a variation - again depending on the form of contract. If the valuation rules for a variation do not allow full recovery of the actual costs - for instance extra excavation being carried out in a bad weather period - thus taking longer and costing more - then a formal claim may be required.
Variation Order is the same as change order some times for smaller amount change they use VO but as I know they are the same,
VOs are accepted by both parties or even in whole project , in some projects there is a CCB(change control board) which they study and accept the changes proposed by change orders or variation orders,..
But Claims in contracts are arise by one party and if the opposite side was not happy wtth it, It is still valid and could be referred to a legal action. in almost all contract the the way of arising claims are clear, It may happen that VOs after discussion have been changed to claims.
New orders are new order which are required by one party,...
MS. Kalaivani Sankar has mentioned good points.
Owners, contractors and subcontractors know that claims and change orders are common parts of almost any construction project. Yet these two terms refer to entirely different problems. Failure to keep those differences in mind can destroy the contractor’s ability to be paid for its work.
By making a claim, the contractor is demanding that the existing deal be enforced. The claim refers to the current construction contract and demands that the owner do something it has already agreed to do. Presenting a change order for the owner’s signature, on the other hand, is the contractor’s request for a new deal. The change order says nothing about whether the owner is living up to the current contract.
What is confusing is that change orders and claims often occur together. Take the situation where the owner asks for additional work. The contractor performs and the owner is slow to pay for the extras. What should the contractor do? The contractor will typically submit a change order to increase the construction contract price by the amount of the extras. But what if the owner doesn’t get around to signing the change order? Has the contractor made a claim for payment? No. All the contractor has done is suggest the amendment by change order.
Here is the catch: most construction contracts impose time deadlines for submitting claims. The AIA construction contract forms, for example, require claims to be made in writing within21 days after the claim arose. In our situation, the contractor could lose its right to be paid if no claim is made within21 days after the extra work was started. Submitting the change order is not sufficient - a claim needs to be made.
Change orders are not subject to the same deadlines as claims. Some construction contracts may impose no deadlines whatsoever on change orders. After all, the owner and contractor can agree to change the deal anytime they want. Other construction contracts impose stricter deadlines on change orders than on claims. Some contracts, for example, require change orders to be written and signed before the change in work occurs. Under this kind of contract, our contractor would be late on both its claim and its proposed change order!
Owners, contractors and subcontractors know that claims and change orders are common parts of almost any construction project. Yet these two terms refer to entirely different problems. Failure to keep those differences in mind can destroy the contractor’s ability to be paid for its work. - See more at: http://www.millerjohnson.com/pubs/xprPubDetail.aspx?xpST=PubDetail&pub=1563#sthash.euMZFK9c.dpuf
I am not expert in this, but still wanna give a try
New Order - might be a contract / agreement which wasnt agreed before
Variation Order - Which wasnt in scope prior when the order was agreed or descoping
Claim - might be Charge which is caused due to the variation in order
We can conclude the difference between the as follows:
"Variation order" is add or subtract of work from the contract/agreement.
"New Order" is an addition of work, which is not mentioned in the contract/agreement.
"claim" is a request by one party of the agreement for payment.
I agree with the expert answers. Thanks
When2 parties have signed the contract which contains the cost and duration of the project , the final budget will be the cost of a whole work items plus a reservation amount (9% of the cost) , this additional amount will be useful in the future if we have obliged to create a variation order or a new order
a variation order : when we subtract the extra amount of work which it is not effect on the project , we will get a reservation amount and we add this amount to the main reservation amount and then we add an important new work items to a contract (have been ignored) and we should add extra time for achieve them.
A new order is most often when some extra work gets added to a project after the contract has been signed.
That's extra work and materials that weren't in the original agreement, so it will be added to the contract and the final cost. It could also be additional work needed for hidden problems that weren't apparent at the time of the contract. also they paid from the reservation amount and need to extra time.
Expert opinion says,
A variation (sometimes referred to as a variation instruction, variation order or change order) is an alteration to the scope of works in a construction contract in the form of an addition, substitution or omission from the original scope of works.
New order is quite self explanatory as the name suggests
A change order is an agreement by two members of an agreement (contract) to modify the contract to add or subtract work.
Variation Orders are changes or additions in existing or on-going orders whereas New orders are fresh orders which has no connectivity with existing or ongoing orders and
Claims are additional work done, it is a legitimate request for additional compensation on account of a change in the terms of the contract.
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