If you set the value of a variable inside the function, python understands it as creating a local variable with that name. This local variable masks the global variable.
In your case, Var1 is considered as a local variable, and it's used before being set, thus the error.
To solve this problem, you can explicitly say it's a global by putting global Var1 in you function.
Var1 = 1
Var2 = 0
def function():
global Var1
if Var2 == 0 and Var1 > 0:
print("Result One")
elif Var2 == 1 and Var1 > 0:
print("Result Two")
elif Var1 < 1:
print("Result Three")
Var1 =- 1
function()
