Contract Amendment: A General Overview

What is a Contract Amendment?

As the name suggests, a contract amendment happens when you or the other party to a contract feel the need to make changes to the terms or other aspects of the contract. These changes can include when you modify or delete terms of the document.

With a contract amendment, you can therefore change the rights and obligations of the parties in terms of a contract. Once amended, the contract, as a legally binding document, will then outline the new rights and obligations of every party in terms of the agreement. Keep in mind, though, that contract amendment is only necessary after a contract has been signed.

Before that, any changes can be made to the contract and the parties can initial the changes.

There are many reasons why you would want to amend a contract.

• For example , you may enter into a contract with another party for a certain time period. As the end of the time period approaches, you may then wish to extend this time and a contract amendment will be necessary.
• Another example would be where you buy a certain quantity of goods from another party in terms of the contract. After the contract is signed, you then decide to buy more of the goods. Here, a contract amendment will then be necessary to increase the amount of goods purchased in terms of the contract.

Keep in mind, though, that these are just two examples of when a contract amendment will be necessary and that there are many more. These include basically any term of the contract you and the other party want to change and even include instances where an amendment is necessitated due to something out of the control of the contracting parties.

Here is an article about how to write a contract .

How Do You Legally Amend a Contract?

When you use a contract amendment to make a mutually agreed change to any existing contract , you must ensure that the amendment complies with the legal requirements of the underlying contract.

For example, the current contract may specify the requirements necessary to amend the contract. For a contract amendment to then be valid, these requirements would then need to be adhered to.

In addition, some states may have added requirements to contract law regarding the amendment of certain types of contracts . These requirements may include having witnesses to witness the contract signing or requiring that the parties’ signatures be notarized.

Also, to be legally enforceable, amendments to a written contract should be made in writing and signed by both parties. And, while it’s perfectly acceptable in certain circumstances to enter into oral contracts, it's always better to have the terms of an oral contract reduced to writing. This eliminates any disputes later on.

Considering the above, there are some best practices that you should follow for contract amendments.

Below is a list of rules for best practices when going through the contract amendment process:

1. Always put the contract amendment in writing and ensure that both parties sign the amendment.
2. In the amendment, refer to the original contract, the parties, and the date on which the original contract was signed. This eliminates any doubt as to what document you’re amending.
3. Attach the amendment to the original contract.
4. Don’t make too many amendments . This is especially important when you want to amend a previous amendment. In this case, it’s better to rather prepare and sign a new agreement with the new terms.
5. When making a contract amendment, it’s always better to rewrite the entire section or paragraph of the contract with the changes. This makes it clear exactly what the changes are.

Here is an article about how to legally amend a contract.

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When Can You Make a Contract Amendment?

There is no specific time or legal requirement regarding when you're able to amend a contract. It should therefore happen at any time when you or the other party wants to make changes to the terms of the contract.

For example , let’s say you buy a new car. You then sign the sales contract, but the car dealer needs time to order and deliver the car to you. When the dealer orders the car, it appears that the cost price of the car increased. They then approach you and negotiate a higher price for the car.

If you then agree to pay the slightly higher price, a contract amendment would then be prepared which both you and the dealer need to sign. Once signed, this contract amendment will then reflect the amended price in terms of the agreement.

Another example is when you need to deliver products to a client within seven days after they place an order with you. However, throughout the existence of the contract, you deliver the goods 10 days after they place an order.

Here, although the other party has not objected to the late delivery and you both agree that you're only able to ship the products within 10 days after the date of the order, it's always a good idea to amend the contract to reflect this change.

Here is an article that goes into more detail about Contract Lawyers .

Amendments vs. Addendums

Although many people use these terms interchangeably, there is a substantial difference between contract amendments and addendums . Typically, with a contract amendment, you change the existing terms and conditions of the contract.

In contrast, with an addendum, you add terms or requirements that you may have left out of the original agreement or which have become necessary after the original agreement was signed.

When the terms of an addendum can potentially conflict with the terms of the original contract, you should also prepare an amendment of the original contract which determines which terms will have precedence in the case of such a conflict.

Here is an article about the average cost of hiring a contract lawyer .

Get Help with Contract Amendments

It may be necessary from time to time to make changes to a contract between you and another party. When this happens, a contract amendment is necessary. When you amend the contract, you must comply with the requirements and best practices for an amendment.

If you need help with a contract amendment or need to find a contract lawyer to assist you with one, feel free to post a project on ContractsCounsel’s marketplace.