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If a contract already exists and you and the other party want to modify some element of it—whether it's an addition, deletion, correction, or similar change—an amendment is an ideal solution. An amendment doesn't replace the whole original contract, just the part that's changed by the amendment (for example, the delivery date or the price for goods). If a contract requires extensive changes, it's generally wiser to create an entirely new agreement. Alternatively, you can create an "amendment and restatement," which is an agreement that reproduces the prior contract with the agreed-upon changes. Read on to learn more about amendments to contracts and how to use them. To see what a contract amendment looks like, check out our sample amendment to contract.
Whenever you and the other parties want to deviate from the terms of a signed contract, it's important to amend the contract instead of relying on the other party's verbal or written approval. If you fail to properly amend the contract and act as if you did, you might face penalties for breaking (or "breaching") the agreement.
Modifications Before You Sign the ContractIf you modify a contract before you sign it, such changes aren't "amendments." If you wish to handwrite a change into an agreement that has been printed out for signature—for example, because you noticed a typo at the last minute—you can do so with a pen and have both parties initial it. Although not technically an amendment, these modifications are sometimes labeled as such.
While putting your amendment in writing is always a good idea, oftentimes, a written amendment is required—either by the contract terms or by law. Your contract will likely have an entire agreement clause that specifies that any amendment to the contract must be in writing. Moreover, your state's laws might require that your particular kind of contract be in writing to be enforceable.
In some cases, one party will allow the other to technically violate the agreement (in a sense, modifying the contract's terms) without consequence. This situation is a little tricky and can cause issues without a special provision to protect the validity of the rest of the contract.
Look at your state's laws and your contract's terms to look for a written requirement.
This clause explains that the contract is the entire agreement between the parties. Further, this provision should explicitly say that:
Surprisingly, the requirement that modifications be in writing provided in the above clause isn't always enforced. Even in the presence of a provision in the contract requiring written amendments, courts have recognized oral amendments to contracts.
When there's been an alleged oral change to an agreement, courts have looked at whether one or both parties relied on an oral modification in carrying out the contract. Moreover, courts typically consider the parties' intentions when modifying the agreement along with any sign of mutual consent to the change or an additional exchange of consideration.
However, you shouldn't disregard clauses requiring modifications in writing or prohibiting oral amendments, or avoid using such clauses in agreements. Written amendments, like written agreements in general, have many advantages over oral agreements. A party seeking to enforce an oral modification despite a clause prohibiting them will face an uphill battle in court.
In addition, state law requires that some types of amendments be in writing—for example, amendments for transfers of real or intangible property and certain financial contracts must be in writing (as explained later).
The Uniform Commercial Code (UCC) is a set of model rules that govern business transactions. Every state has adopted some version of the UCC into its laws.
The UCC requires that some kinds of contracts be in writing. A law requiring written contracts is called a "statute of frauds." Under these laws, if the contract isn't in writing, the agreement isn't valid. In these cases, you'll also need to put your amendment in writing.
You must put the following kinds of contract (and any amendments) in writing:
There are times when the parties want to deviate from the agreement, but don't need to modify it. For example, one party to a nondisclosure contract (NDA) might give the other party permission to disclose certain facts to certain people, even though that disclosure might technically violate the language of the contract.
These deviations—in which a party waives a provision or permits something that's otherwise prohibited by the contract—are sometimes considered amendments, although they're more properly defined as "waivers" or "consents." Unlike an amendment, a consent or waiver doesn't modify the agreement itself; instead, it excuses or permits activities that are otherwise prohibited by the contract. Consents and waivers should be in writing.
Your contract should include a waiver clause to prepare for potential consents and waivers. This clause should say that any consent or waiver by one party or a party's failure to exercise any right in the agreement should not waive any other rights under the contract. This clause means that even if you waive one of your rights in the agreement on one occasion, it doesn't waive your rights elsewhere.
The goal when creating a contract amendment is to be as specific and concise as possible. The document can appear informal—for example, like a letter agreement—or it can resemble the original contract in font and layout. Generally, amendments come in one of three different styles, which are discussed below, all with corresponding examples.
You can choose whichever method suits you or combine them if you wish. The important thing, as with all contract drafting, is that your intentions are clear to all parties as well as to third parties reading the amendment. In addition, be sure to change any cross-references, if necessary.
Under this method, you show additions and deletions to the contract visually, by underlining additions and crossing out deleted text. (Most word processing programs allow you to choose "strikethrough" as a font style choice.) A statement describing the process used to draft the amendment commonly precedes the amendment itself. An example is below.
The parties agree to amend the Agreement by the following additions (indicated by underlining) and deletions (indicated by strikethroughs):
Section 7 is amended to read as follows:
7. Term. The Term of this Agreement shall be from July 31, 2024 to July 31,
20252026. The Agreement may be renewedon an annual basisfor additional two-year terms following the initial term, upon written agreement of the parties. The parties must mutually inform each other of their intention to renew the Agreement no later thanJanuary 31June 1 of each year in which the Agreement is set to terminate.
In this method, when amending a contract you simply state that a whole clause has been replaced, and provide the new clause. Here's how it looks.
Section 7 is replaced in its entirety by the following:
7. Term. The Term of this Agreement shall be from July 31, 2024 to July 31, 2026. The Agreement may be renewed for additional two-year terms following the initial term, upon written agreement of the parties. The parties must mutually inform each other of their intention to renew the Agreement no later than June 1 of each year in which the Agreement is set to terminate.
Using this approach, you describe the changes. This is often shorter but requires the parties to check against the existing text of the contract.
The first sentence of Section 7 is amended by modifying "2025" to "2026." The second sentence is amended by striking "on an annual basis," and replacing it with "for additional two-year terms." The date in the last sentence is modified from "January 31" to "June 1."
Instead of amending your contract, you might use an addendum to add terms to the agreement. Unlike an amendment, an addendum doesn't change the terms of the original agreement. Instead, an addendum supplements the contract by adding terms or clarifying issues that weren't in the contract.
For example, if the contract doesn't specify the prices of products or dates for delivery, you might draft an addendum to provide these details.
For practical tips on getting your agreement in writing, read our article on making solid business agreements and contracts. If you're looking for an A to Z guide to everything you need to know about contracts, check out our book Contracts: The Essential Business Desk Reference, by Richard Stim (Nolo).
If you have a particularly complicated contract or have specific legal questions, talk to a local business attorney. They can review a contract for you, as well as negotiate and make changes on your behalf. Alternatively, a lawyer can draft your contract for you, ensuring the contract optimizes your best interests.