Key Takeaways

  • Contract amendments must follow specific procedures to ensure enforceability, including mutual consent and proper documentation.
  • Mutual agreement from all parties is critical for contract changes to hold up legally. Without this, modifications are likely unenforceable.
  • Written records are crucial—verbal agreements are challenging to enforce and may lead to disputes.
  • Minor adjustments may require a simple amendment document, while extensive changes might necessitate drafting an entirely new contract.
  • Avoid common mistakes, such as failing to document changes properly, skipping signatures from all parties, or ignoring clauses prohibiting specific amendments.
  • All parties must sign updated terms to confirm their consent and make the amendments enforceable.
  • Involving an experienced contract attorney helps you navigate disputes, negotiate terms, or take appropriate legal action.

After creating a contract, one or both parties might want to change its terms, but there are vital considerations to ensure the contract remains enforceable and the process is done correctly. 

This guide will discuss those considerations and answer common questions about making an amendment to a contract. 

What Is a Contract Amendment?

Contract alteration occurs after a contract has been signed, but one party seeks to modify the terms or key points of the contract with or without the other party's consent. 

The effect of contract alteration is that, legally, a new contract has been created because it no longer reflects the intention of the parties at the time the original contract was signed.

Can I Make Contract Changes?

Contracts are often seen as final and binding, but yes, there are circumstances when changes can be made. Adjustments might be necessary due to unforeseen circumstances, mutual agreement, or legal requirements. 

However, the contract must be materially changed, meaning that if the change alters a significant part of the contract, it must be made by mutual consent of both parties. 

If only one party modifies the contract without the agreement of the other, then it is unlikely the changes will be enforceable.

Review the original agreement's provisions before making any modifications. Provisions that outline if and how amendments may take place are found in certain contracts. Ignoring these provisions may result in conflicts or other legal issues.

How to Amend a Contract

Start by carefully reading the original contract with a lawyer. This initial review helps you understand the existing terms and conditions and allows your lawyer to identify any amendment clauses. 

Often, these clauses will list the necessary steps to be followed to modify the contract.

This might include:

  • Receiving prior notice
  • Creating formal documentation
  • Obtaining specific approvals

Share the proposed amendments with all involved parties, giving them ample time to review and raise any concerns. This cooperative and proactive approach addresses questions or objections early, facilitating agreement and minimizing the likelihood of disputes.

Agreement from all parties is a non-negotiable aspect of contract amendments. Once everyone has reviewed and is satisfied with the changes to the contract, signatures from all parties formalize the amendments. 

Without this mutual consent, the changes may not hold up legally, leaving the contract unenforceable in its altered state. If the modification has been performed with the consent of both parties, the non-consenting party is not liable for the changes. 

Importantly, the contract is still invalid even if the non-consenting party changes the document to reflect the original intention by deleting the unauthorized modifications. You will need to create an entirely new contract.

Hire a contract lawyer in your state to review the contract changes and ensure compliance with local laws for added protection.

Visit this article next for a more in-depth guide to amending a contract.

Methods of Altering a Contract

The type and scope of the proposed changes determine which contract modification is appropriate.

For minor adjustments, adding an amendment document might suffice. This document outlines changes without altering the original contract’s structure or intent.

To be considered a modification or alteration of a contract, the changes must appear directly on the signed legal document. It might appear as a change in the handwriting of a signatory to the agreement, or words may be erased or crossed out.

Redlining or tracking changes in the original document can be helpful for more complex modifications. This method visually highlights updates. This makes it easier for all parties to review and compare the new terms against the original.

Whatever the change, it must significantly revise the original document's intention. As a result, if competent parties agree to the contract, the original signers are released from the obligation contained in the original document.

If the changes are extensive, replacing the original contract with a new agreement may be the most sensible solution. This practice clarifies the new terms and eliminates the risk of conflicting provisions between the old and updated contracts. 

Proper documentation and mutual consent are fundamental regardless of your chosen method.

Common Mistakes to Avoid When Altering Contracts

Perhaps the most common mistake when amending contracts is failing to document the changes appropriately.

Lacking a written record or formality, it is difficult to prove that contract amendments were mutually agreed-upon. Even small verbal agreements should be formalized in writing to avoid future disputes. 

Failure to get signatures from all parties involved is another mistake. Only when all parties expressly consent to changes can a contract be enforced. If this stage is skipped, it may be argued the changes were not allowed.

Finally, some contracts might explicitly list amendments that cannot be made. These must be adhered to.

Ignoring these clauses may lead to legal challenges, rendering the amendment, as a whole, void. 

Legal Implications of Contract Amendment

If a contract includes language describing the process for modifying the terms or conditions, and those procedures are followed, contract law decisions have determined the changes are valid. 

Thus, the parties will act under the modified terms of the altered contract. In effect, it’s a new contract.

In most cases, the intention behind any contract alteration is not important. However, if the modification was made with the intent of one party to defraud the other, the contract is considered invalid, and the damaged party may seek a remedy in a court of law.

If you suspect a contract you have entered into has been altered without your consent, it is highly recommended that you seek the counsel of an experienced contract attorney. 

The attorney should be able to advise you of the best course of action, whether it is to agree to the modifications, negotiate new terms, or take legal action against the other party. It is better than being forced to adhere to unfavorable terms.

You can post your legal needs on UpCounsel’s marketplace to learn more about contract alteration. UpCounsel accepts only the top 5% of lawyers on its site. 

Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

FAQs

Do all parties need to sign off on contract changes?

Yes, to ensure amendments are enforceable, all parties must agree and sign the updated terms.

Can a verbal agreement alter a written contract?

While verbal agreements may seem straightforward, they are often difficult to prove, and often, they aren’t legally binding. Written amendments are strongly recommended to avoid confusion or disputes.