Key Takeaways

  • A contract change proposal is a formal request to modify the terms of an existing agreement.
  • Proposals are used to adjust scope, deadlines, pricing, or compliance with new regulations.
  • Both oral and written contracts can be modified, but written proposals ensure clarity and enforceability.
  • A contract change proposal is not automatically binding; it must be reviewed, negotiated, and accepted by all parties before becoming enforceable.
  • In industries like construction, proposals often precede a formal change order, providing a structured review process.
  • Effective proposals include clear reasoning, cost or schedule impacts, and documentation for recordkeeping.
  • Courts often uphold written changes over verbal ones, and some amendments (such as real estate or high-value financial agreements) must be in writing by law.

A contract change proposal is a document presented by a party, such as a client, to change the terms of a contract.

What Is a Contract?

A contract is an agreement that is legally binding between two or more interested entities. It usually outlines the benefits and obligations of all involved parties in writing. Technically, a contract can be either oral or written. However, when someone says contract, what they usually have in mind is a written and signed document. An oral contract, on the other hand, is usually referred to as an agreement.

An oral contract is as binding and enforceable as a written one. The problem with an oral contract is that when there's a dispute, evidence is hard to pin down. This is because the call for evidence usually results in one party's word against the other's. Oral contracts aren't enforceable for agreements like real estate deals or agreements that are meant to run beyond the span of one year.

Contract Change Overview

Both oral and written contracts alike can be adjusted. A contract can be adjusted only when all involved parties agree to change any of its original terms. The adjustment of a contract can be partial or complete, depending on the parties' requirements. The modification of a contract can include deleting and adding information in order to get rid of errors and properly redefine sections of it. This, in most cases, doesn't completely change the contract, but simply straightens out a section or sections of it.

Purpose of a Contract Change Proposal

A contract change proposal provides a structured way for one party to suggest modifications without immediately altering the binding agreement. Its purpose is to ensure that proposed changes—whether to cost, scope, or timeline—are documented, reviewed, and either accepted or declined. This step creates transparency by requiring written justification, helping prevent misunderstandings or disputes later in the project. In industries like construction or IT, the proposal stage allows stakeholders to evaluate whether the change is feasible, affordable, and compliant before committing.

When and How

Changes can be made to a contract either before or after signing. For contract changes to be binding, all involved parties must be in agreement. Changes to a contract that are not accepted by a party aren't likely to be enforceable. On the other hand, changes that are accepted by all parties are valid, binding, and enforceable.

Some written contracts may define when and how changes can be made. For instance, if you own a credit card, you signed a contract when you applied for it. The contract might have stated that the issuer of the credit card reserves the right to change the interest rate as they deem fit. By signing the original contract, you have granted the card issuer your permission to make such changes in the future.

A contract is open to amendment at any time, provided all involved parties agree to the amendment. Changes effected before the full execution (signing) of a contract are technically not changes. All changes made before parties sign a contract are considered part of the original contract. Insignificant changes in a contract can be added to the original document by hand and signed by the involved parties. On the other hand, significant changes to a contract have to be reprinted and signed again.

Key Elements of a Contract Change Proposal

A well-drafted contract change proposal should contain:

  • Description of the change – clearly state what is being modified.
  • Reason for the change – outline why the modification is necessary (e.g., regulatory updates, unforeseen circumstances, or client requests).
  • Impact assessment – detail how the change affects cost, schedule, or resource allocation.
  • Supporting documents – include any technical drawings, budget breakdowns, or legal references.
  • Proposed timeline – indicate when the change should take effect and whether it alters project deadlines.
  • Approval lines – identify who must review and sign off on the proposal before it becomes binding.

These elements make the proposal easier to evaluate, increasing the likelihood of acceptance and smooth contract execution.

Written Changes

It's important for a change made to a contract to be in writing. That way, it can be added to the written contract as an attachment. Usually, a contract would specify that future changes be put into writing. Therefore, it's important to adhere to such a condition.

That notwithstanding, the need to make changes in writing isn't always enforced in court. The reason one court gave for this was that parties aren't allowed, even by a written clause in their contract, to deny themselves the authority to change or call off their contract by a later agreement. Therefore, a contract that is written may be changed by the involved parties in any way they deem fit.

However, written changes are still a welcome idea because they allow all parties to be in agreement about the definite terms of the amendment. Written amendments, like written contracts, have several advantages that oral ones don't have. State law requires some kinds of amendments to compulsorily be in writing. For instance, amendments to intangible or tangible property transfer and certain monetary contracts are required to be in writing.

Difference Between Change Proposals and Change Orders

While the terms are often used together, a contract change proposal is distinct from a change order.

  • Change Proposal – An initial request or suggestion for modification, submitted for review and negotiation.
  • Change Order – The legally binding document that formalizes an approved change to the contract.

This distinction is especially important in construction projects. Contractors typically submit a proposal first, outlining cost and timeline impacts. If the client agrees, the proposal is converted into a change order, which becomes part of the enforceable contract. Understanding this process helps all parties maintain proper documentation and avoid disputes over unauthorized changes.

Some Reasons for a Change in Contract

Some of the common reasons that make contract modification necessary are:

  • Need to change contract duration
  • Need to change the number of items required
  • Need to add or subtract required goods
  • Need to modify terms of payment
  • Need to modify terms of delivery
  • Change in statutory requirements
  • Court order

Best Practices for Managing Contract Change Proposals

Managing contract change proposals effectively requires organization and clear communication. Recommended best practices include:

  1. Use a standardized format – adopt a template so all proposals contain consistent information.
  2. Track proposals separately – maintain records of all submitted proposals, even if not approved, for future reference.
  3. Review promptly – delayed responses can disrupt projects and create unnecessary costs.
  4. Engage legal counsel when needed – especially for high-value or complex contracts, to ensure compliance.
  5. Communicate impacts clearly – explain how the change affects budget, scope, and timeline, avoiding vague descriptions.

By following these practices, businesses can reduce risk and maintain strong working relationships with contracting partners.

Frequently Asked Questions

  1. What is the difference between a contract change proposal and a change order?
    A proposal is a request for modification, while a change order is the formal, binding document issued once the proposal is approved.
  2. Are contract change proposals legally binding?
    No, a proposal is only a request. It becomes binding once all parties agree and a formal amendment or change order is issued.
  3. Do all changes to a contract require a proposal?
    Not always. Minor edits may be handled informally, but significant changes to scope, cost, or deadlines should be documented with a proposal.
  4. Who reviews and approves a contract change proposal?
    Typically, the other contracting party or a designated project manager reviews the proposal. For large contracts, legal or financial teams may also be involved.
  5. What happens if a contract change proposal is rejected?
    If rejected, the original contract terms remain in effect. Parties may renegotiate and submit a revised proposal if needed.

If you need help with contract change proposal, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to 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.