1. What Is a Contract?
2. Contract Change Overview
3. When and How
4. Written Changes
5. Some Reasons for a Change in Contract

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.

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.

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.

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

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