How to Amend a Contract: Everything You Need to Know
How to amend a contract begins with rewriting the portion of the contract that needs to be changed.3 min read
2. Contract Addendum
How to amend a contract begins with rewriting the portion of the contract that needs to be changed. Drafting amendments is the ideal solution to modify an existing contract, whether it be an addition, correction, or deletion. Contracts are legally binding documents once they are signed; however, there may be flexibility based on how the contract is written.
Any amendments made to a contract should be handled as seriously as the original because it is changing the initial intent of the contract. Amending a contract does not alter the entire document. Instead, it deals only with specific portions. An example would be changing the location or date of an event, pricing, or details of an order. If the contract needs major changes, it is better to rewrite the entire document.
How to Write an Amendment to a Contract
The goal of writing an amendment is to make changes only to specific portions of the contract while leaving everything else intact. To do this, the amendment should be drafted and negotiated between the original parties of the contract. A properly written amendment will eliminate future legal issues and extra costs.
When drafting an amendment, the following guidelines and details should be included:
- Draft a document entitled "Amendment." This process is similar to drafting the original contract, and all parties must agree to the changes noted in the amendment, including the language used.
- List the names of the parties from the original contract.
- Include the date of the original contract.
- Indicate word-for-word which contract clause will be altered. Well-written contracts are organized with paragraphs, subparagraphs, sections, and subsections that are labeled with numbers, letters, or roman numerals. If the original contract is well-organized, noting which portion will be amended will be easier, and therefore, understanding the changes will be easier to understand.
- An example noting what portion of a contract will be changed is "section I, subsection C, paragraph ii, subparagraph d."
- Supply the new amendment and specify how it is changed from the original content with strikethroughs, insertions, or by providing completely new sentences. Strikethroughs and insertions are simple to complete but may result in confusion. To help avoid any confusion, new sentences should be used. New sentences should be indicated by placing them after the original with the phrase "is hereby replaced with."
- An example of noting new sentences is: Section I, subsection B, paragraph ii, subparagraph c, which reads "Each shipment will be delivered on the tenth day of the month" is hereby replaced with "Each shipment will be delivered on the nineteenth day of the month."
- State that only the specific section is being altered and that all other content will remain as it was in the original contract.
- All parties of the contract should sign and date the amendment. If needed, witnesses can be present for additional proof once there is an agreement to the amendment changes.
- Once the amendment is complete and signed, copies should be given to all parties.
Copies of the signed and dated amendment do not need to be supplied to the court of law unless a legal dispute exists. The amendment acts as proof to the court as to what was agreed to by the parties in an effort to resolve any legal issues.
Contract addendum is governed by the laws of the jurisdiction where the property is located or in some situations where one of the parties resides. This designation may be indicated in the original contract. While there is no limit to how many times a contract can be amended, a rule of thumb is that after five amendments, a new contract should be drafted and executed.
New clauses that were not in the original contract may be added to the contract in the Additional Terms section. In this scenario, the original contract remains the same and unaltered. Both parties must agree and sign any changes made to the contract. Changes made by one party without the other would not be considered valid and unenforceable by the law.
Corporations use a corporate seal to authenticate all corporate documents. The seal is a stamp that will emboss the paper. In most corporations, the signing officer is in control of the seal.
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