Contract Amendment Agreements

A Contract Amendment Agreement allow parties to amend a contract by adding new terms to an existing contract, deleting existing terms, or changing existing terms. The original contract and any prior amendments remain in place, but with amended terms. These are sometimes referred to as a Contract Amending Agreement or a Contract Addendum.

It is beneficial to put agreed changes in writing via Contract Amendment Agreements because it clarifies the understanding between the parties and creates evidence in case things go sideways.

You should amend a contract whenever you or the other party wants to change the original contract terms. Some common scenarios of when you should sign a Contract Amendment Agreement include:

• To extend or shorten the length or term of a contract;
• To extend or shorten time periods (e.g., delivery or repayment schedules).
• To set out a new price or fee for a product or service;
• To change a party’s duties or liabilities; or
• To add a new clause.

Importantly, parties should sign a Contract Amendment Agreement when they discover new information or gaps in the original agreement. For example, an unanticipated situation may arise such as a regulatory change or supply shortages which significantly impacts your ability to meet the original terms of a contract. In this case, properly amending the contract will help you avoid breaching the contract when external circumstances make it challenging to fulfill your original promises.

Amending a contract only occurs after the original contract has been signed. When a contract has not yet been signed, the terms are not yet effective. In this case, simply negotiate the terms prior to having the parties sign.

If an existing agreement has been signed, determine if there is an amendment clause. Many business contracts already include a clause stating how to amend a contract. For example, it may state that “This Agreement may only be amended, supplemented, or modified by the mutual written agreement of all the Parties.”

Next, ensure that parties agree and have a clear understanding as to what is being amended. Everyone involved in the contract must agree to any changes you wish to make. It is not possible for only one party to unilaterally amend a contract.

Finally, have the parties sign a Contract Amending Agreement. Ensure that this agreement follows the best practices outlined below.

Note that depending on the circumstances, it may be better to terminate the original agreement entirely and sign a brand new contract. In this case, a Termination Agreement should be signed before a new contract can be put into place.

Yes, Contract Amendments are legally enforceable as long as they contain the essential elements of a contract. In Contract Law, every contract requires:

A Contract Addendum is similar to a Contract Amendment but not quite the same. The difference between a Contract Amendment and a Contract Addendum is that the former changes the actual terms of an original contract whereas the latter keeps all the original terms in place and simply adds additional ones. Note that a Contract Addendum is also different from a Contract Appendix.

• Reference the Original Agreement: When you amend a contract, be sure to reference the name of the original contract, the names of all the original parties, and the original signing date. You should also attach the original version of the contract. This makes it clear what document you are amending.
• Be Clear About the Changes: Always restate the referenced section or paragraph number of the original document. Instead of merely describing the change, it is preferable to re-draft each section, clause, or paragraph that you are changing.
• Track Amendment: This is especially important when there have been multiple amendments. Create a written record of all prior amendments, including each addition, deletion, or modification.
• Notarize: Although it is not legally required to notarize a Contract Amendment, doing so helps reinforce the validity of the other parties’ signatures in case the enforceability of the contract is ever in dispute.
• Legal Review: Have a contract lawyer draft or review the Amendment Agreement to ensure that clear and proper language is used and that the terms are consistent and do not create unintended consequences. Moreover, a contract lawyer can determine whether the Contract Amendment or Contract Addendum meets the criteria for a valid contract in your jurisdiction.

A contract lawyer can help you draft, review, or negotiate your Contract Amendment or Contract Addendum. Since specificity and clarity are so crucial when you amend a contract, downloading a basic template online may expose you to legal consequences. We can ensure validity and enforceability, while also giving you a clear idea of your legal rights and obligations under the amended contract. This way, you can make an informed decision regarding whether or not to move forward with the changes.