How do you modify a contract?

Sometimes, after you have entered into a contract, you may need to modify it. Either time has passed and circumstances have changed, or you recognize that the first version is not exactly what you intended.

How do you change it? The best way is to enter into a contract amendment.

To amend is to alter, modify or change something. If your contract is in writing, the preferred way to modify it is also in writing. In fact, even if you have an oral contract--one you have not put in writing--you may wish to amend it in writing. Doing so will also memorialize the fact that you have a contract and what the current terms of it are. That will make it easier to prove what the original terms were, as well as those you have changed.

Just as you can enter into an oral contract, though, you can also amend a contract without writing down the changes. That can only occur with a written contract if that document does not provide that all amendments must be in writing, and most written contracts prepared by lawyers will have such a provision.

An amendment to a written contract generally is labeled at the top of the first page with something like “Amendment to [insert the name of the underlying agreement]”. To be effective, it will need to be entered into by the same parties as the first agreement--although the parties can be modified by the amendment.

A description of the existence of the underlying contract, and what the parties intend by the amendment, is often included within paragraphs called Recitals. Then, the body of the amendment provides something like, “The parties hereby agree that Paragraph 1 of the Underlying Agreement is modified to read as follows.” The desired changes are then included--as many, in following sections, as are needed to memorialize everything the parties want to have changed.

Amending an oral agreement should be similar, although less formal if the terms are not written down. A caution: it may be easier to enter into unwanted amendments if the agreement is oral or if there is no restriction that all amendments must be in writing, and the parties discuss the terms or possible changes even informally. Such discussions give the other party an argument that an amendment was intended.

If you have any questions or concerns about how to amend a contract, or whether a writing or discussion constitutes an amendment, it is always a good idea to consult an attorney.

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