22 Aug 2012

How to Amend or Change your Contract

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Changing or Amending Your Contract

There are many advantages in using standard contract forms if you do similar or multiple transactions. Often such forms have evolved from earlier litigation battles and the editing of legions of attorneys. While I often counsel clients who are presented with such contracts to have them reviews at the first transaction, they do have their use. Often the use of such contracts might reduce disputes and legal action within the industry and most practitioners are familiar with them.

On some occasions it is necessary to include specifics about a particular or specific project in the standard contract. Or, some of the terms can change over time due to the evolving course of dealings between the parties. Amending the contract IN WRITING gives you the opportunity to make changes without having to rewrite the entire contract. It also documents the course of conduct changes.

How Not to Amend a Contract:

Most contracts contain a clause that says that they can only be changed, amended or modified in writing. For businesses that are engaged in a series of transactions over a period of time, maybe even years, that clause is a time bomb if there is a dispute. Why because odds are you will have modified the terms of the contract in practice, but if there is a dispute, you may be bound only by the terms of the actual contract. It can get ugly.

Oh, by the way, marking up the original contract with notes and changes then initializing them is another recipe for trouble. It never reads the same when you look back at it when there is trouble. And, I can almost guaranty that someone is going to claim that the changes were put there after the fact.

The Right Way to Amend a Contract:

Do it in writing. But make sure that the amendment clearly references the original contract and states that whatever is not being changed in the amendment remains as is. A basic format is something like this: Amendment to Contract Form.

Might I suggest that if you are doing business under this type of contract that you periodically take a look at it to make sure that you are still doing business the way the contract says you are. If not, get your pen out and make those changes.

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