Modifying a Contract
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What Is a Contract Modification?
A contract is a legally binding agreement between two or more parties. It is usually a written document that outlines the duties and benefits that are prescribed to each party. Some types of contracts, such as those subject to the statute of frauds (SOF), must be in writing in order to be legally effective.
Whether a contract is in writing or orally agreed upon, it can usually be modified at a later date.
Contract modification occurs when the parties agree to change any of the terms in the original agreement. A contract can be modified in whole or in part, depending on the needs of the parties. Also, a contract can be modified either before signing or after the contract is formally agreed to.
For any modification to a contract to be considered valid, all parties must agree to the subsequent changes. If any party does not agree to a contract modification, the changes are not likely to be enforceable. Valid modifications will be enforced and are binding according to contract laws.
Why Might Contract Modification Be Necessary?
Contract modification can occur for a variety of reasons. In fact, there are as many reasons to modify a contract as there are to create one in the first place. Some common reasons that parties modify contracts may include:
- To extend the contract
- To modify the contract’s duration
- To alter the quantity items required under the contract
- To add or subtract any goods in the contract
- To change terms such as payment, delivery, or receipt of the product
A contract might also need to be modified for other reasons besides the desires of the interested parties. For example, contract modification might be necessary due to a statutory requirement. Or, a judge might order a contract to be modified under certain circumstances.
When Can a Contract Be Modified?
A contract can usually be modified at any time, as long as all the parties express their consent to the changes. Minor changes in a contract can often be handwritten into the original document, and then signed or initialed by the parties. Major changes to a contract will often have to be re-negotiated and subject to another printing and signing. Also, if the contract contains specific instructions on how to modify it, these will need to be followed.
If you will be modifying a contract before you sign it, consider the following tips:
- Take note of any provisions in the contract that you feel may be biased or unfair.
- Make a list of any changes or modifications that you feel are appropriate.
- Be sure to present the changes as you would like them to appear in the contract.
- Take note of the date, time, and location when you decided upon the changes.
- Attempt to foresee how the changes may affect the contract rights of both parties in the future.
Modifying a contract after signing can be somewhat more difficult than before signing. This is because the parties may have already begun performing their duties according to the contract requirements. Consider the following points when modifying a contract after signing:
- Take note of whether any party, including yourself, has already begun performing their contractual duties. For example, if the opposite party has already delivered a product, make sure to take note of the delivery.
- Consider how the contract modifications might affect such duties that have already been performed.
- Contract modification after the parties have already signed may require another round of negotiations. Be prepared to present your reasons for the modifications.
- Be sure the modifications satisfy all contract laws. For example, if the contract must be in writing according to the statute of frauds, then the contract modifications must also be in writing.
When Is Contract Modification Not Allowed?
Occasionally a contract will contain language that prohibits subsequent modifications in the future. For example, the contract may contain a clause that states, “This contract is not subject to future modification”. If this is the case, then it is likely that the other party will not consent to any modifications whatsoever. The parties will be obliged to follow the contract as it is, so long as it is not unfair or illegal.
Do I need a Lawyer for Modifying a Contract?
If you will be modifying a contract, you may wish to consult with an attorney before presenting any changes to the other party. This is especially true if you will be making major changes that would affect the substance of the agreement. An experienced contracts lawyer can help you draft and review the changes so that the contract meets your needs more fully.
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Last Modified: 01-20-2014 02:25 PM PST
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