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How to Change or Amend a Business Contract in the UK

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As the commercial landscape is always changing, business owners must continually adapt their business contracts. For that reason, it is important that you understand how to amend commercial contracts to ensure your business can stay profitable. This article will discuss how you can change or amend a business contract.

What is a Contract Amendment?

Businesses use contracts on a daily basis. In signing those contracts, they will agree to be bound by terms and conditions enforceable under English and Welsh law. Failing to perform the obligations under those terms and conditions can result in a contract breach. If you wish to change your obligations, however, you can amend the contract. A contract amendment can change almost any clause within a contract. However, you can only make amendments if all parties to the contract agree to it. 

For example, right now, businesses worldwide are adding new clauses to contracts to help them keep running and perform their duties if unforeseeable circumstances occur. That relates a lot to COVID-19’s impact on the world, with many businesses struggling to perform their contractual obligations during lockdowns. 

To make an amendment, you should employ a lawyer to help negotiate the proposed changes to the contract, draft the document and amend that document. 

What is an Amendment Deed? 

The process of making amendments can either be a very short or a very laborious process, depending on a number of factors. These include: 

  • the size of the contract you wish to amend; 
  • whether that contract relates or has any impact on any other contracts; 
  • whether you are making extensive changes to the contract; and
  • how well you negotiate those amendments with other parties to the contract. 

To make those amendments, you must use an amendment deed. The deed should set out the changes you intend to make in the contract and how those changes come into force within the contract. 

The amendment deed will list where each amendment has taken place in a certain document. It will also include a copy of an original agreement and the amended contract. Indeed, it is also a good idea to include a comparison of the two documents, which, for efficiency, will highlight the changes made in the new document.

If you intend to make an amendment, you should consider the potential knock-on effect that an amendment will have on other contractual documents and whether they remain coherent. Therefore, if you need to make further changes, this will require additional contractual amendments. You can amend more than one document in an amendment deed to save time and work efficiently. However, this means that an amendment deed can become a very large and technical document if you use it to process a variety of amendments. 

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What is the Difference Between a Contract Amendment and a Contract Addendum? 

You may have also heard of the process of adding an addendum to a document. A contract addendum is another way to change or add terms to a contract. An amendment alters the terms and conditions included in a contract. On the other hand, an addendum adds or clarifies clauses included in a contractual agreement. Furthermore, an addendum is usually appended or attached to the pre-existing agreement. They can be used, for example, if you want to add a payment for additional services or add a new deadline into a contract. 

It is very important to note that if you are amending a contract with an addendum or a deed of amendment, you must have the consent of every party to that agreement and any agreement that contract may have an impact on. 

Additionally, each party who entered into the original agreement must sign the amendment deed with a witness or by two directors. This is the case even if the original document they are amending is not signed as a deed. Finally, you must ensure that each party to the contract has time to review and negotiate the terms of the agreements to their satisfaction. 

Key Takeaways

Business owners can amend contracts using an amendment deed or with an addendum. An addendum will allow you to clarify or add certain provisions into a pre-existing contract. Furthermore, parties usually include addendums in the form of a sheet that is signed and attached to the original document. On the other hand, amendments are a more common feature of modern business practice. Businesses use amendments to change, add or remove terms included in a contract. Contract amendments require an amendment deed that outlines the amendments taking place, often across a series of documents.

It is important to remember that each contracting party needs to give their consent to the changes for them to be legally valid and enforceable. For that reason, each party must sign the amended document. It is also advisable to get a lawyer’s advice when negotiating and drafting amendments into a contract document. If you need help drafting an amendment deed, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on [number] or visit our membership page.

Frequently Asked Questions

Can I change a contract after I sign it?

Yes, you can change a contract after you sign it. However, to change a contract, you need to have the consent of each entity that is a party to that agreement. 

How do you amend an existing contract?

Amendments to existing contracts can be made through an amendment and restatement deed or via an addendum. 

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Edward Carruthers

Edward Carruthers

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