Can I Amend a Contract in England?

As a business, you may have entered into a contract that you wish to amend. This can be for a number of reasons. For example, you may notice a mistake within your contract terms, or you may wish to create a new amended contract which better reflects your relationship with the other party. There are a number of ways that you can create new terms in a contract, or make changes to the original terms. This article will elaborate on some situations where you might want to amend a contract, and it will also explain certain best practices for amending a contracts.

How Do I Know If I Have a Contract?

It is important to understand whether you have a contract in the first place or not. To create a valid contract, you need:

• an offer;
• an acceptance;
• an intention to create legal relations; and
• valid consideration.

Thus, the first thing you should is to double check that you have a valid contract. If one or more of these elements is not present, you do not have a contract. Therefore, there is nothing to amend. 

Do note, you can create contractual obligations without consideration if you use a deed. 

Why Would I Amend a Contract?

Parties that are entering into a business relationship will typically create a written agreement in the form of a contract. Often, parties will create multiple contractual agreements to determine different aspects of their relationship. Where parties have signed a valid written contract, they will be bound by the initial terms of the agreement. If either party does not meet their obligations, each will be in breach of the contract. This will typically entitle the other party to claim for damages in court. 

After a contract comes into existence,either party may wish to change more terms in the original agreement. This can be for a number of reasons, for example:

• there is a material change in circumstances;
• aspects of the contract are not working as intended;
• external forces require a contract amendment, for example, disruptions due to COVID-19; 
• the parties agree to new payment terms;
• the parties want to make a series of major changes to their agreement; or
• the parties agree to include new clauses about their business relationship in to their agreement;

How Do I Amend a Contract?

If you wish to alter your contract, the first thing to do is to check if your contract has an amendment clause. Many contracts will include a term that sets out how contract changes are to be made. Usually, an amendment requires both parties to agree to the new terms. However, the initial contract may include a provision that allows one party to unilaterally alter another term in the agreement. But if this term is too widely worded or the effect too unfair to the other party, the term may not be legally binding. 

To create a valid contract variation, you must meet four key elements:

• it must be a mutually agreed change (unless the original contract has a clause which allows for one party to make a unilateral change in some circumstances);
• the parties must intend that the amendment is a permanent change to their contractual rights;
• the parties must comply with any formalities for completing the change (for example, rights over land have certain formality requirements); and
• the agreement must be made in a deed, or the agreement must have valid consideration.

So long as these requirements have been met, the parties to the contract can vary it through a formal variation agreement (which can be added to the original contract). Even though certain amendments can be agreed orally or through conduct, in practice, you should always record any amendment. This can help you avoid future problems. 

Key Takeaways

As a business, you may sometimes wish to amend a contract, or it may even be necessary to create a contract variation in some instances. The first thing to do is to check that your original contract is valid in the first place, and to check whether you have a variation clause of any kind. 

You can then vary your contract through mutual agreement with the other party, either through a written agreement, an oral agreement, or through your conduct. In any case, it is a good idea to write your obligations down so as to be on the same page with the other party as to your obligations and rights. 

If you need help with your business, 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 at 0808 196 8584 or visit our membership page.

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