How to Change or Amend a Contract in England

Running a business will always come with some unpredictability. For instance, you may agree to a contract intending to carry out its terms to the letter. However, you might decide to change or amend specific terms later down the track. Alternatively, you may wish to amend a contract because the wording is now out of date.

This article will outline the most common ways to amend a contract after signature so your organisation can better understand its options. 

Is It Possible to Update a Signed Contract?

You can update a signed contract if both parties agree to the contract changes. For instance, if your business signs a contract with another company and you both quickly discover the payment clause states “£50” instead of “£500”, you can agree to amend the contract. You would both do so to ensure the contract is accurate and to avoid any future misunderstandings about the agreed price.

Generally, you will sign a document known as a Deed of Variation to amend a contract after signature. The deed is a legally binding agreement that usually records the agreed-upon amendments to the contract.

However, you should know that deeds are more difficult to construct than a simple contract. Therefore, legal advice is usually helpful when negotiating a deed with another company.

What Are the Most Common Reasons for Changing a Contract?

There tend to be three main reasons for amending a signed contract through a Deed of Variation, including:

• correcting a mistake;
• amending the scope of a clause in the contract; or
• adding entirely new provisions.

We will explore each scenario below.

1. Correcting a Mistake

Commercial contracts can often be lengthy documents. As a result, it is not uncommon for a typo or minor error to occur. There are three main ways to correct a mistake or wording error within a Deed of Variation, including:

• replacing the clause by agreeing to replacement wording (the parties will read this in place of the original clause);
• describing the amendment by clearly stating that a new word or figure will replace a previous specific word or figure; or
• using a ‘strikethrough’ method which entails striking through a segment of the original text and inserting the amended wording immediately afterwards.

2. Amending the Scope of an Existing Clause

You may amend an existing clause if both parties later make other agreements after signature. 

For instance, your company might agree to deliver four types of items per month to a business client despite the original document stating one approved item. In this case, you could expand upon the original wording.  

So, an original clause might state: “our company will deliver one laptop per month to your business.”

To amend this, you might change the wording to: “our company will deliver: 

• one laptop; 
• one printer; 
• one scanner; and 
• one monitor per month to your business.”

Ultimately, you are not correcting a mistake because, at the time of signature, both parties had an agreement to deliver one item per month. Instead, you are updating the wording within the contract to ensure accuracy.

3. Adding Entirely New Content

Another method of amending a contract involves adding entirely new content. For instance, say that your company provides IT equipment to a local business. At some point, that business realises that it has limited computer knowledge and needs your ongoing support with the devices you provide.

In this case, your businesses could agree to expand the contract terms to include ongoing technical support for an additional fee. Further, your companies could agree to sign a Deed of Variation, amending the wording to include a technical support service and the additional monthly fees for doing so.

What Are the Usual Obstacles to Using a Deed of Variation?

When using a Deed of Variation, the first step is to get both parties to agree that they require an amendment to the contract. However, where the suggested change is to the apparent benefit of one party, the other contracting party may not be so keen to agree to the modification.

If each party is open to the need for a contract amendment, the main hurdle will be agreeing on up-to-date wording. 

This process is much like negotiating the original contract’s terms, as it can sometimes require a compromise between the parties.

Key Takeaways

When finalising a contract amendment, you should enclose a copy of the original agreement alongside it. Furthermore, it is good practice to highlight the key changes to the contract when creating a new version.

Additionally, your business should always consider whether any potential amendments could contradict other parts of the initial contract. If amending one clause makes others unworkable, it might not be a good idea. Finally, obtaining expert legal advice is always a good idea due to the complexities of negotiating and recording changes to a signed written agreement.

If you need help with the amendment of a signed contract, our experienced commercial 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 0808 196 8584 or visit our membership page.

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