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    Amending Contracts: the How and Why

    22/07/21 9:31 AM

    When parties have a contract in place, there may be circumstances where the parties wish to amend the contract where appropriate as it may no longer reflect the agreed positions of the parties to the agreement. This includes changes to the original contract’s terms, clauses, sections or definitions.

    There are several reasons as to why parties may need a contract amended:

    • Fixing a mistake (including spelling errors or incorrect figures)
    • Deleting a provision that is no longer relevant
    • Replacing a provision where circumstances have changed
    • Increase, decrease or amend the scope of the contract
    • Include an entirely new provision

    Amending a contract may include adding, deleting or correcting portions of the contract and this does not replace the entire contract but often substitutes a part of it, altering the original contract in some way. It is also essential that the amendment is in writing so that it can be attached to the written agreement and accessible for the parties. It is easier to amend a contract before the parties sign as it is technically part of negotiating the terms. This allows changes to be made by drafting the document as usual with continuous collaboration until it is ready to sign and become legally binding.

    Amendments to Contracts before Execution:

    Minor errors can be found in a hard copy contract as a result of the rush in preparing a contract. It would be ideal to correct the error electronically before execution, but this is not always practical especially when parties are meeting in person to sign the hard copy. In these circumstances the error can be fixed by hand by striking or crossing out the error, inserting the amendment and ensuring both parties write their initials next to the amendment to ensure it is valid.

    Amendment after Execution of a Contract:

    Reading the terms of the contract is crucial to see what the process of amendment is. Usually contracts will specifically state that any amendments made need to be made in writing that is signed by both parties. Sometimes the contract may require you to make the amendments by executing a deed of variation, especially if the contract is of high value or the amendments are substantial or significant. A deed of variation will usually record the parties' intention for the amendment, refer to the clause in the contract allowing the amendment to be made, clearly set out the amendment and an execution block to be signed by the relevant parties. It is important that parties and their legal representatives ensure the contract is changed by following the right amendment process.

    If you have further questions, please contact us at info@franklaw.com.au.

    This is not legal advice. 

    Breeann Lalao

    Written by Breeann Lalao