When you enter into a contract with someone, you both agree to be bound by its terms. But what happens if you need to change these?
In this article we'll look at when you might need to make a change to a contract, and how to do that – both before and after it’s signed. You can use the menu below to navigate the post.
What’s a contract amendment?
A contract amendment is exactly what it sounds like – a change to an existing contract that both (or all) sides agree to. Amendments can be changes to anything in the original contract’s terms, clauses, sections, or definitions.
Why would you amend a contract?
There are lots of reasons for this. It might be because you forgot to include something in the original. Or it might be because you or someone else’s situation has changed since you signed it. For example, during the COVID-19 pandemic, people have had to amend contracts to cover things like supply shortages, empty offices, or new government guidelines changing the way they do business.
The contract amendment process
The process by which contracts are amended depends on the stage in the contract lifecycle at which you're looking to make the change. It also depends whether you're looking to make a contract amendment via a manual process in Word and email, or by using a contract automation platform.
How to amend a contract: pre-signature ✍️
The good news is that it’s really easy to amend a contract before anyone’s signed it. In fact, this isn’t technically an amendment – it’s just part of negotiating the terms. That means that once you’ve agreed the change with everyone involved, you can just edit your draft document as usual, and collaborate until it’s ready to sign.
It’s really easy to do this in-browser with Juro. And when you make an edit the other side will get an email telling them what you’ve changed, so everyone will know what’s going on. You can also:
- Make comments in the sidebar, for example if you need to let people know why you’ve edited something
- Tag people – helpful for negotiating, and to make sure someone specific realizes they’re affected by a change
- Use the timeline to compare different versions when amendments are made
How to amend a contract: post-signature 📜
Once a contract is signed, it’s legally binding, so everyone involved in the contract must agree to any amendments you might want to make. And you’ll need to check the changes you’re making are clear and specific so everybody understands them.
A lot of contracts already include a clause stating how to make amendments – it’ll probably say something like “This Agreement may only be amended, supplemented, or modified by the mutual written agreement of all the Parties.” Even if it doesn’t say you should make amendments in writing you should do this anyway – it’ll help avoid problems later on.
Contract amendment process in Word
If the amendments are really substantial you have a couple of options.
You can create a new Word document that lists all the changes to the contract. It’ll need to:
- Show the date, the title and date of the original contract (e.g. “2 March 2021, Amendments to Service Contract dated 18 January 2021”), and the party names and roles
- Describe which sections you’re modifying or deleting and how – reference the paragraph, section, or subsection. You can use strikethrough and italics for deletions or additions
- List any definitions you’re changing
- Describe any clauses you’re adding
You should also include some text making it clear that the amendments only apply to the sections referred to in the new document, and that everything else is still the same.
Finally, you’ll need to make sure everyone who signed the original contract signs and dates this amendment document, and gets a copy of it. In Word, this means sending the document via email, to be amended through tracked changes, with versions being created and exchanged until you reach agreement.
It will then be converted to PDF for signature.
Contract amendment process in Juro
If you use Juro as your contract automation platform, then a much faster option is to simply duplicate the original document from your dashboard:
… and create a new contract with the amendments you’d like to see. You can use Juro’s editor features to highlight or tag these sections, before sharing them with counterparties. When the amended contract has been agreed, just send it for signing as you would normally.
Common types of contract amendments
Some situations where you might need to amend a contract include:
- To extend or shorten its length (the “term”)
- To change prices or fees for a product or service
- To change parties’ liabilities
- To extend or shorten time periods e.g. delivery or shipping times
What’s a contract variation?
You might hear people talk about a “contract variation” (especially in employment contracts) rather than a contract amendment. They’re the same thing – but to avoid any confusion it’s probably best to stick to “amendment” as a term. To vary a contract, just follow the process we’ve talked about above.
What’s a contract addendum?
While an amendment changes the actual terms of the contract, an addendum keeps all the original contract terms in place and adds new ones. It’s important not to confuse addendums and amendments as, unlike amendments and variations, they are different things.
For example, if you decide to get a new product from a supplier, you could add the details of this as an addendum to the original contract. Everything else in the contract stays the same and applies to the original product you were buying from the supplier.
You can easily add addenda (that’s the plural) to a contract in Juro as attachments.
What’s a contract appendix?
Appendices usually appear at the end of a contract. Unlike an addendum they don’t change or affect the contract’s terms in any way – they just add extra information about it that you need to know. That could be a document explaining what certain words in the contract mean, or something specific like benefits or share options you’ll get when you sign an employment contract with a particular company.
Contract amendment examples
Here are some of the ways you can make amendments if you’re creating a separate document to your contract. Note that this isn't legal advice and you should make sure contracts are reviewed by qualified colleagues 😎
Changing a couple of words
“The parties agree to amend the Agreement dated 2 March 2020 with the following deletions (indicated by strikethroughs) and additions (indicated by italics):
2(b) Making a claim. The buyer must contact the seller by phone within two working days of the complaint.”
Replacing an entire clause
“Section 2(b) of the Agreement dated 18 January 2021 is replaced in its entirety with the following: [XX]”
Describing an amendment
“This amendment removes subsection (c) of section 23 of the Agreement which reads ‘[xx]’ and replaces it with ‘[xx]’.”
Making it clear that everything else in the contract remains the same
“All other terms and conditions not changed by this or previous amendments are still in force.”
- Ken Adams – a leading authority on the building blocks of contract language – has lots of useful information and resources on his website.
- World Commerce & Contracting (previously known the IACCM) is a not-for-profit organization which helps members prepare, understand, and manage contracts and commercial relationships.
- Practical Law and LexisNexis also have lots of contract resources available.
Agree contracts faster with Juro
If getting contracts agreed quickly and at scale is a pain point for your business, Juro is an all-in-one contract automation platform that helps visionary legal counsel and the teams they enable to agree and manage contracts in one unified workspace. Hit the button below to find out more.