Contract Amendment

What is a Contract Amendment document?

A Contract Amendment is a document that can be used to make formal changes to an existing contract. It can be used to document revisions, additions and deletions to the terms and conditions of a contract that is currently in force. If there only need to be several changes to a contract, it can be much easier to create an amendment than to create an entirely new contract from scratch.

An amendment does not replace the entire original contract, just the part that is changed by the amendment. It is not designed to be used as a standalone contract.

For example, a Contract Amendment could be used for situations such as:

• Extending the end date for a contract;
• Changing a contract from auto-renewal to fixed-term;
• Updating the prices in a contract;
• Changing how or when payments are made (such as from monthly to quarterly payments);
• Changing the scope of work covered by the contract.

What is the difference between a Contract Amendment and an Employment Contract Amendment?

As the name suggests, an Employment Contract Amendment is quite similar to a Contract Amendment but is specifically adapted for an employment situation.

A Contract Amendment is a more general document that may be used to amend a range of contracts.

Is it mandatory to have a Contract Amendment document?

Many contracts can only be amended in writing. For those kinds of contracts, it is essential to use a written Contract Amendment when making any changes to the original contract.

Even if the contract does not explicitly state that it needs to be amended in writing, it is best practice to use a written Amendment document when making changes. Without written proof, there is a high risk of misunderstanding and disputes, as the parties might remember things differently. It will also be hard to prove what was agreed, if there is ever a disagreement.

What are the prerequisites of a Contract Amendment?

The parties should check the original contract to ensure that the changes they are planning to make are permitted.

How many times can a contract be amended?

There is no strict limit on the number of times that a contract may be amended. However, once a contract has been amended multiple times, it can become increasingly difficult to keep track of the changes.

If the parties start to worry that this is happening, then they often decide to terminate the original contract by agreement (using a Mutual Rescission and Release Agreement) and create a new contract from scratch.

When can a contract be amended?

Contracts can be amended in a wide range of situations. For example, some common scenarios include:

• The parties want to extend the duration of the current contract;
• The parties want to update some of the other timeframes in the contract (such as delivery dates or deadlines);
• The parties want to update some prices in the contract;
• There is a change in the scope of the work that the contract will cover;
• One of the parties goes through a restructure so they need to update the contract with the details of their new structure;
• The parties want to change a contract from auto-renewal to fixed term (or vice versa);
• There are some changes in relevant laws or regulations, so the contract needs to be updated to match the changes;
• To tidy up some errors, inconsistencies, or ambiguous parts of the contract that were only noticed after the contract had been signed.

What has to be done once the Amendment is ready?

Once the Contract Amendment has been completed, it should be signed by both parties.

The amendment should then be filed and maintained with the original contract so that anyone looking at the contract will know that it has been amended.

What must a Contract Amendment contain?

An amendment agreement should include information such as:

• the parties involved
• the execution date of the original contract
• the effective date of the amendment
• the part of the contract which is being changed, including any subsection numbers and names if there are any in the original contract
• the nature of the change (addition, deletion, edit etc)

A Contract Amendment creates permanent changes to the contract. If the parties intend the changes to only apply for a limited period of time, then they will need to ensure that they make this clear when drafting the changes. For example, if the parties only intend for the changes to remain in effect until a particular date or event, then they should make this clear when preparing the document.

Which laws are applicable to a Contract Amendment?

The same laws which apply to the original contract will also apply to the Contract Amendment. For example, if the parties are amending a Partnership Agreement, then the Partnership Act in the relevant state or territory is likely to apply.

General principles of contract law also apply to contract amendments.

How to modify the template?

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.