How to amend an existing contract (FREE template!)

When to change a contract:

A guiding principle at Honest Contracts is that contracts are supposed to be useful. If circumstances have changed to the point where parts of the contract no longer make sense, then it’s time to update the contract. Many people never get this far because their contract wasn’t that useful to begin with. Indeed, most people don’t read contracts because they are poorly designed and riddled with legalese that makes smart people feel bad and overwhelmed.

If you ride it out and hope for the best knowing that parts of the contract are inaccurate, you are taking the risk that things will be harder and messier later on if there is a dispute. 

Of course, it’s possible that things have changed so much that the contract becomes void or unenforceable. But if it’s a matter of correcting errors, modifying numbers, or making other changes to reflect new conditions, then it’s important to update the contract so it stays relevant, enforceable, and hopefully, useful.

What you’ll need for the contract amendment:

1.  Dig up the original contract. Make sure it’s the final version that was signed by both parties;

2.  Find exactly what parts you want to change or where exactly you want to add language;

3.  Have a clear idea of why changes need to be made and communicate that to the other party;

4.  Determine when you want the changes to become effective (the effective date of the amendment);

5.  Get the other party’s consent (more on this later on).

How to draft the formal contract amendment:

The easiest way to draft the amendment is to use a template, but you can always create your own. If you’re starting with a blank document, you’ll want to include the following:

1.  Title the amendment (e.g. “First Amendment to [name of original contract]”);

2.  Party names (e.g. “First Amendment to [contract name] between Jane Smith and Andrew Martinez]”);

3.  Effective date of the original contract (if the original contract doesn’t say when the effective date was, then put the date the last party signed the contract);

4.  A brief background paragraph explaining the context for the amendment;

5.  The exact change you’re making in as clear language as possible (e.g. “Section 1.4. is replaced with the following: [new language here]” or “New Section 1.5. [new language here]”);

6.  A sentence stating that the rest of the contract remains in effect as originally written;

7.  A signature block for all parties (include their name, signature, title if signing on behalf of a company, and date of signing).

Even if you’re using a template, make sure it includes all of the above.

We made the formal amendment, now what?

Once signed, the amendment becomes a part of the contract. That means it needs to be physically or digitally attached to the contract as one document. Make sure all the parties have a copy of the full document, including the original contract and the signed amendment, and keep it in a safe place.

It’s good practice to also keep older drafts of the documents and the back-and-forth communications about the contract/ amendment. This creates a good record of the parties’ agreement that may come in handy if there is a dispute.

What happens if the other party doesn’t sign the amendment?

If the other party doesn’t sign the amendment, then you can’t enforce it against them. That’s the general rule, but of course there are exceptions and arguments that can be made to try to hold someone to a contract term they didn’t explicitly agree to.