Introduction

Whether you need to tweak a term due to shifting business needs or correct a simple oversight, amending a contract is a common part of business operations. It doesn’t have to be a daunting task—here’s a straightforward guide to modifying a contract without getting lost in the legal weeds.

Read: How to update your contracts to increase profits

Understand why you want an amendment

First order of business: figure out why you need to make a change. Maybe it’s because the payment terms are squeezing your cash flow, or perhaps your services have evolved and the contract hasn’t kept it.

Pinpointing the exact reason for the change is like digging for the right wrench in your tool belt—it’s all about making sure you can tighten up any issues in the contract without any unnecessary fuss.

Steps to amend a contract

Step 1: Review the original agreement

Start by reviewing the original contract to check if there is anything in the contract that says how amendments need to be handled. Some contracts have specific rules about how changes need to be made, like using a particular format or getting a thumbs up from certain people.

Step 2: Draft the amendment

Now that you know the rules, it’s time to write-up the changes.

This doesn’t need to be complicated. Unless the contract outlines a different process for making an amendment, clearly write out what’s being changed in a separate document, make reference to the original contract (and its date), and keep the language consistent with the original agreement to avoid mix-ups or misunderstandings.

Step 3: Get agreement from all parties

Usually, all parties who signed the original contract must agree to the changes, unless the contract says you can amend it without the thumbs up of the other parties. However, even then, it’s best practice to get everyone involved in the original contract to agree to the changes.

Usually, this involves some back and forth negotiation, making sure that the new terms work for everyone.

Read: Why you need clear payment terms in your business contracts

Step 4: Sign the amendment

Once everyone’s on board, it’s signing time. Get your signatures on the amendment agreement, and clip the signed amendment agreement to the original contract.

This keeps all related documents in one place, making it easier to review the terms as a whole without flipping through multiple files.

Step 5: Store documents securely

Last but not least, lock down the amended contract in a safe spot where everyone involved can access it if needed. Proper filing keeps the peace and prevents “He said, she said” down the road.

Best practices for contract amendments

• Use clear language: Keep your wording sharp and to the point to ensure everyone understands the changes.

• Make sure it doesn’t impact the rest of the agreement: Amendments can have ripple effects on other terms within the contract. Review the entire document to ensure that new changes don’t conflict with existing terms.

• Transparency: Keep the lines of communication open. Discussing changes openly builds trust and makes the amendment process smoother.

• Hire an attorney: When things get complex, don’t guess—get a legal expert to take a look. It’s like asking a mechanic to peek under the hood; they’ll catch things you might miss.

Read: Does a contract have to be in writing?

Conclusion

Amending a contract doesn’t have to throw you off course. With a clear understanding of the changes needed and a straightforward process in place, you can navigate amendments with minimal turbulence.

How Cobrief can help with contract review

Reading your business contracts can feel overwhelming as an owner-manager of a small to medium-sized business. That’s where Cobrief comes in. Cobrief helps business owners and operators review their business-to-business contracts for legal risks.

Upload your contract to Cobrief's AI contract review software, click review and you’ll get a list of all the risks, in plain English. This helps you decide whether to sign, negotiate or reject the terms of your contract, or hire a lawyer. Think of it as a heat map for your contracts.

Get started here.