Alteration of terms: Overview, definition, and example
What is alteration of terms?
Alteration of terms refers to the process of changing or modifying the conditions, provisions, or clauses within a contract or agreement after it has been signed by the parties involved. These alterations can involve adjustments to payment terms, deadlines, scope of work, or any other provisions that were initially agreed upon. The alteration of terms usually requires the mutual consent of all parties, and it is formalized through an amendment or addendum to the original contract.
For example, a supplier may agree to change the delivery date in a contract with a buyer due to unexpected delays, which would be documented as an alteration of terms.
Why is alteration of terms important?
The alteration of terms is important because it provides flexibility in contracts, allowing the parties to adapt to changing circumstances or needs after the contract has been signed. Whether due to unforeseen events, changes in market conditions, or evolving business needs, the ability to alter the terms of a contract ensures that both parties can continue to meet their obligations under new or updated conditions. It helps maintain the validity of the contract while addressing real-world changes.
For businesses, the ability to alter terms helps prevent contract breaches due to changing conditions, allowing for a smoother continuation of business operations. For individuals, alterations provide a way to resolve disagreements or adjust expectations without resorting to formal legal actions.
Understanding alteration of terms through an example
Imagine a company signs a service contract with a vendor to provide software for one year at a fixed price. Halfway through the year, the company requests an alteration of terms to extend the contract for another six months with a discounted price, as they require continued support. The vendor agrees to the change, and both parties sign an addendum to formalize the new terms, including the extended duration and the revised price.
In another example, a construction project’s timeline is delayed due to unexpected weather conditions. The contractor and the client agree to an alteration of terms that extends the completion deadline by two months. This agreement is formalized through a written amendment to the original construction contract.
An example of an alteration of terms clause
Here’s how an alteration of terms clause might appear in a contract:
“Any alteration of the terms of this Agreement shall be made in writing and signed by both Parties. No verbal modifications or amendments to this Agreement shall be valid unless confirmed by a written amendment, which shall be incorporated into the Agreement as an addendum.”
Conclusion
The alteration of terms allows for adjustments in a contract when conditions change or when the original terms no longer meet the needs of the parties involved. By formally modifying the terms through a written amendment, the parties can continue to work together under updated conditions without invalidating the contract. This flexibility ensures that contracts remain relevant and enforceable, even in the face of unforeseen changes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.