January 10, 2017
Despite the nature of contracts to be ironclad documents, agreements evolve and grow over time. Many times it marks the continuation of a relationship or adjustment for circumstances that come up during the course of a project.
Amending contracts does not necessarily mean that a situation went sour. Instead, it’s merely documenting the progression of an agreement and marking down new terms on paper. For example, it’s commonplace for freelancers or contractors to extend their projects with companies or add new services to their offerings.
First, I want to commend you on having a contract in place. Too often individuals chart out entire projects on merely a handshake. While at first it seems nothing can go wrong, countless business associates end up in offices like mine to sort out the specifics in heated, and costly, battles. When planning to do business with another party, remember the old truism from Glenn Danzig, “Until the contract is signed, nothing is real.”
That same diligence continues when it comes to modifying a contract. If it’s not added to the agreement or written somewhere, the truth boils down to what you can prove.
Getting amendments down on paper happens far more seldom than having contracts in the first place. It’s just as essential, though. If you’re looking to keep everything in order and up to date in your contracts, here are several things to consider when amending them.
Typically most contracts have a statement that they remain in full effect unless modified by a writing executed by all parties thereto. The most common route is to add an amendment to the existing contract. As the document evolves, it’s possible that there will be multiple amendments listed out numerically, Amendment I, Amendment II, and so forth.
As mentioned, typical amendments include a new scope of services, adjustments to the payment structure, reduction or extension of services. When writing an amendment, you need to address what you want to keep and what you need to change. Once confirmed, both parties will need to agree and sign the amendment.
When adding in amendment or provisions, clearly spell out if another conflicting provision is already written into the contract. This is where most individuals run into trouble with contract amendments. Make it is very clear if one provision is superseding another provision and avoid making the amendment confusing or up for interpretation.
For relationships that will be continuing on, consider adding in a provision that the agreement will automatically renew annually or monthly unless one of the parties terminates it in writing. This helps keep your contract in place as you continue to work.
In theory, it’s both parties’ obligation to ensure that their contracts are up to date. That being said, when it comes to a verbal agreement going sour, it’s typically the smaller organization or independent contractor who gets the short end of the stick. Far too often, I see these smaller organizations complete work without proper or updated contracts in place. When going up against a larger organization with larger resources, it doesn’t typically end well for them.
If you are providing services and expecting fees, it’s essential to have the entire agreement spelled out with a signature before moving forward.
In many instances, such as a freelancer extending their services, the parties involved could potentially amend the contract on their own. There is always the risk in this possibility. The larger and more complex the contract, the more important it is to bring in qualified legal help.
It’s exceptionally important to build your book of business off of sound contracts and keep those agreements up to date. If you are looking for an experienced lawyer to partner with, Soden and Steinberger is the law firm for you.
We offer a full range of legal services.
Just as I can help you put contracts in place, I can also help you if you find yourself in the middle of an agreement on either current terms or a verbal agreement that fell through. Together we can review transactions and written communication to see what your rights and options are moving forward.