How to Amend a Contract – Transcript

[Intro Music] This is Office Talk with Annette Stepanian. 

Annette

Hey there. Thanks for coming back for another episode of Office Talk. In today’s legal quickie episode, I’m going to be answering a pretty straightforward question. It’s more of like a logistical question versus like a legal question per se. But I was just having a call with a client of mine and she had this question. And it wasn’t the first time I had heard it. And so I thought it would make the perfect topic for this legal quickie episode. 

And it’s all about how to make changes to a contract after it’s been signed. Seems pretty straightforward, right? Except when you’re actually sitting there trying to do it, you’re like, I don’t know how to do it. So we’re gonna walk you through that today. 

Now, I’ve tried to think about how I can do this, because we have the challenge that this is a podcast episode. And so you can only hear me and you can’t see the visuals. So I’m going to do my very best to explain this in a very clear manner. So you understand it. But maybe you’re a visual learner like me. So I’ve put together a PDF that you can grab over in the show notes, that is going to outline the examples that I’m going to be introducing to you. So you can download that and follow along with what I’m saying that’s available at the show notes over at annettestepanian.com/podcast/13.. That’s the number 13. 

First, I’m going to answer what is an amendment exactly and then we’re going to talk about how to make amendments to your existing contracts. 

Now, I want to make a few things clear, an amendment and attachment and an addendum, those terms seem to get really confused by the folks I talked to. And they’re kind of different. So let’s get them all figured out. They all start with the letter A, so you kind of in your mind are like, ah, they must be the same thing. But they’re not. 

So let’s take a step back. We’re going to be talking about the main contract. So the main contract we’re going to assume is, let’s say maybe a client service agreement that you have entered into with a client. Then there’s the attachment. An attachment, or sometimes called an addendum, these are documents that get attached to the main contract, and are referenced within that main contract. So when they are referred to collectively, when you put the main contract plus the attachments, those constitute the entire agreement of the parties.

So for example, let’s say you are a graphic designer, and you have submitted a proposal to a client, and that outlines all of the services that you’re going to be providing. And all it does is just outlines kind of like a quote, right, it says what you’re going to do is going to maybe say what the price is, and that’s it. And so when you’re ready to enter into an agreement, you have a more formal agreement that the client is going to sign. And so what you do is instead of listing out all those services, and like the payment for everything within the body of that contract, what you do is you attach it to the contract. So for example, you say that the designer agrees to perform the services outlined in the proposal, which is attached hereto as attachment A, and is made part of this Agreement.

So then you have the main contract, and then you have that attachment A that is attached to the main contract, okay? And again, an attachment and addendum, sometimes they’re used interchangeably by folks, but they essentially serve the same purpose. 

An amendment, however, is different. An amendment comes after you have entered into a contract with a party, and you want to make changes to that contract. Going back to our graphic designer example. Let’s say you want to change the amount owed for some reason. Maybe you’ve agreed with your client that you’re going to reduce the total fees that they’re going to owe you from $1,000 to $500. And so you want to have an agreement, or something that documents that understanding between the parties. So you’re going to do that by way of an amendment. So you are going to amend the existing contract. And it’s kind of like another agreement that references your main agreement with your client. 

Sometimes your original main agreement, so let’s say your agreement for design services, will have a provision in there that addresses how amendments will be handled by the parties. Oftentimes, it’s a boilerplate provision. And if you don’t know what a boilerplate provision or clause is check out episode number three, where I talk about why they’re important and some of the more common ones, But for most of us, we know it as kind of all that legal mumbo jumbo that comes at the end of a contract, right? It’s standard language that ends up kind of being put at the end, kind of maybe under a miscellaneous title or whatnot. 

So if you have a term in your main contract, so this is that agreement for design services, for example, then you want to read it and see how it says you are going to be handling amendments. Usually it says that all amendments to a contract will be made in writing and signed by the parties. Okay? 

So if you have that amendment provision in your contract, that’s what we’re going to do. If you don’t have that amendment provision in your contract, don’t worry, I still recommend that you get an amendment in writing and signed by the parties.

So the question is, okay, what do we do when we want to make an amendment?  We get it. It’s not an attachment, it’s not addenda. It’s a change that we’re making to the main contract after it’s been signed? So how do we actually practically do that? Super simple. It’s basically just another agreement. 

So usually, what you do is you have a separate document and you give it a title. And it’s the amendment to whatever document or contract that you’re amending. So going back to our example, the agreement for design services. The header will say, amendment to the agreement for design services, dated January 10 2016, whenever you guys sign that agreement. Aand then you’re going to have an opening paragraph that indicates that the parties are amending that specific agreement. So here are the agreement for design services that was dated January 10 2016. 

You’re then going to describe the amendments, which there are a few ways in which you can do that. And I’m going to go through and talk about that right after. So just a little footnote here. 

The next paragraph states that other than the changes indicated on this amendment, the agreement stays the same. So you’re making it clear that the only changes you’re making are the amendments that are described within this document. 

And then you have the party sign the amendment. And I recommend just attaching it to the main contract so you have all of those documents together. So going back to how do you describe the amendments. 

So the first way to describe an amendment is to replace the changed paragraph in its entirety. Now, this is the cleanest way of doing it, just to make sure that you don’t miss anything. But let’s say in your main contract, paragraph 10 states:  “Consultant agrees to provide client with a report by October 5, 2016.”

And what you have agreed to do is to change it so that it reads: “Consultant agrees to provide client with a report by June 5, 2016.” Okay, so the easiest way to address this in your amendment is to have a statement like this: Paragraph 10 is hereby deleted and replaced in its entirety with the following. And then you put in what you actually want it to say. So consultant agrees to provide client with a report by June 5, 2016. 

I hope this is making sense because we don’t really have the benefit of the visuals.So hopefully, you’ve downloaded that PDF in the show notes and are following along. 

The second way to make a minor change in a signed contract is by using red lines and strike throughs. Under this method, the additions and deletions to the contract are shown visually, with additions, underlined and deleted text crossed out. So going back to our prior example, let’s say you want to change the date from October 5 to June 5. What you do is you have a statement that says the parties agreed to amend the agreement by the following additions indicated by underlining and deletions indicated by strike throughs. So for example, it’ll say paragraph 10 is amended to read as follows. Paragraph 10. Consultant agrees to provide client with a report by and you strike through October 5, 2016. And then you add June 5, 2016. And then you underline that the June 5 2016. 

And finally, the third way in which you make a minor change to sign a contract is by describing the change. Now, this is not my favorite way of doing it because you can potentially miss something and overlook something and it could screw things up. So I don’t recommend it. However, I want you to know that it is another way of doing it. 

So for example, what you’ll do is you’ll say the first sentence of paragraph 10 is amended by striking October 5, 2016 and replacing it with June 5, 2016. So that’s it. I hope this made sense. 

Again, I appreciate that it may be a little bit difficult given the fact that we don’t have any visuals with us. You can download that little PDF that I created so that you can follow along with the examples that I just talked about. 

Speaking of contracts, if you’re listening to this episode when it first aired in November of 2016, I just want to share that I’m in the middle of my five day of giving giveaway where I am giving away a contract template every day of this week. So if you haven’t heard about it, if you haven’t signed up for it yet, head on over to annettestepanian.com/5days. And so that’s the number five, and then days spelled out or head on over to the show notes and sign up. I’ve already given away two of those contracts. So you have three more days to make sure that you enter to win. So with that said, I hope you have a wonderful day. Thank you so much for being here, and I can’t wait to talk to you later.

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