Contracts are the method businesses and others use to make agreements. A contract must be signed by both parties in order to be valid. Once a contract is signed, it is considered valid, and both parties must fulfill their part of the deal. Contracts are essential in all areas of business. We sign contracts with our vendors, suppliers, contractors, employees, and customers. Sometimes, things come up, and one or both parties want to make changes to a contract after it is signed. It is helpful to understand how contracts work and under what circumstances you are allowed to modify them.
What is a Contract?
A contract is “an agreement between parties, creating mutual obligations that are enforceable by law.” All parties must have a meeting of the minds, and all are required to do something in return for receiving something. Generally, one party in a contract provides goods or services, and the other party provides payment. A contract may be written or verbal, but written contracts are much easier to interpret and enforce. A contract may provide for the time frame in which the parties must complete their obligations. It may also include details on how to handle a breach of contract.
Can I Modify a Contract After it Was Signed?
Once a contract is signed and put in place, there are limitations to modifications. You may only modify a contract when both parties are in agreement with the changes. Essentially, a modification creates a new contract between parties. If you wish to change a contract, you can only do so when the change is material. Both parties must agree to the changes in writing. If only one party makes changes to the agreement without the approval of the other party, the changes are likely not enforceable.
What are Material Changes?
A material modification is one that changes the meaning or impact of the original contract. A modification is material if it alters the intent of an important part of the contract. A material change may also occur when the changes will affect the rights or obligations of the parties. One example of a material change is when you want to modify the date of the delivery or execution or the payment schedule. Another example of a material change is when there are changes to the goods or services in the contract. If a modification is made with the intent of one party to defraud another, the contract is deemed invalid.
How to Modify a Contract
Sometimes, a contract will contain details on how to make changes once the document is in place. You should first look to the original agreement to determine whether there is a process you must follow to modify the contract. If the contract is silent on the matter, you may only make changes with the approval of the other party. Both parties must agree to the changes. Depending on the extent of changes, you may be able to simply amend the document. In this case, both parties must sign approval of the changes. In some cases, it may be best to create an entirely new contract. If you wish to modify a contract, it is a good idea to discuss the matter with your attorney. Your lawyer will advise you as to how to proceed.
If you are creating a new contract or need to modify an existing one, we can help. Contact us at Moen Sheehan Meyer, Ltd. by phone at (608) 784-8310 or by email to schedule a consultation.