What Methods Exist to Revise an Existing Contract?
- posted: Oct. 05, 2022
- Business Law
Completing a business contract might require weeks or months of difficult negotiations, so it is understandable why parties might be reluctant to make changes once the agreement is in force. However, circumstances change and can transform a formerly beneficial contract into a burden. While violating the terms of the agreement could subject you to penalties and possible litigation, approaching the other party to request a change might result in a mutually beneficial resolution.
The last few years have demonstrated how unforeseen, uncontrollable circumstances can threaten a small or medium-size business. Whether the event is a global pandemic, a supply chain problem or something that only affects your company, such as the sudden absence of a key individual, there are several options for altering contract obligations, including:
- Waiver — By executing a waiver, a party agrees to give up a contractual right without any consideration. For example, there might be a penalty clause in an agreement if the seller cannot deliver the goods by a certain date. However, if the buyer recognizes that the shipment was delayed because of circumstances outside the seller’s control, they could waive their right to enforce the penalty clause.
- Amendments and additions — You can change contract language in various ways while leaving the remainder of the pact in force. Some contract documents include strikethroughs to show deletions and terms added within the document’s margins. Revisions can also be recorded by adding a clause to correct or remove language that was present in the original pact.
- Rescission and reformation — When the circumstances underlying the original contract have shifted drastically, the parties could opt to rescind the agreement entirely. Should the parties seek to maintain some sort of contractual relationship, discussions can begin about a new agreement.
In situations where one or both parties seek a change to an existing contract, you might be inclined to resolve the matter informally. This could cause problems down the road, especially if other issues arise. Even if the proposed revision seems minor, it’s best to speak with a knowledgeable contracts attorney to help you determine the best course of action.
Karolyn A. Knaack, P.C. provides comprehensive legal support to Texas clients on the negotiation, review and enforcement of contracts. You can schedule a free initial consultation regarding your contract matter by calling 512-643-1849 or contacting me online. My firm has offices in Austin and Cedar Park.