Would you like assistance creating a contract amendment? At San Diego Esquire, we help businesses update their contract terms by drafting contract amendments. Contact us for legal advice and counseling before signing a contract amendment.
Read on to learn more about amending a contract in California.
What is a Contract Amendment?
Parties to a contract may find that they need to modify the terms of the original contract. For example, the parties originally contracted for one year, and after six months, decide to extend the length of the contract to three years. If the terms of the original agreement are being altered, then the contract will require an amendment.
Many contracts have a clause that states that an amendment must be in writing. This is not always enforced, particularly if one party relied on an oral modification. However, even if a contract did not expressly prohibit an oral modification, oral modifications are difficult to prove in court. By law, modifications of certain types of contracts must be in writing. These contracts include contracts that are required to be in writing by law, such as a contract for the transfer of real estate.
Let us say for example that Jill, a restaurant owner, has a contract with Mark, a local fisherman, to provide her with the “catch of the day.” The original agreement was for fifty pounds of fish per day at $5 per pound. The fish were to be provided daily for one year. The catch of the day becomes a popular item, and Jill finds she needs sixty-five pounds per day. She would also like to extend the agreement for an additional two years. Because of the additional orders, Mark agrees to lower the price to $4.50 per pound.
There are three main ways Mark and Jill can alter their agreement. They can have a redline version of the contract, in which deleted terms have a strike through and new terms have a double underline. A redline version of their amendment would look like this:
Mark will provide Jill with 50lbs. 60lbs. of fresh caught fish at a price of $5/lb. $4.50/lb. every day, except certain holidays from January 1, 2018 until January 1, 2019. 2021.
Another way Mark and Jill could alter their agreement would be to state the clause being replaced, and to restate the new clause, which would look like this:
Delete paragraph 7, and replace with:
Mark will provide Jill with 60lbs. of fresh caught fish at a price of $4.50/lb. every day, except certain holidays from January 1, 2018 until January 1, 2021.
The third way to amend the contract is to describe the changes that are to be made in detail. If Mark and Jill use this method, the amendment would read:
In the first sentence of paragraph 7, replace the number 50lbs with 60lbs. Replace the price of $5/lb. with $4.50/lb. Replace January 1, 2019 with January 1, 2021.
The parties can use any method they want to modify the terms of the contract, so long as the amendment is clear and specific, and any references in the contract are updated. All parties to the contract will need to sign and date the amendment. Once the amendment is signed, it will be considered part of the contract until the contract is renegotiated.
Contact San Diego Esquire for more information about how we can create an amendment of contract for you. We provide flat fee contract amendment drafting services to California businesses. Review our California Contract Drafting, Review & Amendment Service for more information.