It is not uncommon for parties to wish to vary the terms of an existing contract. There is no single way to vary a contract that works in all circumstances. Correspondence agreements do not always work. Actions are not always necessary. Sometimes a handshake is enough. Having the parties perform an act of modification or modification is often the best option. Not only is this more appropriate in the absence of consideration, but it also provides much more certainty about the changes made and the parties who accepted them. Since a variation is a contract in itself, either consideration is necessary for the variation to be effective, or the variation must be effected by an act. Contracts (or variations) related to the sale of land must also be concluded by an act. In a recent Supreme Court decision, when a party claimed that an agency contract had been modified to reduce the agent`s commission from 60% to 40%, one of the reasons the court refused to uphold the alleged amendment was that the agent did not receive consideration for the commission reduction. Not all the problems of a contract can be cured by variation. For example, the amendment of a Contracting Party is not subject to an appropriate modification.
Make sure that what is planned can be achieved through variation. A common mistake is that the parties try to vary a contract when it has already expired. This can happen when a contract has a fixed expiration date, but the tasks that need to be concluded under the contract go through the schedule. In addition, it is important that the right person signs a variation to ensure its validity and applicability. A person responsible for the day-to-day management of a contract is not necessarily entitled to accept changes. For example, the director`s authorization may sometimes be required. If you take the extra time to consider these issues, you can avoid future challenges or questions about the applicability of changes to a contract. Contracts very rarely allow one party to make unilateral changes (i.e. without the agreement of the other party). As a general rule, all current parties must approve all changes, whether or not they are affected by the changes.
Once a contract has expired, it can no longer be changed. Under these conditions, a new contract is necessary. Tip 6: Make sure the amended contract is internally consistent The parties should carefully check a contract in order to verify the terms of modification and ensure that these instructions are followed. Contracts often contain a clause that sets out formal and content requirements on how to amend the treaty. A common example is the requirement that an amendment be signed in writing by the parties. These requirements must be met. Varying a contract requires a little effort to make sure you`re doing it right. If you do not do this correctly, the change may be ineffective and the original contractual terms could continue to apply with adverse effects. A variation is legally a contract in itself. It must therefore meet all the requirements of each contract.. . .