Tax Blog

Laws of Contract Amendment

While the terms of a contract are binding it is possible to amend the terms of a contract. Most contracts are in writing and they outline the responsibilities of each involved party, as well as conferring the benefits each party will receive during the course of the agreement. Certain contracts are required to be in writing in order to meet the requirements of the statute of frauds, however, both oral and written contracts can be modified after all the parties agree on the terms.

State common laws usually govern service contracts, and the state you sign a contract in for the sale of goods will have its own version of the UCC which governs that type of contract. Amendments do not replace terms in the original contract, but they do modify portions of a contract. For example, altering the date or price of goods would only modify those specific details in the contract.

Amendments and modifications to agreements are only enforceable if there has been writing produced and signed by all parties. The amendments and modifications will include details as to what specifically is being changed so that there is a meeting of the minds. While modifications are legally required to be in writing, that regulation isn’t always enforced. However, it is more difficult to enforce an orally modified contract. In order to protect the parties from any problems if there is an oral modification, the parties should stay away from contract clauses that require written modifications. There are certain amendments that are required by state laws to be written. Amendments related to the transfer of real property, financial matters, or transfers of intangible property are generally all required to be written.

However, when amendments are added prior to the parties' signing, they are not regarded as amendments because the agreement has not officially been indicated by signature yet. Additionally, small errors can be handwritten into the contract if it is initialed by all parties. This technology is not an amendment but parties may choose to label it as such.

Do you have questions or need help with a contract or an amendment to a contract? If you have questions or need professional help with your contract law needs then enlist the help of the professionals at The Center for Financial, Legal, and Tax Planning, Inc. Please contact us at (618) 997-3436 for more information.




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