31st May 2023
31st May 2023
For a any transaction to progress smoothly, it is essential for the parties to establish and maintain strong working relationships. This is also true when it comes to relationships between a client and a contractor. The reason for this is that these types of relationships, although they may start out on a one-off basis, they have the potential to become long lasting through recurring transactions and in some cases, referrals by the client to other potential customers. This relationship between the client and the contractor is usually governed by the contract that exists between them.
The contract between the parties can either be an oral contract or a written contract. As the name suggests, an oral contract is one wherein the terms and conditions are agreed by word of mouth/spoken communication. On the other hand, a written contract is one where the terms and conditions are contained in a written document.
While the contract is meant to govern the whole transaction between the client and contractor from start to finish, it is can be expected that at some point, an amendment may be required to cover any unforeseen events or changes to circumstances. To ensure a smooth process and maintain a good relationship with the contractor, it is very important to approach contract amendments in a collaborative and legally compliant manner. Where a contract amendment is not handled properly, it can lead to a number on undesirable consequences including:
Before proposing an amendment of the contract, the client should have an understanding why a contract amendment may be necessary and why the proposed changes may be required. The reasons for a contract amendment will depend on the particular contract in question. The amendment of the contract can include changes in the scope of the works/services, timelines, deliverables, pricing or the terms and conditions of the contract. In order to practively identify the need for an amendment of the contract, the client should carry out a thorough review of the contract at an early stage and proactively communicate with the contractor.
Reviewing the terms of the contract can be more difficult where the contract is an oral contract. It is therefore advisable to outline the agreed terms of the oral contract into a written document so that there is more clarity and avoidance of conflicting recollection of terms. The transferring of the oral terms unto a written document should be done as soon as possible before there are conflicting accounts of the oral terms between the parties. This will also make any potential amendments much easier and clearer to negotiate and execute.
Below are SEVEN tips that can help you amend a contract and also maintain a good relationship with your contractor:
When considering a contract, a crucial first step is to diligently review what has been originally agreed in the contract. The client should familiarise themselves with the specific terms, obligations, and the existing clauses that govern the amendment of the contract. Not knowing the parameters within which the contract can be amended will hinder the client's ability to effectively amend the contract terms. An attempt to amend the contract outside of the parameters permitted by the contract can also result in the contractor bringing a claim for breach of contract. As such, as a client, it is very important to make sure that whatever amendments you wish to propose conform with parameters permitted by the contract.
After confirming the amendment procedure provided in the contract, the client can send a letter requesting amendment to the contractor to begin the process.
It is essential to maintain good communication with the contractor during the amendment process. The reason for this is so that the contractor does not feel blindsided by the amendments when they are proposed. The client should therefore reach out to the contractor to discuss the proposed changes and explain the reasons why those amendments may be needed. This express communication should also include highlighting the mutual benefit of the proposed amendments to the contractor. The client should also aim for a collaborative approach when proposing amendments to the contractor, and actively listen to the contractor's concerns and suggestions. The result of an amendment on the contract as a whole should be a mutually satisfactory agreement so as to preserve a positive working relationship.
After recognising the need for amending the contract, the client should explore different available options to address the desired changes to the contract. The changes to the contract should only depend on the nature of the amendment. For instance, the client can decide that amendment takes the form of alterating on specific terms, adding or deleting specific clauses, making an adjustment to timelines or modifying pricing schemes. In choosing the most appropriate solution that will achieve the desired outcome, the client should assess the potential impact of each option.
In order to make sure that the amendment is legally enforceable and binding, it is important to properly record it. To do this, the clent should write out the proposed (and agreed) amendments which outlines the changes that are being made to the contract. The written document should also identify the affected clauses or section, and refer to the original contract. Additionally, the client should also make sure that the written document contains specific language that makes it clear that the amendment now takes precedence over the relevant clauses in the original contract. Both parties (the client and the contractor) should then sign and date the written amendment to show they consent to and understand the changes.
Example of amendment language can be found in Agreement to Amend a Contract.
In order to make the amendment(s) legally compliant, it is crucial that it complies with any relevant applicable legislation. It is very important to verify that the contract amendment does not breach any statutes. In order to do this, it is always best practice to seek legal advice if it it necessary so as to make sure that the amendment aligns with UK law and the validity of the original contract is not undermined.
Upon the documentation and signing of the amendment, it is crucial to communicate it effectively to all the relevant parties. Effective communication here can take the form of making sure that each party has a physical copy of the executed amendment so that they can annex it to the physical copy of the contract they have in their possession. Even after the amendment process is complete, it is still good practice to make sure communication lines remain open with the contractor to answer and clarify any further questions that may arise as a result of the amendment. As long as the parties involved communicate effectively with each other, the amendment of the contract is unlikely to be the cause of a dispute in future.
The amendment of a contract can be a delicate process which requires considerate and express communication between the client and the contractor. Despite this delicate nature of contract amendment, it can be successfully accomplished in a way that maintains a positive relationship between the parties. Following the tips listed above and complying with UK statutes will make it easy to effectively navigate the amendment process. It is best to approach the contract amendment process with a collaborative mindset, seek mutual agreement and ensure to document the agreed changes properly. Additionally, by ensuring open communication, understanding the need for the contract amendment and being legally compliant, the client can also nurture the relationship with their contractor(s), turning it into a fruitful, long lasting and profitable one.