The Right Way to Make Changes to your Contract
You know what they say “The only one true constant is change”
It’s inevitable that at some point in your business journey, you’re going to need to make changes to your contract.
Whether it be changing your service to be delivered, an updated timeline for deliverables, or perhaps an addition to the contract that needed to be added as your relationship with your client evolved, things change!
Can I unilaterally Change a Contract?
Before we get into the right and wrong way to amend a contract, I want to answer a question that I get a lot, and set the record straight:
No, you can’t unilaterally amend a contract - both parties need to agree to (and sign off on!) the changes. I always recommend having a conversation with the other party first so there aren’t any surprises.
So let’s get back to how to actually do this. Whatever the reason, there is a right way of amending your contract….and a wrong way.
The Wrong Way to Amend a Contract
Let’s first go through the wrong way of amending a contract.
I’ll set the stage:
You have been working with your client on a monthly retainer basis, and after realizing you are waaaay undercharging for the brilliant services you provide,, you’ve decided to increase your monthly retainer rate.
Your client is coming up on the end of their contract (it was for a 1 year term) but you have a hunch they are going to want to keep working with you and expect they’ll want to extend your contract for another year.
On your next call, right after your client lets you know they want to continue working with you, you casually mention you’re raising your rates.
You send your next invoice out, at your new rate. Hunky-dory.
Except it’s not.
Your client emails you, confused, wondering why their invoice is higher than usual?
Oh wait, were you not clear your new rate applied to them too? They verbally agreed, didn’t they?
You’re kind of embarrassed, your client’s really annoyed.... The trust you built and relationship you spent a year nurturing has now soured.
Here’s how that crisis could have been averted:
The Right Way to Amend a Contract
Same order of events as above, except...
On your next call, you’re super upfront about how you’ll be increasing your monthly retainer based on your improved skills and the results you’ve been delivering for all your clients. You remind your client that they're coming up on the end of their agreement, and you’d love to keep supporting them at your increased rate, and no pressure, why don’t they let you know in the next couple of days after they’ve thought about it.
Your client emails you back: Absolutely, they’d love to keep working with you.
You send them an email letting them know you’re thrilled, along with your Amending Agreement confirming your increased monthly retainer. Easy, peasy.
Client happily signs your Amending Agreement and you’re back to happily delivering your services with a few more dollars in your pocket.
Things to Keep in Mind when Amending your Agreement
Amending Agreements can be complex, or relatively simple, depending on the scope of the changes you’re making.
In either case, you’re going to want to make sure:
✔️ The changes being made are clear and specific!
✔️ The amendments don’t conflict with any other clauses
✔️ Your Amending Agreement has an effective date
✔️ There is language that confirms the changes in the Amending Agreement are the only changes being made, and the rest of the existing agreement remains the same
Why Can’t This Just be Done via Email?
Changes to contracts can totally be done by email and email correspondence can be enforceable.
The problem is that emails get lost and buried really easily. Also, if you have a team working for you, these amendments might get lost in emails that eventually get deleted when there are changes to your team.
I’ve been hired by clients in my law firm to try to enforce email amendments that they “totally remember their clients agreed to” but that they couldn’t find. It made my job as their lawyer basically impossible.
I truly believe in having a separate document that clearly outline the changes you’ve agreed to make, and savin’ that baby to a dedicated client folder on your hard drive or in the cloud.
It’s Murphy’s Law that when you need to rely on an amendment you made in one of the hundreds of emails that have gone back and forth between your client...., you won’t be able to find it.
Also, if you ever need to enforce that amendment (IE in court) it is SO much easier to have a solid (digital) paper trail in the form of Agreements, rather than emails. It will also save you money in lawyers fees if you don’t need your lawyer to review 18 months worth of email correspondence to try and figure out what changes were actually agreed to. All that email correspondence can instead just be the icing on your legal cake.
What’s the Difference between an Addendum and an Amending Agreement?
These two terms get mixed up quite a bit. A Contract Addendum is used when terms are being added to an agreement, and an Amending Agreement is used when the contract is being amended. You can totally have both additions and amendments set out in the same agreement. I like to stick with calling it an “Amending Agreement” as it let’s everyone know there are changes people need to be aware of.
When Should I get a Lawyer or Attorney Involved?
Sometimes contract changes can be pretty easy to understand and make. However, if you’re looking to make significant amendments to a contract that you feel might affect your legal rights, it’s a great time to check in with a lawyer. A big one is around ownership of intellectual property and which can get quite tricky and nuanced. In any case, it’s never a bad idea to have a professional help you out.
Ok, let’s say it all together now:
“I WILL NOT MAKE CONTRACT CHANGES VIA EMAIL, TEXT, TELEPHONE CALL, VOICE NOTE, DM OR ZOOM MEETING ANYMORE”
Doesn’t that feel good?
Ok, so if you need to make changes to your contract, I’ve made it really easy for you to do this. This Amending Agreement sets out the format to follow and the language you need to ensure you document your changes properly.