Contracts and businesses go hand-in-hand. Oftentimes, a business will enter into a contract to get goods or services and/or provide goods and services. Sometimes, these contracts are as simple as a restaurant offering a meal and a customer accepting the offer by ordering and paying for the food. Other times, however, a contract can be a complicated process that could come to fruition through months of negotiation between two parties. Many times, however, due to unforeseen circumstances, you may need to work on modifying an existing contract. In this article, we will discuss the process of modifying an existing contract.
What Is A Contract?
A valid contract must include the following elements:
- Meeting of the minds
If any elements are missing from a contract, then it is not valid, and therefore there is nothing to modify.
Modifying Works The Same As A Contract Formation
Modifications to a contract are completely acceptable and valid under contract law. Modifications occur in the same manner as the contract formation and need the same elements to be present. A contract modification, however, occurs between the two original parties of the contract.
One of the existing parties of the contract must make a modifying offer to the other party. For example, a corporation hires a party planner to organize a corporate conference for 500 people. After a contract has been agreed to, the corporation wants to increase the number who will be attending the conference to 1000 people. They present an offer to the party planner to increase the terms of the contract to be able to accommodate the new number of people.
For an existing contract to be modified, the other party must accept the modification proposal. In the example above, the party planner has the right to agree or turn down the modified offer. If the party planner does not accept the modified offer, then the original contract will stand. On the other hand, if the party planner accepts the modified offer, they may seek modified consideration.
Meeting Of The Minds
For a modification of a contract to be valid, both parties must be able to negotiate in good faith. For example, if the corporation keeps to the terms of the original contract except they unilaterally modify to invite 1000 people to the conference instead of the original 500, then there was not a meeting of the minds. The contract’s original terms were modified by one of the parties, but the other party did not accept the modification or receive additional compensation.
Any modification to an existing contract will require a modification for consideration. In the example with the party planner, since the terms of the contract have been changed to accommodate a larger number of people, the party planner may request additional payment to be able to coordinate the logistics of handling a larger number of guests.
Legality Must Still Exist
As in the original contract, any contract modifications must be legal. For example, if the contract modification between the corporation and the party planner includes a clause to serve alcohol to guests under 21 years of age, this would be illegal under law and would make the modification null and void.
Concerns About Modification
Although modifications are completely acceptable in business terms, a layperson may not realize that a modification may lead to a material breach of the original contract. To avoid any issues and to prevent and potential breaches, it is advisable to seek the advice and counsel of a competent attorney.
Contact Dowd Law
Dowd Law has years of experience assisting businesses in Florida with complex contract issues, including contract modifications. If you need assistance with a contract formation, modification, or dispute, contract Dowd Law for a consultation.