In most cases, a commercial contract contains an explicit clause specifying whether one or more of the contracting parties may modify their terms and the procedure for amending the treaty, such as whether an amendment must be made in writing and signed by all parties. During the term of a commercial contract, the parties to this contract may have the opportunity to modify it in any way. This may be due, for example, to a change in the conditions of activity or a renegotiation of the initial contract. In this article, we examine how a treaty can vary and the factors that courts will consider when considering whether a valid change has taken place. Except as expressly provided in this Agreement, no amendment to this Agreement shall be effective unless it is signed in writing and signed by the Parties (or their authorized representatives). In order to avoid any problems, it is usually always advisable to execute a modification agreement as an instrument; in particular where an agreement amending a previous contract has not been concluded in favour of a party and/or does not appear to find consideration. Sometimes it is not only wise, but essential to vary a contract in writing. Commercial contracts often contain a clause stating that an amendment is only effective if it is in writing and signed by all parties. This type of clause aims to strike a balance between flexibility and security.
While allowing the parties to vary their agreement (giving the parties the opportunity to reflect subsequent developments and changes in practice), this means that the parties should always have a definitive record of the agreed terms (as they vary over time) and can therefore avoid disputes over the terms governing their relationship. In the absence of an amending clause, a modification of a contract can be done in any way of concluding a contract. It may be different: the parties may agree to change the terms of a contract by mutual agreement, a party may have the unilateral right to change some or all of the terms, or there may be a contractual process that the parties must follow to make changes – it depends on the terms of the contract. The Common Law allows a written contract to be amended subsequently by mutual agreement between the parties, orally or in writing. However, it is customary to include in commercial contracts an amendment clause which provides that all amendments to a contract are ineffective, unless they are made in writing and signed by or on behalf of both parties. This clause is intended to prevent informal or accidental oral anomalies. It is therefore important to consider whether the original contract contains an amending clause, because if this is the case, oral derogations are generally ineffective. To ensure that there is no dispute over what has been agreed, it is advisable to always try to document deviations, as oral variations are difficult to prove. Another – new – contract is required to modify an existing contract: known as variation. When the parties amend a contract in writing, it is generally easy for a party to assert its rights to prove the modification agreed by reference to a modification agreement or the exchange of emails. Similarly, a party invoking an oral amendment should be able to determine how the amendment agreement was concluded. However, if a party claims that a contract was different in behavior, the cases can be a little more complex.
The purpose of an amending clause is to prevent attempts to undermine the written agreement informally and to avoid any dispute over whether a change was being considered and its precise terms. Such clauses are often present in commercial contracts, and in the 2018 Rock Advertising case, the courts confirmed that the law would enforce such clauses. However, in many cases where changes need to be made by mutual agreement between the parties, the agreed changes may not be legally binding or enforceable in the absence of a properly implemented amendment document; it is therefore important that the parties take into account the modification requirements and implement derogations in accordance with the contractual conditions in force. . . .