Amending Agreements

Feb 01, 2018

In business, it is not likely that an agreement will cover every issue. And even if an agreement discusses the relevant issues, sometimes agreements need to be changed or updated. Most often, changes are made by making and attaching an amendment to the master agreement. Amending agreements is a common practice with managed service providers (MSPs) and companies involved with software licensing and companies that provide professional services. Even the best agreements can require amendments based on changes in law, technology, and the products or services provided. 

There is not necessarily a correct method to amend agreements. Below are a few examples to help illustrate this point, and a company’s attorney can choose which form is best for its own contract management.

Delete and Replace

Amendments can take the approach of stating that it is removing a particular section or clause, and then inserting the revised section or clause. The benefit to this is that the amendment is usually concise, and it is easy to identify the new clause. Unfortunately, a curious reader who wishes to know the previous language is forced to review the original agreement and all prior amendments to see the history of how the language may have transpired over time.

From and To

A solution to the “delete and replace” style is to illustrate both the initial section or clause first, and then to identify the revised clause as the new version. Another way to accomplish the same thing more succinctly is to just insert a redlined version that is actually marked to show what has been added, removed, or otherwise changed. However, the latter method can appear confusing to reader unfamiliar with the agreement.

Revised Agreement

Although there a many ways to accomplish amending contract language, updating the contract folder with a newly revised final version of the contract can be a great practice when actually referring to the contract is necessary. For example, enterprise agreements with long-standing clients may have many amendments over the years of a relationship. In such instances, finding the latest version of a particular clause can be cumbersome and time-consuming. Keeping a complete and updated version that contains all of the amended language, even if it is an “unofficial” copy, can be very useful in navigating terms and conditions when legal and business issues arise.

When working with contracts between small business or even enterprise agreements, consulting with an attorney who is experienced in the various forms of contract management can help a business stay organized, reduce billable time when issues arise, and tailor the agreement structure to what makes sense for the business.