Contract variations are part and parcel of business relationships. Agreements evolve, requirements change. It’s important to be aware of how to vary a contract in order to facilitate these changes.
How Can You Vary A Contract?
You are able to vary a contract just like they are formed, be it verbally, in writing or by conduct. The first thing to check is whether your contract has a variation process included. If it does, that process should be followed. If that process is not followed case law has shown that it is highly likely the variation would still be legally valid.
Agreement or Deed?
If you need to vary an agreement, the next stage is to decide whether the variation should be in the form of an agreement or a deed. In order to answer this there needs to be an assessment of whether there is to be any ‘consideration’. But what is ‘consideration’?
Consideration can be defined as a benefit exchanged as part of the contract. For example one party pays money to another party in order for that party to perform services. The benefit for the service provider is the money and the benefit for the client is the receipt of the services. Where it is clear the variation will provide for consideration then a simple variation in the form of an agreement would suffice. If there is no consideration or if it unclear whether consideration is exchanged then the variation should be in the form of a deed.
If you’re unsure whether you have a valid variation, we’re here to help. For just £49.99 we can check your contract variation is adequate for your needs. Have a look at our services here: www.contractcanary.com/shop