Contract Modification

In one sentence

A mutual agreement between parties to change the terms of an existing contract.

Plain English

When two parties to a contract agree to alter one or more of its terms, that change is called a modification. Both sides must consent to the change, and typically there must be some new consideration (something of value exchanged) for the modification to be binding. For example, if a contractor and homeowner agree to add extra work to a construction project in exchange for additional payment, that's a modification. Modifications are different from breaches because both parties agree to them.

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Example

A software company and its client have a contract for $10,000 per month. Six months in, they agree to add new features in exchange for raising the price to $12,000 per month. This agreement to change the price and scope is a contract modification.

Used in a sentence

“The parties executed a contract modification to extend the project deadline by two weeks.”

Related terms

Contract

A legally binding agreement between two or more parties to do or not do something.

Breach

A failure to do what a contract requires, such as not paying or not delivering.

Consideration

Something of value exchanged by each party to make a contract binding.

Ratification

Accepting and confirming a contract or action, usually one that was previously invalid or unauthorized.

Oral Contract

A binding agreement made by spoken words only, with no written documentation.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Offeror

The person who makes an offer to enter into a contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.